IRIS PAYE Master April 2021 Product Update

Student Loan Thresholds – The annual thresholds have been updated in line with legislation for 2021/2022:

• Plan Type 1 increased from £19,390 to £19,895
• Plan Type 2 increased from £26,575 to £27,295
• Plan Type 4 is new for April 2021 and has a threshold of £25,000
• Postgraduate Student Loans remains at £21,000

Tax, NI, SSP, SMP, SAP, SPP & ShPP – The rates for tax, NI and statutory payments have been updated in line with legislation for 2021/2022.

Minimum Wage – Minimum wages rates have been updated in line with legislation for 2021/2022.

AE Parameters – The AE Parameters have been updated in line with legislation for 2021/2022.

In light of changes made by HMRC to the Starter Checklist, on Employee | Starter/Leaver | Starter, we have added a Student Loans & Postgraduate Loan label with Plan Type 1, Plan Type 2 and Plan Type 4 tick boxes, thus replacing the current Student Loans section. This allows you to select one or multiple Student Loan plans for employees.

Following the updates to the Starter Process, we have renamed the following:

• Employee Statement frame is now Starter Checklist
• Student Loans is now Student Loans & Postgraduate Loan
• Postgraduate Loan Indicator is now Postgraduate Loan
• Student Loan Indicator is now Plan Type 1
• Employee Statement not completed is now Starter Checklist not completed by this employee
• Existing employee (This is not a new employee) is now This employee is not a new starter to the PAYE Scheme

Statements A, B and C have been changed to:

• Statement A: Do not choose this statement if you’re in receipt of a State, Works or Private Pension. Choose this statement if the following applies. This is my first job since 6 April and since 6 April I’ve not received payments from any of the following: Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit
• Statement B: Do not choose this statement if you’re in receipt of a State, Works or Private Pension. Choose this statement if the following applies. Since 6 April I have had another job but I do not have a P45. And/or since the 6 April I have received payments from any of the following: Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit
• Statement C: Choose this statement if: you have another job and/or you’re in receipt of a State, Works or Private Pension

Expat Screen – Under Employee | Starter/Leaver | Expat, we have updated the Student Loans & Postgraduate Loan label with the following fields:

• UK Plan 1
• UK Plan 2
• UK Plan 4
• UK Postgraduate Loan

The labels have also been renamed as follows:

• Student Loans is now Student Loans & Postgraduate Loan
• UK Postgraduate Loan Deduction is now UK Postgraduate Loan
• UK Student Loan Deduction is now UK Plan 1

On the Attachment of Earnings screen, if you select more than one UK Plan Type, the system will save the plan with the lowest figure in the Student Loan section.

Sundry Screen – On the Employee | Starter/Leaver |Sundry tab, we have changed the Previous Employee Code label to Previous Employee Code / RTI Pay ID.

Starter Checklist Reports – We have changed the Starter Checklist reports to match the layout provided by HMRC.

Following the introduction of Student Loan Plan Type 04 Scotland, which has a threshold of £25,000 and a 9% deduction rate for tax year 2021/2022 onwards, on the Att’ments | Employee Details |Type, Student Loan | Plan Type drop-down, we have added the number 4.

Note: You will be informed by the current SL1 notification process if any of your employees should move to Student Loan Type 4 from Plan Type 1.

Student Loan Rates – Under Govt | Sundry, we have added a new Plan Type 4 frame which includes Annual Threshold and Rate fields. Above Termination & Sporting Testimonial, we have created a Student Loans frame.

Payroll Calculation – Although the threshold differs when calculating Student Loan Plan Type 4, there is no change to the rate or method when calculating student loan deduction.

Government/Pension Parameters –  In the SUNDRY STATUTORY RATES section, we have added the Annual Threshold and associated Rate for Plan Type 4.

RTI Validation – RTI submissions have been updated to include all Student Loan Plan types. The FPS Student Loan Year to-date value will be a combination of Plan Type 01, 02 and 04 deductions where all, or either, have existed in the current year.

Conversion – Conversion has been updated to include the new student loan plan type.

Off-payroll working rules are more commonly known as IR35. This legislation allows HMRC to collect additional payments, where a worker provides their services through an intermediary to another person or entity. The intermediary, in this case, is another individual, a partnership, an unincorporated association or a company.

All public sector clients and medium or large private sector clients are now responsible for deciding a worker’s employment status. This includes some charities and third section organisations.

