In 2020, we will see updates being introduced to the Pegasus Opera 3 Payroll systems for all users. Pegasus Scheduler (2.20.20) and Opera 3 (2.70) will receive an upgrade, whereas Online Filing Manager will remain the same. However, Pegasus Opera users can continue to use version 4.01 of Online Filing Manager to send RTI submissions to HMRC.
With these recent software updates announced, there will be a few changes expected to come for Payroll. Here are the 9 changes in total to be implemented into Pegasus Payroll in 2020:
Statutory Parental Bereavement Pay and Leave
Under the Parental Bereavement (Pay and Leave) Act, primary carers who suffer the loss of a child will be entitled to at least two weeks paid parental bereavement leave from April 2020. This includes parents, adopters, foster parents and guardians, even close relatives/family friends who have taken care of the child in absence of the parents.
Employment Allowance (EA)
From 6th April 2020, the Employment Allowance will be restricted to only employees who have incurred a second Class 1 NICs liability of less than £100,000 in the tax year immediately prior to the year of claim.
Holiday Pay Average
The UK Government has legislated to increase the holiday pay reference period from 12 to 52 weeks, to try and even out the season variation in pay for many casual workers.
The new Opera Payroll will cater for the changes to holiday pay average calculation, as well as further enhancing to permit the employer to calculate the ‘daily average’ for holiday pay based on a configurable ‘number of working days in the week’. Please note though that these changes will only be applied to the weekly paid employees.
Off-Payroll Working in the Private Sector
The off-payroll working rules apply to a worker who provides their services through an intermediary. The changes to the rules ensure that off-payroll workers in the private sector, for medium and large-sized organisations or providing a direct service to the client, pay broadly the same income tax and National Insurance contributions as employees.
The ‘fee-payer’ will have to deduct income tax and NI contributions from the payment that is due to be paid to the worker. The income tax and NI will then be paid over to HMRC as per other employees. The amount the off-payroll worker is paid will then be reduced by the employee’s income tax and NI contributions, as deducted by the fee-payer.
Termination, and Sporting Testimonial, Payments
Going forward from 6th April 2020, the Government is introducing a Class 1A NICs liability on non-contractual “cash” (or cash equivalent) on termination payments over a £30,000 threshold. For sporting testimonial payments, the threshold is set at £100,000.
In addition to the employee having to pay tax on any excess amount above the associated threshold, the employer will not have to pay Class 1A NI contributions on that excess amount as well, at a rate of 13.8%. The Class 1A contributions will be included in the employee’s RTI Full Payment Submission (FPS) record.
Payrolled Company Car Benefits
HMRC requires the date the car was first registered and to record the zero-emission miles before exhaust emissions start. These changes will only apply where the benefit is being payrolled (the tax implications of the benefit are dealt with through payroll, and not via a P11D).
FPS in Place of an EYO
HMRC will continue running a pilot, in which the employer can send a Full Payment Submission (FPS) again for the final period of the last tax year, rather than being forced to use an Earlier Year Update online submission to make amendments. With this in place, Opera Payroll will be split into two phases:
- Phase 1 will be delivered as part of this release to allow for configurable archiving of employee end-of-year (EOY) summary payroll data and the ability to view and report on that archived data.
- Phase 2 will be delivered during 2020 to introduce the ability to revise employee EOY summary data (for a specific prior tax year) and to then submit the revised data via a prior year FPS to HMRC.
Statutory Rates, Bands, etc.
The usual adjustments to tax and National Insurance bands/rates, statutory payment amounts etc. are to be expected in 2020. The budget for England and Northern Ireland has been confirmed for 11th March 2020, with the dates for budgets on Scotland and Wales to yet be confirmed.
Updates to the student loans have been changed, in which the student loan plan 1 threshold will rise to £19,390 (from £18,935) and the plan 2 loans will rise to £26,757 (from £25,725). Both the deduction rate of 9% and the threshold and rate for postgraduate loans will remain unchanged.
SE Payroll Update DIP
Specifically introduced for Pegasus Opera 3 SQL SE, the Payroll update process has been converted to a Data Intensive Process (DIP), thus allowing for the update to be run server-side and be scheduled to run when required.
Finally, there is one non-payroll change coming in 2020…
Making Tax Digital – Fraud Prevention Amendments
Any sites that require Maxing Tax Digital (MTD) functionality which has not been upgraded to Opera 3 (2.63.00), will need to be upgraded to this release in readiness for the new MTD fraud header amendments. HMRC have still yet to confirm when they will start to validate VAT Returns in line with these new amendments.
If you want to find out more about the changes come to Opera Payroll or need assistance, please contact the Synergy Technology team for help. Either send an enquiry through on our contact page or give us a call on 0345 456 0050.