Payroll insight
with HM Revenue & Customs’ (HMRC’s) systems to gather earnings data of claimants. Where data is found that falls within the claimant’s assessment period it is used to assess whether a UC payment should be made in full, be adjusted, or cease if the amount exceeds the UC earnings threshold. The risk of this happening increases where the employer uses the incorrect payment date in the FPS, but this ‘double bubble’ occurrence will happen routinely throughout the year where an employee’s pay period is two-weekly or four-weekly. The impact this has on UC claimants is significant as it threatens the working tax credit element and the housing benefit element. In the case R (on the application of Johnson and others) v Secretary of state for work and pensions (http://bit. ly/32s2XNY) the interpretation of the regulations by DWP was ruled to be wrong. Where a double payment appears in the same claim period but relates to two separate assessment months it is within the gift of DWP to make an adjustment. Employee financial awareness The Low Income Tax Reform Group (LITRG) has written extensively on this subject and provide excellent information (http://bit.ly/34CQfNR) and signposting that can provide help to claimants who find themselves affected. Not all employees claim UC, but the excitement of Christmas can leave many counting the days until the January pay day arrives. Employers can help their employees in several ways that include: ● providing advice and support to educate employees on budgeting and financial management ● not paying any earlier than the non- banking days enforce – thus minimising the weeks between December and January pay days ● considering requests for advances to reduce the risk of employees giving in to temptation and obtaining ‘pay day loans’ that are advertised daily across our TVnetworks. At the time of writing, another advert is being run with the motto ‘pay day = save day’ and I am sure this has resulted in many employers turning to their payroll teams to ask “what can we do to encourage our employees to save?”
We welcomed 2019 with shocking headlines (first reported in The Times ) that the retailer Iceland planned to fight HMRC over their accusation of an alleged underpayment of national minimum wage (NMW) of £21,000,000 which came about largely due to Iceland’s operation of a voluntary employee saving scheme. Described as “just madness” by Iceland’s chief executive officer this headline highlighted the importance of obtaining accurate advice before entering into a similar scheme. ...providing advice and support to educate employees Debate and concern continue on this and many other areas of uncertainty surrounding HMRC NMW findings, but we’ll leave that increasingly uncertain subject for another day. Festive quick polls Our quick polls are run throughout the year to gather indicators of views at the time. Our Christmas polls are a little more ‘tongue in cheek’ to recognise the festive air that permeates December. In the run up to Christmas 2018, the CIPP policy team ran a series of polls in a bid to build a picture of employer Christmas traditions (and attitudes) together with employee expectations of their employer’s festive generosity. The 2018 results were interesting and provided an opportunity to compare how we may sit alongside our peers. (Thank you to everyone who responded.) Here are the results. “God bless us, every one!” The results of our 2018 poll provide me with a shameless opportunity to quote Tiny Tim, taken from my favourite Christmas story – A Christmas carol . Whilst the image and views of a miserly Ebenezer Scrooge may spring to mind, I prefer to close with the image of the reformed employer who welcomed Christmas day with the words “I’ll raise your salary, and endeavour to assist your struggling family.” on budgeting and financial management...
We can’t all have employers who welcome Christmas day in the same way… but we can but hope. n Are the tax andNIC costs of your seasonal reward scheme a factor in your decision
making? Yes – 22% No – 15%
No, but we recognise it should be – 5% Not applicable, we don’t provide – 58%
Does your employer cover the full cost of the staffChristmas party? Yes, in full – 49%
No, cover part – 18% No, pay nothing – 33%
What do you use your Christmas gift to dowithin your workplace? To say thank you – 41% To inspire – 2% To engage – 5% Nothing, it is just expected – 7% Not applicable, we don’t provide – 45% Howwill your employer process the value of your seasonal gift? PAYE settlement agreement – 18% Will fall within trivial benefit rules – 29% P11D reporting – 5% Payrolling – 8% Not applicable – 40% What personality type is your employer at Christmas time? Ebenezer Scrooge – 33% Bob Cratchit – 5% Father Christmas – 31% Naughty Elf – 5% The Snowman – 8% The Grinch – 18% What will you be expecting fromyour employer this Christmas? Non-cash voucher – 4% Turkey – 1% Chocolates/biscuits – 4% Hamper (food and/or drink) – 5% Cash bonus/voucher – 4% Annual party/other experience – 35% Unlimited generosity (budget allowing) – 1% Nothing (bah humbug) – 46%
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| Professional in Payroll, Pensions and Reward |
Issue 56 | December 2019 - January 2020
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