Awareness of ‘Employment’ What do We Need to Know Stephen Tiley acma cgma, Finance Manager Gwent Association Voluntary Organisations (GAVO)

Introduction GAVO – “For Communities with Communities”  GAVO is a Registered Charity and a Company Limited by Guarantee  Membership of GAVO is open to all voluntary organisations which are based or work in Blaenau Gwent, Caerphilly, Monmouthshire, Newport and Torfaen  Our mission, “To improve the lives and opportunities of communities through partnership and collaboration”. Working with individuals and community groups, as well as the public and private sector, GAVO supports the community through:  The provision of information, advocacy and support to communities and groups Recruiting Volunteers and providing a comprehensive volunteer service to individuals and host organisations Promoting opportunities for Voluntary Organisations to work together through participation Providing services for Voluntary Organisations and other charities e.g Payroll, HR and training services Encouraging voluntary and statutory organisations to work together in planning new services Responding to the needs of the community by identifying unmet needs and developing new services Representation and partnership with government and local authority.

Why do we need to look at this at all?  Changes in Legislation and Organisational Responsibilities.  Could we be in breach of these rules already – how sure are we?

What defines an Employee?  An employee is someone who works under a contract of employment as opposed to a contract for services.  A person may be an employee in employment law but have a different status for tax purposes. Employers must work out each worker’s status in both employment law and tax law - how do we do that?  Do we know the rights and responsibilities of both parties and how to work out or gather the details?  Are there specialist services that we can make use of at an affordable level (and can we afford not to)? (e.g. GAVO)  Do we currently or will we need to technically employ people?

Working out employment status for an employee Someone who works for a business is probably an employee if most of the following are true:  they’re required to work regularly unless they’re on leave, eg holiday, sick leave or maternity leave  they’re required to do a minimum number of hours and expect to be paid for time worked  a manager or supervisor is responsible for their workload, saying when a piece of work should be finished and how it should be done  they can’t send someone else to do their work  the business deducts tax and National Insurance contributions from their wages  they get paid holiday  they’re entitled to contractual or Statutory Sick Pay, and maternity or paternity pay  they can join the business’s pension scheme  the business’s disciplinary and grievance procedures apply to them  they work at the business’s premises or at an address specified by the business  their contract sets out redundancy procedures  the business provides the materials, tools and equipment for their work  they only work for the business or if they do have another job, it’s completely different from their work for the business  their contract, statement of terms and conditions or offer letter (which can be described as an ‘employment contract’) uses terms like ‘employer’ and ‘employee’

Legal Requirements for ‘Employers’ As an employer, you will need to meet the following criteria to run a payroll service.  You have to operate PAYE as part of your payroll. PAYE is HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment. (You’re exempt from PAYE if none of your employees is paid £112 or more a week, gets expenses and benefits, has another job or gets a pension. However, you must keep payroll records)  When paying your employees through payroll you also need to make deductions for PAYE.  Payments to your employees include their salary or wages, as well as things like any tips or bonuses, or statutory sick or maternity pay.  From these payments, you’ll need to deduct tax and National Insurance for most employees. Other deductions you may need to make include student loan repayments or pension contributions.  If you run payroll yourself, you’ll need to report your employees’ payments and deductions to HMRC on or before each payday. Your payroll software will work out how much tax and National Insurance you owe, including an employer’s National Insurance contribution on each employee’s earnings above £155 a week. You’ll need to send another report to claim any reduction on what you owe HMRC, e.g. for statutory pay.  You will need to pay HMRC based on your reports.  As part of your regular reports, you should tell HMRC when a new employee joins and if an employee’s circumstances change, e.g. they reach State Pension age.  You have to run annual reports at the end of the tax year - including telling HMRC about any expenses or benefits.

Pensions – Auto Enrolment  Every employer with at least one member of staff now has a duty to include those who meet criteria into a workplace pension scheme and contributing towards it.  The detailed formula for agreeing whether to auto enrol is as follows:  Figures correct as of 2015/2016. *SPA = state pension age  1 Has a right to join a pension scheme If they ask you to, you must provide a pension scheme for them, but you don’t have to pay contributions.  2 Has a right to opt in If they ask to be put into a pension scheme, you must put them in your automatic enrolment pension scheme and pay regular contributions.  3 Automatically enrol You must put these members of staff in your automatic enrolment pension scheme and pay regular contributions. You don’t need to ask their permission. If they give notice, or you give them notice, to leave employment before you have completed this process, you have a choice whether to automatically enrol them or not.  Each employer has a date by which they need to comply with the law. This is called your staging date. This can be located at : Monthly Gross Earnings Age Weekly Gross Earnings SPASPA - 74 £486 and belowHas a right to join a pension scheme (1)£112 and below Over £486 up to £833Has the right to opt in (2)Over £112 and up to £192 Over £833Has the right to opt inAutomatically Enrol (3)Has the right to Opt inOver £192

The Reality  ‘STORY TIME’ – from ANN

Gwent Association of Voluntary Organisations  GAVO’s Finance Team provides a payroll service for Core operations plus an additional 26 organisations. Our Finance team offers the following:  Calculation of Salary Payments  PAYE calculations and payments  Administration of pensions  Administration of sickness pay and SSP  Administration of Statutory Maternity Pay  Completion of ad hoc forms  GAVO also has designated experts within our core function which include the following:  HR  Training

Conclusion  Acknowledgement and response to the change in legislation  Acknowledge and respond to the requirements of the Diocese  The next step?