Official publication of The Chartered Institute of Payroll Professionals PROFESSI NAL Issue 68 March 2021 in Payroll, Pensions & Reward
Peter Blackhurst FCIPP, founder member (Obituary, pages 4 and 5)
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Payroll’s objective is “to pay people accurately on time” Peter Blackhurst (1943–2021)
The tributes and memories on pages 4 and 5 reveal Peter Blackhurst as a
recommend the article on page 16 which reveals a wide range of opinions from industry luminaries surely reflecting their roles and experiences. For me, compliance in paying people accurately and on time remains fundamental. I would be delighted to receive your views.
charming, innovative and talented person who (along with those mentioned in the article) played a key formative role in putting in
place the underpinnings that supported the eventual emergence of the CIPP. What an extraordinary and wonderful life achievement! The above axiomatic quote, attributed to Peter, succinctly encapsulates the absolute essence of our profession. I imagine Peter would have avidly read this issue’s articles on the feature topic of the future skills of payroll professionals. I
Mike Nicholas MCIPP (editor@cipp.org.uk) Editor
Chair’s message
The very nature of work and staying connected with others is high on
and development. Interpretation of case law where it impacts payroll and pensions – and helping employers and employees understand the effects on their teams or departments – is also a way of taking account of changing legislation and adding value to the organisation. Adding value is something that I hope I have achieved as chair during my tenure. It has been fantastic to work with the board and the whole CIPP team, on developing governance, reviewing our education portfolio, representing the CIPP at numerous events, building the strategy for the future, and making key co-options to support that journey. Whilst critically also keeping an eye on the present. I look forward to supporting Liz Lay in the future and hope to see as many of you as possible when circumstances allow. Stay safe and keep well.
everyone’s agenda, but communication and stakeholder management is not just staying in touch and providing information. If you want to be seen as a key individual within the business and a valuable asset, knowing
what and when to share information that will help your peers and seniors is a key skill. This means looking ahead (horizon scanning), interpreting what is happening (predictive analysis) and drawing out key information and actions that can be acted upon. Mental health and well-being is a key focus for employers also, and payroll and pensions professionals can support further in the financial well-being element by ensuring the skills they have developed in terms of understanding workplace financial management and planning can be interpreted to benefit those you come into contact with. Is a copy of a payslip and a narrative for interpretation provided as part of a company induction pack for new employees (including apprentices, graduates etc)? This type of information may be very useful to receive as part of their learning
Jason Davenport MCIPP MIoD (jason.davenport3@cipp.org.uk) Chair, CIPP
CEO’s message
member benefit, namely: Payroll: need to know – your guide to UK payroll legislation and reporting for 2020-2021 (https://bit. ly/2NhwpEo). This contains all relevant UK payroll, pensions and general employment items, indexed and categorised for easy reference, in date order to ensure you have the latest updates on any given subject. The CIPP policy unit produce this detailed document for your benefit so please follow the link and avail yourself of this resource. I extend my personal thanks to Jason Davenport, who steps down as chair at the AGM on 31 March, for his support since January 2019. Jason’s passion and leadership skills have ably supported the CIPP, along with the excellent support of his board colleagues. While Jason remains on the board for a further year as ‘past chair’, Liz Lay commences her term as the new CIPP chair. I’m sure we all wish Liz well in this role. Please note the AGM is also the time to elect two new board members; so please ensure you use your vote – see www.cipp.org.uk/ my-cipp/annual-general-meeting .
