Official publication of The Chartered Institute of Payroll Professionals PROFESSI NAL Issue 66 December 2020 - January 2021 in Payroll, Pensions & Reward
Customer and client fulfilment
It’s a real stretch Beyond December
The (payroll) nightmare before Christmas Service delivery challenges
Saying thank you? Seasonal gifts
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“Hope is being able to see that there is light despite all of the darkness.” Desmond Tutu (1931– ) (https://bit.ly/33d4U4i)
Recently, while wondering how people react in awful times, I researched the Spanish flu pandemic of 1918, and remembered watching in my teens the
weekly applause for NHS staff, during lockdown. Well, it’s that annual moment to extend my thanks to all those at the CIPP and beyond, without whose support and input production of the magazine would be impossible. Particularly meriting of my appreciation are the designers Sam Parkes and James Bartlett, the policy team for their continual supply of great articles, and Dawn Baxter and colleagues for their support and timely delivery of in-house content. Bring on 2021!
film The Seventh Seal , in which a desperate group somewhere in Europe strive to avoid
the plague and evade death (depicted as a stalking grim reaper). During this horrible year I have found comfort and cheer in doing simple things, such as Skype-ing my grandchildren, and in the inspirational actions of countless people – especially the following individuals. Marcus Rashford, a highly paid professional footballer, who triggered government policy turnaround on school meals provision. Annemarie Plas for initiating Clap for Carers, the UK-wide
Mike Nicholas MCIPP (editor@cipp.org.uk) Editor
Chair’s message
I hope this finds each of you safe and well and adjusting to the new ways of working. The feature topic this issue is customer and client fulfilment. Whether providing a service to an external or an internal client, I have some thoughts and messages to help
The key link here is communication. Very often once a commercial agreement is made, or objectives set for the service, those items may be parked. It is especially important to revisit and refresh them and keep the priorities front of mind for all delivering the service. Transparency and regular communication help to resolve items quickly and highlight where either the internal or external customer maybe hampering the service team, by not delivering information for action, either in a timely manner or to a quality expected. Client fulfilment can only be achieved if both parties are willing to listen, keep an eye on what is important and work together to overcome obstacles. This in turn, moves a service agreement to a partnership approach. I hope you find the articles contained in this edition of interest and of benefit to you, and please drop me a line if you want to discuss anything in more detail.
either situation. Very often in an external outsourced arrangement the most senior members of both businesses begin the process of tender response, pre-sales activity, system demonstration and contractual discussions. All this often happens either without anyone from the operational side of the business working alongside the team or perhaps from a distance. Therefore, any handover to operations once an agreement is made, and is in service, must ensure that all the finer points from the earlier conversations are documented and understood. It can be the smallest nuance in the early discussions that, if not transferred, can make a big difference to the service management and the expectations of the client and the service team. Take this scenario to an internal service provision, and you have the same issue if what is discussed in the boardroom as expectation is not then communicated to the team operating day to day services.
Jason Davenport MCIPP MIoD (jason.davenport3@cipp.org.uk) Chair, CIPP
What a year! I’m sure it’s one which we will not forget, personally or professionally. I am writing this as we hear the news that the coronavirus job retention scheme has been extended and the job support scheme CEO’s message
dominated by MS Teams and Zoom (other platforms are available!), where human interaction in celebrating our profession has been almost non-existent. Let’s focus on next year – may 2021 be the time when we get together for the Annual Conference and Excellence Awards at the Celtic Manor Resort, a ‘double’ Graduation celebration to celebrate 2020 and 2021 successes, National Payroll Week, and the chance in our 41st year to actually celebrate our 40th anniversary in person! Finally, on behalf of all the staff and board here at CIPP, I wish you all a well-deserved break over the Christmas and New Year period. May it be spent with family, friends and loved ones. Keep safe and well.
