Surrey-based accountancy firm TWP has urged employers to prioritise compliance and seek support if they need it in the face of new payroll regulations coming into force from the start of the 2024/25 financial year.

“Compliance is key” was the message delivered by the firm, which provides a full range of personal and commercial accounting services in the South East.

Most critical in light of high living costs, said TWP, is ensuring employees are paid according to their entitlement under the National Minimum Wage and National Living Wage, which recently experienced one of the most significant rises in recent history.

A major financial boost to employees, failure to update rates of pay could cost employers substantially if staff are paid incorrectly.

The same, cautions Emma Strugnell, Client Payroll Manager at TWP, is true for National Insurance rates.

Emma said: “Employee National Insurance Contributions (NICs) have fallen twice in quick succession, so employers are at an increased risk of an inaccurate payroll.

“The rate is now set at eight per cent for employees – but remains at, where applicable, 13.8 per cent for employers.”

The firm further stressed that employers within specific industries must get to know their obligations, as some sectors may be particularly vulnerable to error and subsequent penalties.

“Employers with irregular or part-year workers must stay updated on changes to the Working Time Regulations 1998,” said Emma.

Holiday allowance for these workers should now be calculated as 12.07 per cent of the hours worked in that pay period, paid either on an accrual or rolled up basis.

Additionally, TWP said, hospitality and related sectors where gratuity is common should now abide by the Employment (Allocation of Tips) Act 2023, requiring employers to pass on all tips equitably to employees via a tronc, without withholding a percentage to cover administrative or payment costs.

“Ultimately,” Emma said, “we want to see all employers consistently meeting their obligations and ensuring employees are paid and allocated holiday correctly.

“What’s most important for employers is to stay updated and ensure that you follow new regulations as they come in.

“Prioritising compliance is key at times of change, particularly for SMEs and independent businesses where meeting complex legislative requirements without external support might be a challenge and where penalties could be hugely damaging.

“When new obligations for employers come in, it’s natural for business owners to feel that payroll is something intimidating or out of their control – but this doesn’t have to be the case.

“I’d urge anyone who needs support with their payroll to get in touch with us and see how easy it can be.”