In the twelve months since the pandemic struck, our profession has been recognised as ‘key workers’, and in the main all being done from home. ‘Payroll and pensions, you can’t do that from home’ has been the refrain over the years and yet overnight we did. I hope at the end of this month (year-end permitting!) as
we enter Easter you all get a chance for a well-deserved break. Going forward, who knows or can predict what the payroll and pension professional will look like; and whether the workplace will be a blend of office and home; we’ll see. As I mention year-end (and what last minute surprises might the March budget bring?), it’s appropriate that I remind you of valuable (online!) training courses to help tackle this key time of the year. Training courses – such as our revamped ‘P11Ds, expenses and benefits’ (https://bit.ly/3tHDD5v) and our ‘Off-payroll working (IR35)’ (http://bit. ly/3oepQiT) – are available now and continue to be very popular with our members. It’s also very timely to join our ‘Payroll update’ course (https://bit.ly/3p9rAuh) – a must-have for all industry professionals – with members receiving 50% off the full price. It’s also an appropriate time to remind you of an invaluable key
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 68 | March 2021
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at professionalmag.co.uk
Contents
March 2021
THIS ISSUE’S FEATURE TOPIC FUTURE SKILLS OF PAYROLL PROFESSIONALS
41
Transforming payroll
by Jaspal Randhawa Wayte
Features
16
18
25
Future skills of payroll professionals by Jerome Smail
Kickstart scheme developments by CIPP policy team
Starting your own business by Eira Hammond
26
28
30
Off-payroll working – changes imminent by John Harling
Imminent changes by Lora Murphy
Reporting benefits by Gemma Mullis
| Professional in Payroll, Pensions and Reward | March 2021 | Issue 68 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
Big and short lessons in engagement by Gareth Stears
Employers beware staff gaming the CMS by Henry Tapper
38
36
Liz Lay MSc FCIPPdip Carole Pearson MCIPP Katie Sharpe ACIPPdip
Redundancy situation, disability discrimination, termination date by Nicola Mullineux
Why payments should always be accurate by Danny Done
Cliff Vidgeon BA (Hons) FCIPP CMA ACIS Clare Warrington MSc FCIPPdip AFHEA
Useful contacts
41
44
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
Outstanding customer experience by Jeanette Hibbert
A transparent approach by Jeff Phipps
Regulars
01 Editor’s comment, and
32 Covid-19 news 34 Reward
Chair’s andCEO’smessage
07 CIPPupdate
Events, news and developments
40 Industry news 41 Technology 45 Wordsearch 50 Confessions of a payroll manager Additional online content 15 Ways toprioritiseyourwellbeing while working from home 24 Payroll needs to evolve, more
0121 712 1063 cipp.org.uk @CIPP_UK
08 My CIPP
Policy hub: On your behalf, Advisory; Spotlight on…
13 Movers and shakers 14 Personal development Diary of student, Starting your own business, BePayroll
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 2021. 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.
22 Payroll news 24 Compliance
Full issue including additional online content available at professionalmag.co.uk
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| Professional in Payroll, Pensions and Reward |
Issue 68 | March 2021
10 October 1943 – 16 January 2021 Peter Blackhurst FCIPP
It is withmuch sadness the Chartered Institute learned of the death of this highly respected and loved founder member who played key roles in creating our professional body. The following obituary was compiled by Gordon Cresswell FCIPP fromconversations with Trevor Lakin FCIPPdip, ChrisWilliams FCIPPdip, Peter White FCIPP, and BryanMonkman FCIPP. T he payroll profession was very saddened to learn of Peter’s passing, leaving a void in the early group of payroll pioneers. He had been fighting MDS, a rare house payroll system. He was successful, and it lasted for over fifteen years. I met Peter at the first meeting of what was to become the committee of APSA, the forerunner of today’s Institute.