postponed as we move into another national
lockdown. Payroll professionals; key workers indeed. Certainly, our Advisory Service has had its busiest year ever; hopefully, we have been able to give you help and assistance during these turbulent times. May I thank all who have availed of the assistance as, despite thousands of calls and emails at times and having to wait to be answered, I have been assured by the team that not one angry or unkind comment has been made by members in seeking help and guidance. That’s really appreciated, and it is a testament to your professionalism during these challenging times. This is a time when I normally reflect on the events we have delivered to you, our members. Well – it’s been a virtual year –
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 66 | December 2020 - January 2021
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at payrollpensionsandreward.org.uk
Contents
December 2020 - January 2021
THIS ISSUE’S FEATURE TOPIC IS CUSTOMER AND CLIENT FULFILMENT
24 Customer and client fulfilment
by Jerome Smail
Features
12
16
18
The (payroll) nightmare before Christmas by Lora Murphy
CJRS receives twelfth hour reprieve by Samantha Mann
Mental health support by Harriet Calver
22
27
20
Get ready for changes to off-payroll working rules by HMRC
Aggregation of earnings by Peter Minchinton
Labour market strategy by CIPP policy and research
| Professional in Payroll, Pensions and Reward | December 2020 - January 2021 | Issue 66 2
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Chief executive officer Ken Pullar FCIPP CIPP board of directors Jason Davenport MCIPP MIoD Stuart Hall MCIPPdip Dianne Hoodless MSc ChFCIPP FHEA Editor Mike Nicholas 0121 712 1000 | editor@cipp.org.uk Advertising Vickie Graham 07775 564 352 | advertising@cipp.org.uk Design James Bartlett, Nicole Davis and Sam Parkes design@cipp.org.uk Printing Warwick Printing Company Ltd
Homeworking expenses and benefits by CIPP policy and research
It’s a real stretch… by CIPP policy and research
32
34
Splitting of pension funds on divorce by Ian Neale
Saying thank you? by Gemma Mullis
36
35
Liz Lay MSc FCIPPdip Carole Pearson MCIPP Katie Sharpe ACIPPdip
Equal pay, dismissal, disability by Nicola Mullineux
Cliff Vidgeon BA (Hons) FCIPP CMA ACIS Clare Warrington MSc FCIPPdip AFHEA
Where next for AE? by Henry Tapper
Useful contacts
41
38
Education education@cipp.org.uk 0121 712 1023 Events events@cipp.org.uk 0121 712 1013 General enquiries enquiries@cipp.org.uk 0121 712 1000 Marketing and sales marketing@cipp.org.uk 0121 712 1033 Membership membership@cipp.org.uk 0121 712 1073 Training training@cipp.org.uk
Finding a partner in payroll success by Abigail Vaughan
The extended job retention scheme by Danny Done
Regulars
01 Editor’s comment, and
30 Payroll news 31 Reward
Chair’s andCEO’smessage
04 CIPPupdate
Events, news and developments
40 Industry news 41 Technology 42 So long, farewell... Vince Ashall 43 Wordsearch 50 Confessions of a payroll manager Additional online content 44 What makes an employer-provided benefit ‘qualified’ (in the USA) 45 Employees accessing their pension early
06 My CIPP
0121 712 1063 cipp.org.uk @CIPP_UK
Policy hub: On your behalf, Advisory
10 Beingpayroll 11 Movers and shakers 12 Personal development Diary of a student 15 COVID-19 news 16 Compliance
Articles Please support this magazine so that it can continue to be a part of your membership package. Trademarks The CIPP logo, the initials ‘CIPP’ and the words ‘Professional in Payroll, Pensions and Reward’ and ‘CIPP Consult’ are trademarks of the Chartered Institute of Payroll Professionals. Copyright: The Chartered Institute of Payroll Professionals 2020. The Chartered Institute of Payroll Professionals, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 Copyright This magazine is published by The Chartered Institute of Payroll Professionals in whom the copyright is vested. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. The views expressed in this publication are not necessarily those of the CIPP or the editor. The information and comment contained in this publication are given in good faith, their accuracy or completeness cannot be guaranteed.
Full issue including additional online content available at payrollpensionsandreward.org.uk
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| Professional in Payroll, Pensions and Reward |
Issue 66 | December 2020 - January 2021
CIPP update
CIPP celebrates 40 years of supporting payroll professionals AS THE Chartered Institute moves through its 40th anniversary year, we continue to review our history. We have spoken with industry luminary Alan Wigley MSc FCIPP, who has provided the following comments.
and the USA. I believe it was the Institute that turned payroll into a true profession especially with links to the likes of HM Revenue & Customs.” What was your proudest moment working for the Institute? – “Being elected CIPP chair, which coincided with Gordon Creswell FCIPP being elected to the board.
