COMPLIANCE
What’s discussed at the CIPP technical panel? The last panel was held on 5 October 2022 and the panel discussed an array of topical payroll items. Approved mileage allowance payments (AMAPs) Following on from the sharp increases to petrol and diesel prices in the UK earlier this year, the CIPP conducted a small survey to gain more quantitative data on the matter. This explored whether businesses regularly pay above the current rates, whether they would pay more if the rate was higher and the administrative burden of paying over the current rates. The technical panel circulated the survey to their networks, and we received a healthy response. The high-level findings were: l 87% of businesses pay the ‘approved rate’ of 45p per mile l 41% don’t pay over the ‘approved rate’ as they view those rates as a guide l 77% would increase their payments to workers if the ‘approved rate’ increased l 37% believe the ‘approved rate’ should increase by 25% (56p / 31p) l 36% believe the ‘approved rate’ should increase by 50% (67p / 37p). Due to the political landscape and the changes to government we’ve experienced in the last few months, the panel agreed that this wasn’t the right time to put a case forward to HM Treasury to have the AMAPs reviewed. The panel does believe that as part of the cost-of-living crisis, it could be worthwhile targeting certain types of workers who this will be impacting the most. Workers who use their personal vehicles to commute not only to and from work, but those who use those vehicles to travel throughout the day between jobs, for example, care workers. Conversation led into how the panel could make changes in this space. We discussed previous work carried out by the Low Incomes Tax Reform Group, which looked at tax credits and universal credit (UC). We considered how the increase to AMAPs would fit into the levelling-up agenda. Geographical location was discussed due to the disparity of fuel prices across the country. It was suggested that
employers could promote the cycle to work scheme to encourage less spending and promote going green, or recommend that employees use public transport. However, for those employees residing in rural areas, using public transport could quite easily double their commuting time, or the use of bicycle wouldn’t be feasible due to the length of the commute. It’s encouraging to see green initiatives encouraging the use of fully electric or hybrid cars, however, most workers aren’t in a financial position to pay for an electric car in the first instance. Cost of electric has gone up, so one saving unfortunately comes with another price tag. More needs to be done for those most impacted by the cost-of-living crisis for them to be able to get to work, and to keep working. Cost-of-living In September, the CIPP ran a quick poll which asked, ‘Would you consider changing pay frequencies to assist with employee’s finances?’ The overwhelming majority, of three quarters of respondents, confirmed they wouldn’t consider this option. Of course, changing pay frequencies can be a huge undertaking for larger businesses, can cause payment issues and may come at considerable cost. It’s therefore understandable that many companies wouldn’t be willing to make this move. However, 20% of respondents being willing to make that change is not insignificant. It shows the focus that’s currently on employee financial well-being, which will hopefully continue to grow in the future. The panel discussed the impact of changing pay frequencies, and the impact that has on UC. Employers should be made The panel discussed the increase to petrol and diesel prices and considered whether the AMAPs amount should be increased
aware of the interaction between payroll and UC when implementing schemes or making changes to support staff through the cost-of-living crisis. The conversation led into the popular topic of pay on demand, as this is being implemented in many businesses to support the financial well- being of employees. It shows the focus that’s currently on employee financial well-being, which will hopefully continue to grow in the future Due to the impacts of cash payments on UC, the panel considered some alternatives employers could offer to assist employees throughout the crisis: l providing non-cash vouchers to assist with food shopping l offering meals to employees while at work l providing childcare. Government changes The growth plan, which was announced on 23 September 2022, delivered a plethora of change; some of which has remained in place, the majority of which has been u-turned. At the time of the panel meeting, the only U-turn related to the abolition of the additional rate of income tax, i.e., this rate would no longer be abolished, but would continue to apply. The clear consensus was that the payroll profession has seen an unprecedented amount of change this tax year. With every change comes: l an increased number of queries for payroll professionals to handle l software developers having to amend calculations and push out updates l wider business communications to employees explaining changes l financial forecasts required for employers. This just goes to show the amount of work payroll professionals must handle because of policy changes. We handle these changes as part of our ‘business as usual’ activity, however, the amount of change experienced this year certainly isn’t ‘usual’ in any way, shape or form! n
How can members get involved in the technical panel? The CIPP is keen to hear questions and topics that members would like to see debated and discussed with the technical panel. If you have anything you’d like to ask, please email the policy team, at policy@cipp.org.uk to get your issues on the agenda.
15
| Professional in Payroll, Pensions and Reward |
Issue 86 | December 2022 – January 2023
Made with FlippingBook - Online magazine maker