Helping users of HMRC’s Basic PAYE Tools undertake auto enrolment calculations

Back in March 2015, The Pensions Regulator (TPR) issued a consultation document on a proposal to update HMRC's Basic PAYE Tools (BPT) with auto enrolment assessment functionality. The responses to the consultation have been put together and a response from TPR has been offered.

TPR explain in the response document:

"While there is no legal requirement to have software, our experience to date indicates that software supports an employer’s compliance. In particular, without adequate software, BPT users may not know how to assess their workers or calculate contributions. This presents an increased risk of both initial and ongoing non-compliance among BPT users."

As you can see, TPR recommend using software for payroll and auto enrolment due to supporting a business' efforts towards compliance. The consultation was held in order to find out if an auto enrolment tool should be developed for the BPT software.

TPR gained responses from 47 stakeholders included employers who use the tool, payroll providers, pension providers and employer representative bodies.

One risk that the consultation identified was that: "without adequate software, BPT users may not know how to assess their workers or calculate contributions, presenting an increased risk of both initial and ongoing non-compliance among BPT users".

In addition to this, TPR responded to the suggestions that BPT users were going to attempt to run their auto enrolment solution manually; something that TPR highly recommend against.

TPR explained:

The consultation responses indicate that a high proportion of BPT users would not seek the use of commercially available software. Attempting to assess their workforce and calculate contributions manually could lead to errors, burden and non-compliance.

While TPR agree that there may be an impact on the marketplace for payroll and auto enrolment software, they decided that the tool that they will develop for auto enrolment within BPT will provide basic functionality while encouraging users to adopt commercial payroll products such as The IRIS AE Suite™.

The following suggestions were made by TPR to promote the adoption of a fully integrated auto enrolment solution:

• Provide a list of payroll providers that employers could use; views varied from a list of recognised providers, free/low cost only, or all providers available


• Encourage BPT users to choose pension schemes with integrated payroll solutions


• State explicitly what low cost solutions could be, eg £x per year, to help dispel BPT user fears that low cost is still too expensive


• Emphasise time saving of using an integrated system in the medium to long term


• Work with the payroll market to provide incentives to BPT users who switch to an integrated product

Using a fully integrated solution for auto enrolment is extremely important for ensuring compliance as well as streamlining your payroll and auto enrolment process.

The IRIS AE Suite™ automatically assesses your employees' eligibility for auto enrolment, distributes payslips and P60s to your employees and publishes the legally required pension communications to your employees' secure online portal. All of this is done within your payroll software, each time you run the payroll.

This means that there are almost no extra steps to running your auto enrolment apart from uploading your pension output file to your pension provider.

You can read more from the consultation document from TPR.

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