What was your role within the Institute and across which dates? – “After successfully completing the Diploma in Payroll Management I became a tutor and received lots of backing from Institute staff and fellow tutors. Seeing my first students graduate after two years was a proud moment for me. “I was invited to write the first fast-track diploma course whilst delivering this to students in Manchester. With the assistance of Lawrence Worrall (deceased) this proved successful and was launched in other parts of the country. “One of my students, who worked for me, took over my tutor role so I could concentrate for the MSc in Payroll Management. In 2001, after successfully completing my MSc and being named ‘UK Payroll Manager of the Year’, I was invited to join the board of CIPP. I stayed for six years, the last two as chair, before standing down due to a job opportunity that took me to Spain for a few years.” What was your motivation for being involved with the Institute? – “I started working in payroll in 1975 as a wages clerk for a heavy engineering company. At that time, wages and salaries clerks (note, not ‘payroll staff’) were not seen as being of much value to many organisations and were the lowest grade for office- based staff in most company structures. It certainly was not seen as a career. “After four years I went to work within the local authority, where the payroll function was still seen as a lower graded role. When, in 1980, the Association of Payroll and Superannuation Administrators (APSA) was launched, linked with our trade union NALGO (National Association of Local Government Officers), I felt that being a member of a professional body would help raise my profile in payroll. I was also able to use the letters ‘MAPSA’ after my name. This certainly helped, as in the mid-1980s I progressed through the organisation from wages clerk to payroll manager. “When the British Payroll Managers Association was formed I thought it was another opportunity to raise my profile, so as soon as the Diploma was launched I signed up immediately. “All these moves motivated me in my career that now spans 45 years in payroll. I have had the honour of representing the CIPP not just in the UK but in Canada, India, Ireland, South Africa,
Gordon has been instrumental in the development of the Institute, and someone I greatly admire. It was also the 25th anniversary of the formation of APSA. It was great to see the likes of Graham Francis FCIPP, Peter Blackhurst FCIPP, Lawrence Worrall, and other APSA founders in attendance. As a member of APSA I was the first to become CIPP chair.” What do you think has been the biggest change for the profession over the last forty years? – “I’m sure nearly everyone working in payroll is screaming ‘furloughing and the events that are happening today’, but due to a major operation I’ve missed all the stress and hard work payroll professionals have endured this year. I did, however, recognise the value payroll was providing to employees, employers, and the government in ensuring all payments were made accurately and on time.” “Which leaves me to talk about the introduction of statutory sick pay in 1983 when employers became responsible for paying it for the first eight weeks of illness. Payroll software providers struggled to provide automated calculations, especially when there was occupational sick pay to consider, so it became a manual process. As we had a weekly payroll in excess of 20,000 employees with high sickness levels it became an absolute nightmare to administer. (I think it still is for some organisations.) This was later followed by other statutory payments to the ones we have today.” What would you like to see the CIPP achieve in the future? – “I would like the CIPP to continue raising our profile especially with our government and business leaders. I would like one day to hear our prime minister acknowledge how valuable the profession is to all and sundry. Not just when we have the challenges we face today, but those we constantly face every week. Hopefully, this will get our profession and the commitment of all payrollers recognition of the hoops we jump through to support our colleagues and our country constantly, meaning we are not taken for granted.”
Festive season office closure THE CIPP office will close on 18 December, but the Advisory service will remain open until 22 December. The office and all services reopen on 4 January 2021.
Have a happy Christmas, and we sincerely hope you get the chance to relax and reflect on what we have all achieved this year. See you in 2021!
| Professional in Payroll, Pensions and Reward | December 2020 - January 2021 | Issue 66 4
Congratulations to the newly accredited PAS organisations THE CIPP’s Payroll Assurance Scheme (PAS) is designed to test your payroll processes in relation to payroll processing, compliance and the people skills and development opportunities. One of the most important elements is ensuring business
Ken Pullar, CIPP chief executive officer, said: “Never has it been more important for businesses to have good payroll processes, knowledge and skills that enable them to implement new government legislation and guidance quickly. “Congratulations to those organisations that have recently demonstrated just that.” The Payroll Assurance Scheme is still operating, with assessments currently operating virtually. To find out how the Payroll Assurance Scheme can benefit your organisation, email compliance@cipp.org.uk.
continuity plans are in place and effective should they be required. Given recent events, congratulations to all organisations that have achieved this accreditation and will have been able to put those plans into action. Special congratulations to our recently accredited organisations:
● Frontier Software PLC ● IRIS FMP (Cascade) ● LKQ Euro Car Parts Ltd
Market insight survey IT’S YOUR time to have your say on the services the CIPP provide, as we launch our market insight survey. Set some time aside, grab a cup of tea and tell us your thoughts. Your reply to this survey helps us shape the future of the CIPP, ensuring we understand your needs and support them the best way we possibly can. Check your inbox for the survey and make sure you do not miss this opportunity to have your say.
The CIPP Annual Excellence Awards 2020
THE CIPP’S Annual Excellence Awards are the industry’s most prestigious awards for individuals and organisations who have had a positive impact on the payroll, pension and reward professions over the last twelve months. The 2020 Awards took place online for the first time ever, on 15 October. The CIPP was overwhelmed by the number of nominees, especially considering how busy CIPP members and payroll professionals have been over the last twelve months. Ken Pullar FCIPP, CIPP chief executive officer, commented: “The nominations we have received show true professionalism and excellence within the sector in what can only be described as one of our most challenging years.” The CIPP extends thanks to the sponsors and to the judges.