Following the last-minute announcement by the Government, in light of the COVID-19 outbreak, the legislation for implementation of the Off-Payroll Working (IR35) in the private sector was delayed until April 2021

If the off-payroll working rules apply, the fee payer (the public authority, agency or other third party who is responsible for paying the worker’s intermediary) must:

• Calculate a deemed direct payment to account for employment taxes associated with
• the contract
• Deduct those taxes from the payment to the worker’s intermediary
• Report taxes deducted to HMRC through RTI, Full Payment Submission (FPS)
• Pay the relevant NICs

Deemed Direct Payment

The deemed direct payment is the amount paid to the worker that should be treated as earnings for the purposes of the off-payroll rules.

To calculate the deemed direct payment, you must:

1. Work out the value of the payment to the worker’s intermediary, having deducted any VAT due
2. Deduct the direct costs of materials that have, or will be used in providing their services
3. Deduct expenses met by the intermediary, that would have been deductible from taxable earnings if the worker was employed
4. The result is the deemed direct payment. If this is nil or negative, there is no deemed direct payment

Off-payroll Worker tick box – On Employee Details | Sundry, we have added a new frame and field labelled Off-payroll Worker which will be enabled and unticked by default. A new tick box has also been added next to the Off-payroll Worker field.

Note: To successfully set the Off-payroll Worker indicator, the software may send you a warning to remove or change fields. If you proceed to untick the field after receiving the warning, any changes made to the other fields will not revert to their original state.

Report Off-Payroll Worker with FPS – We have added an Off-payroll Worker flag in the FPS.

Employee Record – Under Reports | Report Selector | Employee Record | Sundry section, we have added an Off-payroll Worker field.

Conversion – Conversion has been updated to include the Off-payroll Worker indicator.

Earlier Year FPS Menu Item – It is now possible to send a Full Payment Submission (FPS) for a previous tax year and after 19^th April in the current tax year. From 2020/2021 onwards, you can no longer send an Earlier Year Update (EYU) to correct any mistakes made in the previous tax year. To enable you to submit an Earlier Year FPS, on the RTI Online Services tab, we have replaced the Send Earlier Year Update option with a Send Earlier Year FPS menu item.

Note: The Send Earlier Year FPS menu item will only be visible in the software from the 2020/2021 tax year and can only be used from 2021/2022 and subsequent tax years to correct data from the previous year.

Earlier Year Update – We have removed the EYU menu item from the tax year 2020/2021 and onwards. You can only send an EYU for submissions up to Tax Year 2019/2020.

Earlier Year FPS Employee Selection – When navigating to RTI Online Services | Send Earlier Year FPS, an Earlier Year FPS – Select Employee screen will display, allowing you to choose an employee from the list. The screen has a Select Employee frame as well as a Submission frame and drop-down. The purpose of this function is to allow you to send an Earlier Year FPS where a company is new to IRIS PAYE-Master and has no knowledge of employees that left whilst on another payroll.

Pending – When selecting RTI Online Services | Send Earlier Year FPS, the software will prompt you to complete any outstanding FPS submissions (either Normal or Earlier Year) before proceeding with sending a new one.

Also, the Earlier Year FPS – Data Entry screen has a Pending button which will be disabled if there are no outstanding Full Payment Submissions.

FPS Changes for 2021/2022 – The FPS schema has been updated for tax year 2021/2022 in line with government legislation.

EPS Changes for 2021/2022 – We have updated the EPS schema for submissions relating to tax year 2021/2022.

On the Pay | Employment Allowance | State Aid, De Minimis State Aid screen, we have renamed the Industrial field to Industrial/Other. This change has also been made to the Employment Allowance screen in the Year-end Restart.

HMRC Audit File – We have removed the HMRC Audit file from the Help Files.

Password Length for Online Filing Credentials – On Company Details | Online Services | Password, we have increased the limit to 128 characters.

P60s – We have updated the P60s for year-end 2020/2021 and to include Statutory Parental Bereavement Pay (SPBP).

Scottish Widows Contributions File Changes

The Scottish Widows Contributions file has been updated in line with their specification. The following fields have been added:

• Employee pensionable salary for pay period
• Employee net regular contribution percentage
• Employer regular contribution percentage

Furlough Extension – The software/spreadsheet has been updated to incorporate the extension of the CJRS until 30^th September 2021.

Default Student Loan – Previously, when a new employee had more than one student loan selected in the Starter Checklist, the software assigned the lowest number by plan type. We have updated the software and it will now assign the number based on the lowest annual threshold of the selected loans.

Previous Re-Enrolment Date – An issue occurring during the Year-end | Clear Totals process where if a company had a Staging Date and a Previous Re-Enrolment Date for Automatic Enrolment, the Previous Re-enrolment Date was removed, has been resolved.