MEMBERSHIP INSIGHT
2, as the rule is to default to Plan 1 in this situation.
Q: We are planning on registering to payroll benefits in kind for the first time ready for April 2020. The benefits we payroll attract class 1A NICs. Are these NICs collected via the payroll? A: Even though the tax is collected via the payroll, the class 1A NICs are not and you will still have to send a P11Db return following the end of the tax year. Your payroll system should be able to produce a report at the end of the tax year to give you a value for your class 1A NICs liability. Q: I have an employee who is due to go on to statutory maternity leave (SML) and has advised us that she has a secondary employment. She qualifies for statutory maternity pay (SMP) with us and also with the other employer. She has asked to curtail her maternity leave with us at week 20 to commence shared parental leave. If she was to do this, how would it affect her SMP with the second employer? A: For statutory shared parental leave and/ or pay (SShPL/SShPP) to be created, the mother must give both employers who are liable to give her SML/SMP notice at the same time. This means that the employee must curtail her SMP/SML in both employments. If the criteria are met in both employments for SShPL/SShPP the employee will be entitled to have two sets of SShPL/SShPP. In both circumstances, the parents have up to 52 weeks from the birth of the baby to take the SShPL/SShPP. Q: Our organisation has their automatic re-enrolment date happening in the next pay period. Several employees do not qualify for re-enrolment when assessing their earnings over a full year because their annual earnings are below the £10,000 earnings threshold. Should I look at the earnings on a monthly basis, or use and annual earnings figures for re-enrolment purposes? A: When assessing an employee for re- enrolment you should use the earnings in the pay period that includes the re- enrolment date. You do not average it out over a longer period, and you do not use the annual earnings over the year. If in the month of re-enrolment, they meet the criteria to be auto-enrolled then you must enrol the employee in a qualifying pension
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m. to 4.30p.m. on Fridays * . Call 0121 712 1099 , email advisory.service@cipp.org.uk or visit cipp.org.uk to live chat.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: We have an employee who relocated in 2018 and was given a hire car for the period February–August 2018. The car was reported via a P11D return, but I have now been advised by his line manager that this was part of his relocation package so should not have been reported to HM Revenue & Customs (HMRC). Can you please advise? A: The cost of a hire car, solely for the use of relocation, could be covered in the statutory £8,000 relocation exemption. However, you would need to be sure that the car is only used as detailed in HMRC’s guidance (http://bit.ly/2WQ1uQs). For the exemption to apply, the following must be met. “If the employee or a member of his or her family or household is not already provided with a car or van available for private use (see EIM23300) and a car or van is then provided solely for travel in respect of: ● eligible travel and subsistence for the employee (see EIM03113) ● eligible travel and subsistence for the employee’s family or household (see EIM03114) ● continuity of education for child (see EIM03115) the benefit charge arising from that provi- sion can be covered by the removals ex- emption if it is within the £8,000 limit. The same applies to the fuel benefit charge in such circumstances. Note that this rule is ‘all or nothing’. If the car or van is available for any private use other than eligible relocation travel in the tax year in which it is provided for the move the benefit charge(s) will apply
in full following the normal rules and no part can be treated as eligible removal benefits.” This would mean that a condition that the car is given must be that no private use is undertaken in the vehicle. It would be advisable that within the terms for the car being given, it is noted that private use is not permitted for the exemption to apply. If this isn’t monitored or can not be proven that it has been solely used inline with the conditions for exemption, you would need to report the full costs of providing the vehicle via a P11D return. Q: I would like some advice on salary sacrifice for buying annual leave and whether this is a taxable benefit in kind? A: HMRC have stated that allowing employees to purchase additional annual leave via a salary exchange/sacrifice is perceived as helping employees to maintain a good work/life balance and that there is nothing to report regarding salary sacrifice or optional remuneration arrangements. The purchasing of additional annual leave is classed as an intangible benefit in kind. Q: A new employee has indicated in their starter declaration that they have a student loan plan 1 and 2. Which plan should we operate, or do I apply both? A: It is possible that an employee could possibly have two types of student loan plans; however, you should process the deductions using the default student loan deduction thresholds as dictated under plan 1. You would not apply two separate deductions on the payroll for plans 1 and
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| Professional in Payroll, Pensions and Reward | December 2019 - January 2020 | Issue 56
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