PAYROLL INSIGHT
Timelines and guidelines
Liz LayMSc FCIPPDip FHEAACIPD, CIPP board director and tutor, provides a useful summary of some recent and impending changes that will affect you and your employer
W orking in the world of payroll there are always changes which can be both expected and unexpected that payroll professionals will continue to face. It feels, however, that changes over recent, current and forthcoming tax years are numerous – and that it can be a struggle within our busy processing schedule to try and remember them all. This article is aimed at highlighting some of the main areas of change and related key points as a reminder for easy reference in one place. The given yearly changes for tax, National Insurance contributions (NICs) and national minimum wage (NMW) rates are not included. Changes from case law are only included where they indicate significant change, and payrolling of benefits and optional payroll remuneration arrangements are also not covered. The information below identifies the effective date, the source (e.g. legislation, court case name), the subject, and the scope/effect. 6April 2018— IncomeTax (Earnings andPensions) Act 2003 —Post-employment noticepay (PENP) All payments in lieu of notice (PILONs) are now taxable and NICable. The PENP calculation ensures that even where an employer tries to hide the PILON payment in an ex-gratia payment it will still be subject to tax and NICs.
4 October 2018 —http:// bit.ly/334kgGE—Childcare voucher scheme (CCV), directly contracted childcare scheme The tax advantages available to new entrants to a CCV scheme or a directly contracted childcare scheme from the 4 October 2018 onwards have been removed. Parents can now apply for tax-free childcare (TFC) on-line which is outside the scope of employment. A parent will however have to tell their employer if they have signed up for TFC and are already receiving CCVs or directly provided childcare as they cannot receive both. 1 January 2019—Companies (Miscellaneous Reporting) Regulations 2018—Chief executive officer (CEO) pay gap reporting Companies must start reporting their CEO pay ratio in 2020 (covering CEO and employee pay awarded in 2019). The new requirements apply to companies reporting on their financial year starting on or after 1 January 2019. The requirements apply to large UK listed companies with over 250 employees. The first statutory disclosures will make companies justify the pay for top managers, who must be reported even if they are not a director on the board of the company, accounting for how their salaries relate to wider employee pay. Companies are to disclose annually the ratio of their CEO’s pay to the median, lower quartile and upper quartile pay of their UK employees.
13 February 2019 —The Social Security (Contributions) (Amendment) Regulations, SI 2019/85, Finance Act (No 2) 2017, Schedule 11 — Loan charge, disguised remuneration Payments made to employees by third parties are to be reported in real time information returns. (HMRC will recover pay as you earn income tax from the employer.) SI 2019/85 ensures that amounts which are caught under the ‘loan charge’ legislation in Schedule 11, in the form of loans provided through third parties and which remained outstanding on 5 April 2019, create liability to class 1 NICs. 14 February 2019 —Mencap v Tomlinson Blake [2018] EWCA Civ 1641 —NMW The case relates to social care workers on ‘sleep-in shifts’ where they provide overnight on-call support to patients but are expected to sleep through the majority of the shift, and whether the shift is working time for the NMW or whether a lower rate can be paid. Following the Court of Appeal ruling in favour of the charity the Supreme Court decided to hear the appeal which is unlikely to be before October 2019. Whilst any challenge is ongoing, employers must continue to comply with the law as it currently stands. 6 April 2019 —Pensions Act 2008, and the Employers’ Duties (Implementation) (Amendment) Regulations 2016 —Automatic enrolment (AE) contributions The total minimum contributions for AE schemes increased to 8% of employee’s
...changes over recent, current and forthcoming tax years are numerous...
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| Professional in Payroll, Pensions and Reward | September 2019 | Issue 53
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