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case study : payroll system selection & implementation

client : Capita SIP Limited

Capita SIP are one of the largest SIPP providers and Third Party Administrators in the UK. Income Drawdown is offered as part of their service to clients. Pension contributions are relieved for tax at source which, if the client withdraws those contributions under Income Drawdown, are treated as earned income and therefore subject to Income Tax at the prevailing rate. A payroll system is therefore required to correctly calculate tax deductions.

 

As part of a business-wide systems replacement programme, our client required to replace their existing drawdown payroll system with a system closely configured to the unique circumstances of Income Drawdown, reduce processing times and costs, eliminate the need for spreadsheets and integrate seamlessly with their pensions administration and cash management systems.

background

approach

Taxation under Income Drawdown is unique. Careful attention was paid to how a payroll system must operate in this situation and what functional gaps were represented by existing spreadsheets. In addition, the selection model was enhanced to include functionality that the business required to offer their clients in future.

 

A full market scan was completed to avoid the possibility of eliminating a viable solution in error. We considered with the client what processing alternatives were possible to optimise the function/cost model. Given the specific functionality required, a shortlist was quickly constructed and reduced to two systems.

 

Detailed vendor demonstrations were held requiring each vendor to prove how their system would operate taxation for Income Drawdown and what reconfiguration or redevelopment costs would be involved. Finally, as proof of use, a prototype of what was proposed as a preferred solution was constructed and demonstrated to the client's staff for their input and approval in principle.

 

Programme and Board level recommendations were prepared, including detailed budgets, interface definitions and relative fit to the Programme. This recommendation was accepted and implemented.

benefits delivered

The business enjoys a seamless, end-to-end, process for dealing with complex Income Drawdown payroll cases integrated with pensions administration and cash management systems.

 

Processing costs and times were reduced significantly, with the added benefits of fewer errors and complaints. Inland Revenue interfaces were developed and ready for use ahead of the deadline set by the Revenue for EDI transmissions.

 

The pre-existing spreadsheets were eliminated and their functionality subsumed into the payroll system offering a highly capable, efficient solution.

T

focal points ...

• UK largest SIPP provider

 

• Income Drawdown payroll solution

 

• multiple employments accommodated

 

• integrated with General Ledger

 

• integrated with Pensions Administration

 

• integrated with Cash Management

 

• integrated with HMRC EDI solution

 

• optimised function/cost model

 

• unique functionality incorporated

 

• complex spreadsheets eliminated

 

• solution required minimal code changes

 

• seamless processing implemented

 

• processing costs and time minimised

 

• implemented on time and to budget