MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Working time opt outs and maximum number of hours Q: When an employee opts out of the Working Time Directive (WTD) and agrees to work more than 48 hours per week is there still a maximum number of hours they can work, either weekly or as an average, over a period of time? A: If an employee has opted out of the WTD limit, there isn’t any limit to the number of hours that are worked per week. However, if the employee has more than one job, the amount is aggregated, so they would need to opt out of the directive for all of their employments.
will have an apprenticeship agreement that was signed by employer and apprentice. The apprenticeship provider will be able to assist in transferring the apprenticeship over to you as the new employer and provide the start and proposed end dates for the course. They will also be able to assist in transferring the funding liability over to you. An apprentice should have 20% of their time as ‘off the job’ learning, which allows them to study or perform activities that enhance their development. The apprentice continues to be employed during this period, so holiday entitlement would include this time. The apprenticeship provider may be able to give recommendations of a suitable process to follow for study time. Medical benefits and adding dependants Q: An employee has opted to pay medical insurance for his family, with the deduction to be processed through payroll. Can this be deducted from gross pay as a salary sacrifice? A: Private medical insurance (PMI) is not an item that maintains the tax efficiency of salary sacrifice like childcare vouchers (CCVs) or a cycle to work scheme. The employee could have this as a salary sacrifice, but the amount would still be paid by the employer under a salary sacrifice agreement, which will mean there is still a reportable benefit (see: https://ow.ly/em2e50TE6yV). Where the employer provides the PMI cover for the employee and the employee adds dependants to the policy at his own cost, this is known as making good. The amount that the employee makes good is deducted from the value of total benefit
for that employee. The residual amount is the amount that is considered a benefit in kind (BiK) and chargeable to tax only to the employee and Class 1A NI to the employer via the P11D. The amount that is paid by the employee to make good can be deducted from the employee as a net deduction as this element is paid for by the employee so is not considered a BiK.
Can PMI for an employee’s family be deducted through salary sacrifice?
Refund of CCVs Q: How do I refund an employee for CCVs through payroll if they were purchased over several tax years? I understand they can be refunded in exceptional circumstances and our CCV provider has agreed to issue a credit note. A: It is possible to refund CCV amounts to employees, but you shouldn’t refund your employee until the money is returned to you by the provider. Generally, the benefits provider enters into a negotiation with the employee and will agree the balance of the credit on their account. They will then charge an
Apprentice minimum wage and National Insurance (NI) category Q: Does payroll need to keep a record of the start of an apprenticeship, even if it started with a previous employer, in order to manage the correct national minimum wage (NMW) rate and NI category? Also, how is an apprentice’s leave entitlement managed? A: The start of the apprenticeship should be recorded to ensure the correct NMW rate is used. An approved apprenticeship Is there a limit on the number of hours an employee can work if they have opted out of the WTD?
| Professional in Payroll, Pensions and Reward | November 2024 | Issue 105 8
Made with FlippingBook - Online magazine maker