form of blood cancer and sadly complications set in. As Chris Williams remarked, “Oddly I thought our inaugural group would go on forever”, a comment I understand because, although we’re not invincible, there was something about those early days in the eighties that made us feel we could change the world – we certainly rocked the payroll establishment and Peter was a large part of this. Peter White recalls first meeting Peter in 1968 when both Peter B and his wife Krys worked at Hertfordshire County Council. Says Peter: “We renewed our acquaintanceship in 1980 with the advent of APSA (Association of Payroll Administrators) when I joined a number of payroll and pensions people including Graham Francis, Gordon Cresswell and Peter who I recall as a confident young man, pushing ahead with his career and bringing fresh ideas to the table, forming part of the bedrock of our fledgling organisation.” Peter moved to Cheshire City Council then to Cheshire County Council where he employed Bryan Monkman in 1975 in the pensions department. Bryan remembers, “Peter adopted a quite radical stance to our reorganisation of the department, adopting a team structure, an alien concept to some of the diehards.” His boss, Lawrence Warrell, who died last year, moved Peter back into payroll with the challenge to design and develop a bespoke in- standing out charismatically with his charm and original ideas. Peter was never quiet, and you always knew when he was in the room
We had only broad ideas of what it would become – notions of representation for the payroll voice, a vague idea of a payroll qualification. There were about twenty of us, mostly strangers to each other, with Peter standing out charismatically with his charm and original ideas. Peter was never quiet, and you always knew when he was in the room! We became firm friends as the organisation progressed, often rooming together in London in interests of economy. Bryan recalls that Peter’s boss had allowed him to attend the first APSA meeting with the proviso of not taking on any roles. He returned the next day as APSA secretary! He was proud of his membership being number 2, second only to George Powell, the Liverpudlian who made the first rallying call for there to be a payroll body. The most important initiative we undertook as a body was to produce the first payroll qualification, a warts-and- all product but it worked. I remember Peter coining the phrase that payroll’s objective is “to pay people accurately on time”, something so obvious but it needed to be stated. Another major contribution he made towards the qualification was to measure efficiency through payroll indicators – old-hat now, but back in the 1980s quite radical. Peter was an ideas man. He believed everything we did in payroll could be laid out as a formula which meant, when adopted, that the payroll programs could be made to do so much more than they had in the past. It was during these exciting early days, as we all got to know each other, that I met Peter’s wife Krys, always supportive of his efforts and putting up with Peter going off with the rest of us for workshops and meetings. During the early days Trevor Lakin met Peter and he recalls “I was working at Peterborough Software and was introduced to Peter for the production of an article for our local government customers. We bonded over a splendid lunch (quite liquid!) with discussions on music and bands
| Professional in Payroll, Pensions and Reward | March 2021 | Issue 68 4
we had seen, eventually reconvening to produce the article – the beginning of a lifelong friendship.” APSA was an important body in payroll’s history but sadly there was a schism as the decision was taken not to admit non-public sector members, a move with which Peter and I vehemently disagreed as, to us, payroll was payroll with common issues throughout the profession. Trevor Lakin was refused membership of APSA because he worked in the private sector. “I was disappointed,” he said, “and I contacted Peter for advice on setting up a private sector payroll body which he agreed to on the condition that Gordon Cresswell also became part of the team.” an innovative payroll professional who lightened our lives with humour and
professionals to attend the first meeting in Coventry in 1985, my hand shot up; and his belief and encouragement made me want to be a part of this exciting new venture. I am sure that the same was true for many others. Peter convinced us, through his talk, that there was nowhere else to be if you were serious about taking payroll forward.” Recalling the early days, Chris says “I was lucky to be deputy chair under Peter, following his lead and I became chair after him. I appreciate many of you will not have heard of Peter Blackhurst , as he was only active in the formative years, but trust me he played a key part. We remained friends and I will miss his bubbly attitude a huge amount.” Although Peter was a natural front man, only those of us close to him were aware of the agony he went through prior to a presentation. He suffered stage fright and normally we would arrange for his slot to be the last one before lunch so that he didn’t have a ruined lunch as well as a spoilt breakfast! His concerns were unfounded because as soon as he hit the lectern he went into a superb presentation mode. As the BPMA grew into the Institute Peter took a quieter role and concentrated on his real day job until he took early retirement. He loved his golf and became the seniors captain for his local club. Holidays and Peter just went together so whenever we all met up his conversation revolved around holidays with Krys, his children and his grandchildren. For me, the one word to summarise Peter is ‘upbeat’. He was always positive and the last time we spoke, just three weeks before his passing, he was still very upbeat although quite seriously ill. This is echoed by Bryan Monkman, “Peter was always upbeat, positive and funny, even whilst enduring his treatment for leukaemia.” So, it is with sadness that we pay this tribute to an innovative payroll professional who lightened our lives with humour and a charismatic presence, leaving a lasting legacy to the payroll profession. The funeral took place on 12 February, at Blacon crematorium. Bryan Monkman attended the funeral, representing the CIPP.