Newcomer/Apprentice of the year Sponsored by ADP Chloe Hesketh ACIPP, Civica UK Limited
My biggest influencer award Sponsored by Workday Maria Mason MCIPPdip, BDO UK Software product of the year Sponsored by Cloudpay Zellis UK Limited, ResourceLink
Manager of the year Sponsored by Cintra HR & Payroll Services Dianne Hoodless MSc ChFCIPP FHEA, Hyperion Services Limited
International payroll service provider of the year Sponsored by Portfolio Payroll ADP
In-house payroll team of the year Sponsored by iRealise Vertas Group Limited
Payroll service provider of the year Sponsored by OneSource Virtual Cintra HR & Payroll Services Ltd
Project of the year Sponsored by The Payroll Centre Legal and General, OCE payments work stream Well-being and employee engagement award Sponsored by Intelligo University of Lincoln
Special award in recognition of services to payroll HMRC
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| Professional in Payroll, Pensions and Reward |
Issue 66 | December 2020 - January 2021
MY CIPP
On your behalf
Policy team update
The CIPP’s policy and research teamprovide an update on developments
P ayroll professionals have been exceptionally busy this month, and similarly the CIPP policy and research team have been challenged by the ever-evolving government measures implemented to help businesses and workers through the economic turbulence created by coronavirus. Whilst these initiatives are to be applauded, as they are designed to help retain links to employment, the pace at which new policies have been amended has been difficult to keep up with, to say the least. Extended coronavirus job retention scheme Eagerly – and, we admit, impatiently – we awaited guidance on the job support scheme (JSS), and its two variations (‘open’ and ‘closed’) ahead of introduction from 1 November 2020. Though guidance was finally released on 30 October 2020, it was promptly withdrawn following the announcement the next day by prime minister, Boris Johnson, which confirmed that the coronavirus job retention scheme (CJRS) would be extended to run for the month of November. This announcement was made only a day before the new measure was to be introduced, giving businesses and payroll teams alike severely limited time to respond and adapt
to the changes. Following this, Rishi Sunak, chancellor of the exchequer, spoke in Parliament on 5 November 2020 to confirm that the CJRS would actually be extended until the end of March 2021. This means that the JSS will be postponed, and also that the job retention bonus (JRB), due to be paid out in February 2021, will no longer follow the same timescales, and a retention incentive will be deployed at a different, more appropriate, time. Once again, payroll professionals are having to deal with substantial changes within very stringent deadlines, so it is important that they are recognised and appreciated, during what will be an extremely busy – and, arguably, stressful – time. From a policy perspective, it has been difficult to keep track of the flurry of changes, but the team has endeavoured to keep members up to date with all of the news that will affect their day-to-day work. Policy and research updates As a reminder, the policy and research team publish updates through News Online which is delivered to members’ email inboxes the next day. If preferred, weekly news emails can be requested by amending your details in the member section of the CIPP website www.cipp. org.uk/my-cipp.html . News is also
cascaded through social media platforms such as LinkedIn, Twitter and Facebook. The team also produce factsheets and FAQs, also available through the Policy Hub, and record a monthly webcast which provides an overview of a given subject. As you may imagine, coronavirus measures have dominated the webcast subjects this year, but are by no means the only subjects covered. Employer NICs holiday for employment of veterans HM Revenue & Customs (HMRC) recently published a consultation – Supporting veterans' transition to civilian life through employment (http://ow.ly/NVKr30riOO8) – which ran from July until October 2020. This exercise explored some of the intricate details of the new entitlement to a secondary class 1 National Insurance contributions (NICs) holiday for a twelve- month period being introduced from 6 April 2021 for employers of veterans. Although the consultation placed a lot of emphasis on certain definitions, including what the definition of a ‘veteran’ should be, and what the definition of ‘civilian employment’ should include, from the results of a survey and a virtual thinktank meeting that the policy team held it became apparent that payroll professionals were not particularly interested in these elements of the consultation. They were, however, concerned by the government’s proposals for administering the initial year of the relief. The intention is that employers will pay secondary class 1 NICs on the pay of the veterans for tax year 2021/22 and will then claim a credit for the amount in question via real time information (RTI) –
...payroll professionals are having to deal with substantial changes within very stringent deadlines, so it is important that they are recognised and appreciated...
| Professional in Payroll, Pensions and Reward | December 2020 - January 2021 | Issue 66 6
O N L I N E L E A R N I N G
Policy hub
FOUNDATION DEGREE ACCESS COURSE
...would have created a considerable administrative burden for those working within payroll departments and dealing with sickness.
