Payroll – an unsung hero of any successful practice

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Posted by: Dental Design 25th February 2021

How has it changed and are there changes ahead?

Efficient payroll is one of the nuts and bolts that keep a business running smoothly – the often-invisible glue binding everything together.

And what a year payroll has had! The industry was already preparing for planned changes to come into effect in April 2020, but after the Coronavirus hit and the UK went into its first national lockdown, it had to adapt, and fast.

With dental practices forced to close for a short period last year, and most having to modify employees’ schedules and working hours once they reopened, payroll processes would have needed to be up to the challenge.

Furlough as centre stage

The Coronavirus Job Retention Scheme (CJRS), referred to as ‘furlough’ by pretty much everyone, had the biggest impact on payroll and it is likely that your practice was part of the scheme since its introduction in March 2020.

At time of writing, furlough has been extended until the end of April 2021, having already had a couple of extensions and alterations. The fundamental object of the scheme is to help businesses retain employees, with the government paying a portion of their wages (up to a maximum of £2500 a month). At the start, the government also covered employer NI and statutory employer pension contributions, although this is no longer the case in furlough’s current form.

The furlough scheme adapted itself, broadly, to the pandemic’s timeline. In late June, in anticipation of lockdown measures easing over the summer, a Treasury Direction set out details of ‘Flexi Furlough’ to operate, initially, from 1 July to 31 October. This would allow employers to manage their workforce flexibly, by bringing furloughed staff back for any amount of time or shift pattern. From 1 August, reflecting the government’s expectation that people would soon be returning to work, the level of grant was also slowly tapered.

But in November, as the situation in the UK got tough again, the Chancellor announced that furlough would be extended to March 2021, with yet another extension, to April 2021, announced just a month later.

Furlough has put the resilience of payroll processes to the test, in an intense and ever-changing landscape. Resilience is key because although furlough took centre stage, there were a number of other new measures payroll had to contend with.

What else might affect your practice’s payroll?

From 6 April 2020, employment allowance (EA) for eligible businesses increased from £3,000 to £4,000 per year, allowing them to reduce their NICs liability. But from April 2021, EA can only be claimed if a business/charity has an employer’s NICs bill below £100,000 in the previous tax year.
If anyone at your practice drives a company car that was first registered at any time from 6 April 2020, tax rates are changing to encourage the use of low-emission or electric vehicles.
Also taking effect from 6 April 2020, if you did make a redundancy payment, note that employers must now pay Class 1A NICs on any part of a payment that exceeds the £30,000 threshold.
Employees are also now entitled to Statutory Parental Bereavement Pay (SPBP) upon meeting various criteria.
What wasn’t implemented as planned in 2020, though, was legislation for Off-Payroll working in the private sector (IR35); it was pushed back until April 2021. This allows HMRC to collect tax and NI from the employer, in cases where a worker provides their services through an intermediary.

If your head is spinning just reading this, Wagemate is a specialist provider that will manage your payroll and let you get on with running your practice. Using a provider will not just save you time, it will also save you stress, ensuring that all the latest measures are accounted for and that people are paid accurately and on time – which is essential, even if not everyone in your practice is on the same payment schedule.

Whether your practice is large or small, how you manage all the functions of payroll, which go way beyond wages, is central to successful operations. Get ahead, get organised and consider outsourcing for peace of mind.

To better manage your payroll, contact payroll specialists Wagemate today,
tel: 03330 102102 or email info@wagemate.com