a charismatic presence, leaving a lasting legacy
With heavy hearts Peter and I decided to join Trevor and form the private sector body BPMA (British Payroll Manager’s Association), now CIPP. Again, Peter was inspirational in the formation of the syllabus for the BTEC Diploma in Administration although he left the production of material largely to others, notably his friend and colleague Lawrence Warrell. So it was at the second Peterborough Software sponsored National Payroll Conference that Peter launched the BPMA with his first major speech, receiving a standing ovation and an article in The Times, and we celebrated with now customary drinks. We three then worked hard arranging the first open meeting for all interested parties held in Coventry and fronted by Peter who was voted in as the first chairperson, a role he loved, so much so that he bought a personalised number plate with the letters BPMA. It was this first presentation that inspired Chris Williams to join the BPMA on day one. Chris says “As a member of the Private Sector Payroll Group (PSPG), and having failed to join APSA as I was a private sector employer, I felt strongly that there was a need for a national joint payroll body. “So, attending the second Peterborough Software Payroll Conference in Park Lane in 1984 I was excited to hear there was to be a session on exactly this. The speaker introducing the concept was Peter Blackhurst, who was the current secretary of APSA. As soon as he started to speak enthusiastically about the prospective new association, the hairs on the back of my neck started to tingle. Here was someone committed to forwarding the progression of payroll, someone who I knew from his enthusiasm could engage payroll professionals to join the cause.” Chris was not the only person to be so inspired and over one hundred payroll people turned up for the inaugural meeting. Chris continues, “Asking for like-minded
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| Professional in Payroll, Pensions and Reward |
Issue 68 | March 2021
All new P11D course
Optimised for virtual classroom
Brand new course launching 8 March, P11Ds, expenses and benefits . Contains everything you need to know about this annual process. If you’re new to payroll and need to know how to report your employee expenses and benefits, or just need a refresher and want to ensure what you are providing is effective and compliant, then this course is for you.
Enrol online today at cipp.org.uk/training
For more information or to enrol: Visit: cipp.org.uk/training Email enquiries@cipp.org.uk
Call: 0121 712 1023 Live chat with us
cipp.org.uk
@CIPP_UK
O N L I N E L E A R N I N G
CIPP update
Off -payroll working (IR35) Mediumand large organisations in all sectors of the economy will become responsible for assessing the employment status of individuals whowork for them.
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 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: ● Bupa UK Payroll Services ● Willis Towers Watson 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 . ● Payslip survey – This month also sees the launch of our annual payslip survey. The survey helps us to create a trends report, highlighting payslip trends, the contents of different payslips, how easily companies have been able to itemise payslips and whether helps software has needed to be implemented. To find out more and to take part in the payslip survey, keep an eye on your CIPP emails, our website, and our social media channels. ● P11Ds, expenses and benefits course – New opportunities bring new ideas and new plans. If you’re thinking of upgrading the knowledge and skills of yourself and your team, then our new P11Ds, expenses and benefits course could be of interest. Designed to ensure that those in payroll and finance can calculate and report accurately and with confidence: www.cipp.org.uk/course/p11ds-expenses-and- benefits. WE HOPE you are all looking forward to the fresh new shoots of spring and the new opportunities it promises. Whatever new opportunities the spring brings, we are here to help, so don’t hesitate to contact us: enquiries@cipp.org.uk . ● Price freeze – To help with these new opportunities, we’re pleased to announce that we’ve frozen our prices this year, so you can access our events and training courses at the same price as last year. We reduced the prices at the end of last year and these reduced prices stay around for a while longer (please see cipp.org. uk/T&Cs/ ). This could be the opportunity you or your team are looking for, to take advantage of the great value payroll training courses currently on offer. ● Annual General Meeting – On 31 March we will be holding our annual general meeting (AGM). Paid associate, full, fellow, and Chartered members are eligible to vote and attend the virtual meeting, taking place at 11am via Microsoft Teams. The business of the AGM will be to elect directors to the board, to approve the accounts for year ending 30 June 2020 and to elect the auditors, amongst other business. If eligible, you can book your place, support the Chartered institute, and cast your vote online: www.cipp.org.uk/my-cipp/annual-general-meeting. ● Software directory – You’ll have noticed that with this issue you will find our annual software directory – a handy reference tool if you or your organisation are thinking of changing your software provider. The tables allow you to quickly review and compare key features at a glance and will aid your research into this business- critical task. i i
Make sure you are compliant with the legislation with our
Off-payroll working (IR35) webinar
and
Off-payroll working (IR35) and other employment status considerations training course.