This course is a bridge to year two of the CIPP Foundation Degrees in either payroll and
specifically, the full payment submission (FPS) – from the start of the following tax year (2022/23). From this point onwards, a real- time solution will be offered, meaning that the employer does not pay secondary class 1 NICs on the pay of qualifying veterans. Payroll professionals indicated that they did not favour this approach and asked why an existing NICs category (table letter) couldn’t be utilised, such as ‘M’ which is used for employees under the age of 21. This letter means that no employer NICs liability is attached to the employee’s earnings up to the upper earnings limit at which point the employer begins to pay secondary class 1 NICs at the rate of 13.8%. Another suggestion was that a new NICs category/letter be established for the relief to be added to the payroll records of eligible veterans. The concerns were that this seems unnecessarily complex and poses an administrative burden on payroll departments. In addition, the fact that employers would have to wait to benefit from the employer NICs savings may deter them from using the entitlement in the first place. The CIPP’s policy team submitted a formal response to the consultation, which can be located in the Policy Hub area on the CIPP website: https://bit.ly/38qOjNO. SSP1 form Towards the latter end of 2019, the SSP1 form available online was amended (http://ow.ly/TklE30riORA). This indicated that a SSP1 form would need to be completed every time an employee had a period of sickness that amounted to less than four consecutive days. This was a new requirement which would have created a considerable administrative burden for those working within payroll departments and dealing with sickness. The option provided was: “You have been off sick from work for less than 4 days”. Similarly, several scenarios in which a SSP1 form would ordinarily be issued had been removed. The CIPP and other stakeholders
approached both HMRC and the Department for Work and Pensions on the matter, and raised this issue at the Statutory Payments consultation group on which the CIPP sits, to advise that this form could potentially create extensive administrative burden and confusion for both employers and employees. The feedback was acknowledged and taken on board: the amended form was removed and the original restored. At the time of writing, however, only the version that needs to be printed off and completed by hand has been changed (http://ow.ly/pczt30riOTO). The electronic version that is completed on screen and then printed has not been amended (http://ow.ly/YJ4Z30riOUW). This issue has been raised with the relevant departments, and it has been confirmed that both forms will be aligned, and that the on-screen version of the form will be changed in due course. Payroll professionals may use whichever form is appropriate to the scenario they are dealing with. They are reminded, however, that there is no requirement to complete a SSP1 form for periods of absence that are less than four consecutive days in duration. And, finally… Member feedback plays a significant part in ensuring that the policy and research team accurately reflect views of the payroll profession which includes both members and also, by virtue of the CIPP’s Chartered status, the wider profession. We gather views through surveys and through Think Tank roundtables, which normally would be held face-to-face but due to the exceptional circumstances this year have been held virtually, using Teams. This move has been successful, and we would just like to take the opportunity to say thank you to all members who have taken part. Your views count, and they go a long way in affecting the direction of travel of government policy. n
pensions, and specifically designed for those who have the experience, and would now like a formal qualification We have developed this online course to provide those who have completed one of our level three certifications, or who have two years experience and are confident with manual calculations.
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Call: 0121 712 1023 Live chat with us
Wishing you all, a very happy and healthy 2021.
cipp.org.uk @CIPP_UK
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| Professional in Payroll, Pensions and Reward |
Issue 66 | December 2020 - January 2021
MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q: As it was my understanding that the March 2020 pension contributions were for tax year 2019/20, I made payment of them to the pension scheme before 6 April 2020. I was not aware, however, that the actual pension contributions for our company were to be paid to the defined contribution pension scheme around 15th of the following month (i.e. in April). Therefore, thirteen payments have been made to the pension scheme for tax year 2019/20. Can you please advise if it is correct to make pension contributions for March before the start of the new tax year and what effect if any there might be for members? A: When making contributions to a pension scheme, employers and pension scheme administrators should be aware of the annual allowance and the due date for making contributions. The annual allowance is the limit for tax relief purposes for: (a) the total amount of contributions that can be paid to a defined contribution pension scheme; or (b) the total amount of benefits that a member can build up in a defined benefit pension scheme. The annual allowance is currently £40,000 although a lower limit of £4,000 may apply to those who have already started accessing their pension. The annual allowance is not a ‘per scheme’ limit. (See guidance on the Pensions Advisory Service site: https://bit.ly/3lqJKXz.) The rule is that member contributions to defined contribution pension schemes must be paid by 19th of the month following the month in which they were collected from pay (or by 22nd if contributions are paid electronically). These dates do not override any earlier due date specified in the payment schedule. Employer contributions must be paid by
the due date in the payment schedule. Although March contributions might be scheduled for payment to the scheme by 19 (or 22) April, this does not preclude the possibility of making payment earlier (e.g. before 6 April). Though it would seem that thirteen monthly payments of contributions have been made in tax year 2019/20, thereby raising the possibility that the extra contributions might have pushed an individual’s pension savings over the annual allowance, this may not be the case as the tax charge arises on excess savings in the individual’s pension input period. You should discuss the issues with the scheme administrator. Q: I have a request to deduct lease contributions for car hire from an employee’s earnings. Can you advise if this deduction is from net or gross pay? A: Any lease costs would be deducted from the individual’s net pay. For more information see section 114(A) of the Income Tax (Earnings and Pensions) Act 2003. If your employees have lease agreements, company car benefit taxation rules will apply, and the provision of the car must be reported in the P11D return. Any contribution made by the employee is then reported as an amount made good in the return. Q: We have implemented a new system whereby employees can have the facility of accessing early pay for pay already earned. Could this affect staff members who are on universal credit? A: The term used to describe a payment does not decide its treatment, as it is necessary to look at the substance of
the matter. Something described as an ‘advance’ may actually be a ‘loan’ or a ‘payment on account of earnings’. Section EIM42280 (https://bit. ly/2GCFkh0) of HM Revenue & Customs’ (HMRC’s) Employment Income Manual , addresses the issues. If an employee and employer make an agreement under which the employer lends money that the employee agrees to repay at a future date or dates, the amount is a loan not a payment on account of earnings. A system allowing employees to draw an advance of salary is a loan repaid out of a future salary. PAYE (pay as you earn) is applied when the salary is paid – not when the advance is. In the noteworthy case Williams v Todd, which involved an interest-free advance to an Inspector of Taxes, Justice Walton said “I do not consider that the advance can be truly called anything other than a loan”, noting there was “an express term of the advance that it is repayable on demand” and adding “the advance does not fall within the scope of income to be assessed under the PAYE system.” For purposes of universal credit, the Department for Work and Pensions receives claimants’ earnings information from HMRC that had been supplied in employers’ full payment submission (FPS) returns. Thus, if the advance is a ‘loan’ and not a ‘payment on account of earnings’, the employer would not make a FPS to report the amount advanced, as the earnings would be included in the FPS return when the employee was paid for the pay period in question. Q: How would you deal with overpayments made in a previous tax year and those in a current tax year?
