Manchester, UK – After weeks of speculation, the Chancellor Rachel Reeves today delivered the first Labour budget in 14 years, detailing a raft of fiscal changes and tax rises aimed at plugging a £22 billion ‘black hole’ in the public finances.
Many of the pay changes and tax rises announced, including an increase to employer National Insurance contributions (NICs) and increases to the National Minimum and Living Wage rates, will have a significant impact on payroll, requiring enhanced systems that can handle the changes and prevent manual error.
CEO at BrightHR, Alan Price, says:
“According to a recent survey by BrightHR, only 19% of business owners feel confident in handling legislative changes with their own in-house expertise and resources, which is particularly concerning in the context of significant pay changes and tax hikes announced in the Budget today.
“Especially now, business owners must make sure they have accurate and efficient payroll processes in place to handle significant adjustments to wages, NI contributions, and sick pay, among other pay and tax changes.
“Payroll mistakes are easy to make, especially when rates change, putting businesses at risk of costly penalties and enforcement action from HMRC. Many clients who we onboarded to BrightHR Payroll, our enhanced payroll solution, had existing errors in their payroll processes, highlighting the need for software that automatically adjusts for legislative developments and is managed by CIPP-qualified professionals.
“By conducting payroll in-house or without adequate expertise, business owners risk being hit by additional payroll costs when tax changes come into effect in April 2025, at a time when budget control will be paramount.
“I would advise business owners to use an integrated payroll and HR solution with full support from CIPP-qualified professionals to ensure they are fully prepared for tax and wage increases and can avoid any additional costs due to fragmented and inaccurate payroll processes.”