Pay is one of the most important aspects of employment. However, payroll is also a complex and specialist area, requiring expertise to ensure employees are paid accurately and that businesses remain compliant with UK tax and employment requirements.
From National Minimum Wage obligations and National Insurance contributions to income tax, pensions and auto-enrolment, there are many areas for employers and payroll teams to keep on top of.
With National Payroll Week taking place from 7-11 September, it is also a good opportunity to recognise the important role payroll colleagues and teams play within an organisation. A simple thank you can go a long way. Recognising employees is not only a positive thing to do, but can also contribute to employee engagement and a positive workplace culture.
Alongside recognising payroll teams, there are several important payroll and pay-related developments employers should be aware of.
New Acas guidance on agency workers
Acas has published new guidance on agency workers, bringing together key information about the rights of agency workers, the responsibilities of employment agencies and the role of umbrella companies.
The guidance covers several important areas, including:
- Employment status
- Agency obligations
- Pay arrangements
- The legal rights available to workers from their first day
- Additional rights that apply after completing 12 weeks in a role.
Agency workers are generally employed or engaged by an employment agency and then placed with a hiring organisation for a temporary assignment. Understanding their employment status is particularly important, as an individual’s legal rights can vary depending on whether they are classed as an employee, worker or self-employed.
For employment agencies, the guidance also sets out key legal obligations. These include providing workers with a Key Information Document, issuing written terms and conditions, and providing clear information about assignments, including pay, working hours and benefits.
The guidance also looks at umbrella company arrangements. In these circumstances, the umbrella company will typically act as the individual’s employer, processing their pay through PAYE and making the relevant deductions before paying the worker. As a result, the individual will usually be treated as an employee of the umbrella company.
For employers using agency workers, understanding these arrangements and the rights that apply is important to help ensure the correct processes are being followed.
Further changes to tipping laws coming in 2026
Businesses that fall within the scope of the Employment (Allocation of Tips) Act 2023 should also be aware of further changes coming later this year as part of the Employment Rights Act 2025.
The changes will introduce additional requirements around consultation and the review of tipping policies.
Before developing the first version of a written tipping policy, employers will be required to consult with their workforce, trade union or workforce representatives.
Once a policy is in place, it must be reviewed at least once every three years, with the same consultation process required when the policy is reviewed.
Employers will also be required to make a written, anonymous summary of the views expressed during consultations available to all workers.
An updated draft Code of Practice has been published and is currently subject to public consultation.
Employers operating tipping arrangements should therefore review their existing processes and policies to understand whether changes will be required.
HMRC guidance for short-term business visitors
HMRC has also published new guidance for employers managing short-term business visitors to the UK.
The guidance provides information on Income Tax and National Insurance Contributions and is intended to help employers understand their obligations when dealing with employees or workers visiting the UK on a short-term basis.
Getting the treatment of short-term business visitors wrong can create a risk of errors, as well as potential interest and penalty charges. Employers with international employees or regular business visitors should therefore make sure they understand the relevant requirements.
You can access the HMRC guidance on short-term business visitors.
Mandatory payrolling of benefits in kind from April 2027
Looking further ahead, the mandatory payrolling of Benefits in Kind (BIK) has been confirmed and will be phased in gradually from April 2027.
Payrolling Benefits in Kind involves including the estimated value of non-cash employee benefits directly through the regular payroll, rather than reporting them separately using an annual P11D form.
At present, payrolling Benefits in Kind remains voluntary. However, with mandatory payrolling set to be introduced from April 2027, employers should start considering what this could mean for their payroll processes and systems.
Further draft legislation and guidance is expected in due course, which should provide more detail on how the changes will be implemented.
Keeping payroll compliant
Payroll is an area where accuracy is essential. With changes to employment rights, taxation, National Insurance, benefits and pay arrangements continuing to develop, employers need to ensure their payroll processes remain up to date.
National Payroll Week provides a timely reminder of the important role payroll teams play, but it is also a useful opportunity for employers to review their current processes and consider whether they have the right expertise and support in place.
From agency workers and tipping requirements to benefits in kind and tax obligations, staying ahead of changes can help employers avoid unnecessary errors, compliance risks and potential penalties.