| Professional in Payroll, Pensions and Reward | December 2020 - January 2021 | Issue 66 8
Policy hub
NEWTO PAYROLL?
A: Looking at overpayments from the point of view of PAYE and National Insurance contributions (NICs), the court case British Railways Board v Franklin provides guidance (see HMRC’s Employment Income Manual at section EIM00815 (https://bit.ly/38fk38j)). Where the employer can only recover the net overpayment, the guidance at paragraph 1.19 of the CWG2 ( Employer further guide to PAYE and National Insurance contributions ) (https:// bit.ly/2JIRSEH), says that for current tax year overpayments of salary the employer has to correct the figures so that the payment to the HMRC would be adjusted in the following tax month. For closed tax years, the employer is expected to correct the figures and to write to HMRC to recover the tax and NICs rather than the employee requesting a refund. Previously correcting the figures was done via an earlier year update (EYU) but from April 2020 the EYU ceased to be a valid submission. For future years employers will need to use the extended FPS to revise year to date payment data after 19 April. Q: Does a deduction for an overpayment affect the national minimum wage? A: There is no statutory limit on how much can be deducted from an employee for an overpayment made by mistake. Guidance for calculating the minimum wage – National minimum wage and national living wage (http:// bit.ly/34xzzqB) – published by the Department for Business, Energy and Industrial Strategy, lists the excepted deductions from pay (and payments by workers) that do not reduce minimum wage pay. This list includes “deduction from pay or payment by the worker to recover an accidental overpayment of wages” (https://bit.ly/3eAuzZc). Q: We have an employee who has been receiving a net payment instead of a deduction for several years resulting in an overpayment. If the employee does not pay back the money, would this have to be processed as a benefit in kind? A: If you can arrange repayment (ideally over a period no longer than the period
that the overpayment occurred), this will result in status quo and HMRC will not need to be involved. If you are unable to recover the funds from the employee, you would not be able to report it as a benefit as cash cannot be classed as a benefit. Cash payments should always be subject to PAYE income tax and class 1 NICs. In this instance you would need to write to HMRC and explain that the employee has received income that was not subject to income tax or class 1 NICs so that it can raise a demand against the employee and the employer for unpaid taxes. HMRC may well choose to assert that the employer is liable fully for tax and NICs. Q: Our company wants to enable all employees to have a flu vaccination by either claiming through the employer-provided Medicash healthcare benefit, which we report as a P11D item, or if the employee did not opt for this cover and has no Medicash benefit, reimbursing for the cost incurred (average £13). What is the taxation position? A: Section 323A of the Income Tax (Earnings and Pensions) Act 2003 sets out a statutory exemption for trivial benefits. Under this exemption, if an employer provides a benefit to its employees, the benefit is exempt from being taxed as employment income if all the following conditions are satisfied: ● the cost of providing the benefit does not exceed £50 (or the average cost per employee if a benefit is provided to a group of employees and it is impracticable to work out the exact cost per person) ● the benefit is not cash or a cash voucher ● the employee is not entitled to the benefit as part of any contractual obligation, and
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● the benefit is not provided in recognition of particular services
For more information or to book: Visit: www.cipp.org.uk Email enquiries@cipp.org.uk
performed by the employee as part of their employment duties (or in anticipation of such services). If the vaccination meets all the above, no reporting is required. Note that if you are reimbursing employees for their flu vaccine, this does not fall within the trivial benefit exemption as it fails the ‘not cash’ condition. n
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cipp.org.uk @CIPP_UK
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| Professional in Payroll, Pensions and Reward |
Issue 66 | December 2020 - January 2021
Being payroll
Tristan Day ACIPP, general manager, Infinet Cloud Solutions, discusses the benefits of being part of the CIPP
What attracted you to membership of the CIPP? I was attracted to CIPP membership because I took on a new role working for a payroll software company and we needed to ensure that I understood all the minor details of payroll calculations, and to give confidence to our customers that we were doing everything we could to understand it all. Which benefits in the CIPP membership package appeal to you the most? The benefit that appeals the most is the ability to speak to the CIPP Advisory Service when we have specific scenarios. Particularly low use case scenarios, where we want to make sure that we are running that passed as many people as we possibly can, and the Advisory Service is very helpful in pointing us in the right direction. How has CIPP membership helped you in your career? CIPP membership has helped my career because it does give confidence that we know what we are talking about. When we’re doing payroll, it is not just the company that we need to look after; we need to make sure that their employees are getting paid accurately and efficiently and on time. The CIPP helps us do that. Tell us about a time when you really felt the benefits of having CIPP membership We realised the benefit of CIPP membership when the General Data Protection Regulation was rolled out. There were obviously particular concerns around data privacy and payroll information and how that needs to be transmitted, both to ourselves as software providers, but also within a business as well. Tell us about the day you realised CIPP membership was really of value to you I really noticed the value of my CIPP membership when I was talking to a family member and we were looking at their payslips, having first understood all the rules and regulations around it. When we looked at it, we realised they had paid about £2,000 too much in student loan deductions, which they were able to go and reclaim.
