MEMBERSHIP INSIGHT
On your behalf
Policy team update
Diana BruceMCIPPdip, CIPP senior policy liaison officer, provides details about recent and ongoing consultations
A plethora of consultation documents have been published in recent months, so the CIPP policy team have been busy gaining members’ views on the proposals and changes to processes that are in the pipeline (some of which are summarised below). Please look for ways of getting involved through News Online , email and social media. It may be through a survey or a think tank or directly – whatever the method, if you have experiences to share or views on the subject, please do get involved – we need your expert knowledge to help influence policy. The Employment Allowance (Excluded Persons) Regulations 2019 Draft regulations were published for technical consultation in July 2019 which, if enacted, will mean the employment allowance (EA) is to be restricted to those with a secondary (i.e. employer only) class 1 National Insurance contributions (NICs) liability of less than £100,000 in the previous tax year. The draft regulations reclassify the EA as state aid. Employers will need to ensure that any EA claimed does not take them over the state aid limit for the sector in which they operate. The state aid sectors are: agriculture, fisheries and aquaculture, road haulage, and ‘other’ (industry). It is unlikely that the payroll function will currently be involved to any extent (if at all) but we recommend that you talk to colleagues within your organisation who are responsible for accounting for government funding that constitutes de minimis state aid. An employer could become ineligible where it is in receipt of ‘de minimis state aid’, and claiming the £3,000 EA will breach the ceiling of 200,000 Euros. The draft regulations as written, will
bring about significant reporting and administrative challenges to payroll processes for reporting via real time information (RTI) by employers that
contracts entered into or payments made on or after 6 April 2020. The draft legislation: ● defines when non-public sector organisations, including unincorporated organisations, will be considered to be ‘small’ and therefore not within the scope of the reform, and ● includes provisions to ensure that all parties in the labour supply chain are aware of the organisation’s decision and the reasons for that decision, and will introduce a statutory, client-led status disagreement process to allow individuals and fee- payers to challenge the organisation’s determinations. HMRC consulted on the detail of the reforms earlier this year and in April 2019 published guidance (http://bit.ly/2ZRih6X) on the action engagers can take to prepare for the reforms. (See pages 20–21 for details.) The consultation closed on 5 September 2019. Goodwork plan: establishing a new single enforcement body for employment rights As part of the ‘Good Work Plan’, in July 2019 the government published a consultation (http://bit.ly/2yLipby) which seeks views on whether establishing a new single enforcement body for employment rights could improve enforcement for vulnerable workers and create a level playing field for the majority of businesses Pensions (DWP), which is responsible for policy on statutory sick pay (SSP), is considering reforms (see ‘Health is everyone’s business’ below), including options to strengthen enforcement. One of the questions posed in the consultation is whether a new single enforcement that are complying with the law. The Department for Work and
continue to claim the EA from April 2020. The following details are to be reported in the employer payment summary (EPS): ● EA indicator (already present in the EPS) ● the state aid sector in which they operate ● the amount of state aid allocated in the current tax year, plus the amount of state aid claimed in the previous two tax years. The value is to be expressed in Euros, using an exchange rate published by HM Revenue & Customs (HMRC) on 1 April. The EA eligibility declaration will cease to be carried over – by virtue of the £100,000 secondary NICs exclusion level – so must be considered and declared annually. This consultation closed on 20 August 2019. ...EA eligibility declaration will cease to be carried over... Off-payroll working in the private sector HMRC has published a consultation on the draft legislation and measures being included in the 2019–20 Finance Bill (http://bit.ly/2TamS14) which confirm that reforms to off-payroll working in the private sector for medium and large businesses will come into effect from April 2020. The reforms will make organisations responsible for determining whether the existing rules apply to the contractors they hire and ensuring the necessary employment taxes are paid. This measure will have effect for
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| Professional in Payroll, Pensions and Reward | September 2019 | Issue 53
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