For someone who was thinking about joining the CIPP, what would you advice be to them about the benefits they might receive? If someone is looking to join the CIPP, I would recommend that they do look at it as a career progression path. It does make people more employable and it also gives those around you confidence that you know what you’re talking about. Why is being a CIPP member important to you? CIPP membership is important to me personally because it helps me maintain my knowledge and my understanding. But more importantly for us as a business. We are a payroll software provider, and at the end of the day if we can’t speak to our peers and customers with knowledge and confidence then, really, we’ve got no right being in the industry. And being part a professional organisation like the CIPP is key.
If you would like to be part of the being payroll series, please email info@cipp.org.uk
BE ACCURATE. BE EFFICIENT. BE COMPLIANT. BE CONSISTENT. BE PAYROLL
| Professional in Payroll, Pensions and Reward | December 2020 - January 2021 | Issue 66 10
To appear on this page contact editor@cipp.org.uk
John Robert (Bob) Newsome 26 APRIL 1951–19 OCTOBER 2020 BOB BEGAN his career working for Peterborough Software as a systems engineer, joining MidlandHR in 2010 where his roles included ‘Government relations manager’. He retired in 2018. Neil Tonks ChMCIPPdip has supplied the following. “I knew Bob for the last ten years or so of his career, first meeting him during the consultations with HMRC about real time information. He was so valuable to the process of designing RTI that he was seconded part-time to HMRC for a number of months. “Later, Bob joined MHR and we became colleagues. He quickly became a favourite both amongst the customers and the staff for his exhaustive knowledge and his knack of getting his message across clearly and concisely. He always had an anecdote or a (terrible!) joke ready to lighten the mood or break the ice as occasion demanded. “Above all, Bob was a kind, gentle man who will be sadly missed.” NICK SOUTHWELL APPOINTED BY ACTIVPAYROLL GLOBAL PAYROLL and tax compliance specialist, activpayroll, has appointed Nick Southwell as chief financial officer. He will be responsible for helping shape the strategic and continued international growth, capitalising on the ever- increasing demand for activpayroll’s payroll and tax solutions. Nick Southwell said: “I’m certain that my varied experience built over the years will allow me to further strengthen not only activpayroll’s finance team, but the business as a whole, helping it achieve its potential.” Alison Sellar OBE, chief executive officer of activpayroll, commented: “Nick’s appointment comes at a pivotal time and I am confident he will play an integral role as we enter the next stage of our global growth strategy.” PORTFOLIOGROUP PROMOTESGILLIANOWEN THE PORTFOLIO Group has promoted Gillian Owen to associate director. Joining the organisation in 2018 as manager, she has built on Portfolio’s market-leading reputation. Her initial team of just two recruiting solely for payroll has grown to eight consultants working across three divisions (payroll, HR/reward, credit control), and almost doubling sales figures within the first full financial year. Gillian commented: “I am delighted to have been promoted. I have been so lucky to be a part of a team that’s been instrumental in the development of the Manchester office, built from the market reputation…and also proud of the fantastic, diligent and professional service we offer to all our clients.” IAN HOLLOWAY MSc FCIPP JOINS I-REALISE LTD IAN HAS joined i-Realise, an independent change management business operating in the HR, payroll and operations space, as payroll consultant. His role will include: publishing insights on payroll legislation and best practice through workshops, white papers, newsletters, and face-to-face presentations; leading i-Realise’s monthly forum for in-house payroll leaders and managers; and contributing to payroll training. Ian said: “Payroll is an ever-changing profession that requires clear and tailored communication, support and education. As an independent change management business, i-Realise have developed and delivered clear and robust strategies that enable this, and I am thrilled to be joining their colleagues in 2020.” Simon Puryer, managing director of i-Realise, said “We’ve worked with HR and payroll teams for over ten years [and] seen how much Ian has given to the profession. He will really help us better inform and support our clients and the wider payroll profession.” SOLONG, FAREWELL – ANDTHANKYOU WE END 2020 with the news that Samantha Mann MAAT MCIPPdip, policy and research technical lead, will be leaving the Chartered Institute at the end of December in order to spend more time with her growing family. We thank Sam for her dedication, support, and enthusiasm over many years of service which will be sorely missed – not only by those within the CIPP but by those in the wider payroll industry for whom her knowledge has had a huge impact. We wish Sam the best for the future. NEW ROLE FOR CARSTEN STAEHR FCIPP LONG-TIME ADVOCATE of the payroll profession, Carsten has become chairman of Cintra HR & Payroll Services, following Cintra’s recent accession to the Payroll Software Services Group which enables Cintra to develop and grow its market leading solutions. Carsten’s new role will see him focus on developing Cintra’s prestigious client base, whilst continuing to forge valued industry connections and partnerships. Carsten commented: “I’m excited by the innovation and forward-thinking attitude of the PSSG and its genuine desire to develop solutions which make life better for the profession I hold dear. I’m delighted to be at the forefront of building networks which will enable us to be more effective and helpful than ever – these are exciting times for me personally, my Cintra family and our wonderful clients. I am looking forward to the future”.
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| Professional in Payroll, Pensions and Reward |
Issue 66 | December 2020 - January 2021
PERSONAL DEVELOPMENT
Mental health support
Harriet Calver, senior associate in the employment teamat Winckworth Sherwood , explains that such support is now an essential business concern
M ental ill-health is now more the most common cause of long-term absence in UK workplaces and accounted for more than half the working days lost each year. Whilst we cannot quantify at this stage the true impact of the pandemic on the mental health of employees, early indications show that the pandemic, and the associated measures taken by the government to control it, have had a severe and negative impact on overall well-being. Such a prevalence of mental ill-health prevalent than ever. Even before the Covid-19 pandemic it was is a major concern to employers, not only from an employee welfare perspective, but because mental health is integral to how employees feel about their jobs and how they perform. Poor mental health leads to increased absenteeism and staff turnover, reduced engagement and productivity – all of which is very difficult to manage at a time when many businesses are already dealing with the fallout from the pandemic and some are facing serious financial hardship. Many employers are justifiably concerned about the negative impact that enforced working from home all or most of the time is having on employee well-being. Of course, for many employees working from home may be a positive thing and enhance their well-being and work-life balance, but for a large number of employees it has led to isolation, working
longer or more irregular hours and an inability to switch off due to the lack of separation between work and home and the pervasive use of technology. It is also harder for employers to spot the signs of poor mental health when employees are working from home. A recent survey by Vitality shows that young employees are particularly at risk from mental health issues, with 12.5% of those in the 21–25-years-of-age category indicating that they suffer from depression. Concerns and stress over job security and personal finances in the current climate are also taking a toll, especially for those at the start of their career, many of whom feel unable to take time off from work even when sick. There is evidently a need, now more than ever, for employers to put in place support systems for their employees who are experiencing poor mental health and, perhaps just as important, to implement measures to help prevent a decline in their employees’ mental health, boost workforce morale and ensure that any issues are caught at an early stage. Many employers have already increased their mental health support offering as a result of the pandemic. The range of mental health support on offer varies and examples we have seen include virtual well-being sessions, such as online yoga or mindfulness classes, encouraging employees to have thirty-minute virtual coffees with their colleagues, holding
lunch clubs and virtual social events, such as quizzes, to increase employee engagement. More direct methods we have witnessed include the introduction of mental health first-aiders or mental health champions who employees can approach confidentially to discuss any mental health problem or concern. Line managers have also been provided with training so that they can more easily spot the signs of mental ill-health and learn how to handle sensitive conversations around this issue. The aim of these initiatives is to promote a culture where it is acceptable to talk about and seek support for poor mental health. In the long-term, as remote working appears to be here to stay, employers have begun putting systems in place, such as risk assessments and a mental well-being at work policy. By monitoring working hours more closely, employers can assist their employees to regain a healthy work- life balance and avoid ‘presenteeism’. There is no doubt that mental ill-health is now an essential business concern and employers need to go much further than ever before to implement ways to counteract this and prioritise well-being. In our experience, an open dialogue and good communication between employees and their managers and colleagues is key to ensuring employees feel supported and that they can ask for help. Simply relying on written policies and/or paying lip service to the concept of positive mental health in the workplace will not be enough. Managers need to lead by example and champion mental health initiatives in order to break down stigma, gain traction across the organisation and to build a culture where employees feel comfortable to share their feelings and concerns. n
...monitoring working hours more closely, employers can assist their employees to regain a healthy work-life balance...
| Professional in Payroll, Pensions and Reward | December 2020 - January 2021 | Issue 66 12
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