Book your place today
Webinar
CPD 3 points Course
CPD 1 point
For more information or to enrol: Visit: www.cipp.org.uk/training Email enquiries@cipp.org.uk
Call: 0121 712 1044 Live chat with us
cipp.org.uk @CIPP_UK
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| Professional in Payroll, Pensions and Reward |
Issue 68 | March 2021
MY CIPP
On your behalf
Policy team update
The CIPP’s policy and research teamprovide an update on developments
T he CIPP’s policy team has been kept busy by attending various forums, hosting informational webinars and presentations, and creating both news pieces and extended articles to keep members and the wider profession up to date.
In October 2019, when the reforms were due to be introduced from 6 April 2020, the team posted a Quick Poll on News Online , asking “What concerns do you have about your readiness in April 2020 for off-payroll working rules?”. This question was also posed in the webinar, hosted on 19 January 2021. The responses are shown in Table 1. ...‘payroll obligations’ has become more of a worry... Whereas most areas seem to be causing less concern (with the exception of communications with the supply chain), ‘payroll obligations’ has become more
of a worry, and continue to be the area, unsurprisingly, that payroll professionals are most conscious of. Another Quick Poll was hosted in July 2020, which asked “In light of the fact that it has now been confirmed that the off- payroll working reforms will definitely be introduced from 6 April 2021, how ready are you for the changes?”. This question was also posed in the webinar. The responses are shown in Table 2. Although the question was presented to two potentially different audiences, the results indicate that marginally more companies are either ready for or are starting to prepare for the reforms, which is a positive sign. There are, however, still companies that are optimistic that the reforms will be delayed again, but there has been no indication of this. So, the resounding advice from the CIPP is ‘start preparing now’.
Readiness for off-payroll working
It is widely accepted that from 6 April 2021 the off-payroll working reforms will be implemented in the private sector, impacting any businesses classified as being either ‘medium’ or ‘large’ in size. The policy team recently hosted the ‘BeKnowledgeable: Off-payroll working webinar’ and wanted to assess how ready businesses are for the changes, identify their main worries, and gauge changes over time.
Employer NICs holiday for veterans
The CIPP responded to the consultation, launched by HM Revenue & Customs (HMRC) in conjunction with the Office for Veterans’ Affairs, which explored granting businesses that employ veterans an employer-only National Insurance contributions (NICs) holiday on their earnings (http://ow.ly/TYKt30rtI9M). The government has now published its response to the consultation explaining some of the key elements of the policy, ahead of detailed guidance being provided. The main area of interest to payroll professionals will relate to how the relief is provided in the first tax year of its introduction i.e. 2021/22. During the first year, as there is no real time information (RTI) solution, employers will be required to pay the associated employer NICs on the earnings of veterans and will be able to reclaim this from April 2022 onwards.
| Professional in Payroll, Pensions and Reward | March 2021 | Issue 68 8
Policy hub
From tax year 2022/23, a RTI solution will be developed. Legislation for the relief will include a three-year sunset clause, from April 2021. The policy will be reviewed at that point and, if it is not fulfilling its aim of helping veterans into civilian employment, it can be withdrawn. In terms of definitions, the government will define a ‘veteran’ in accordance with criteria laid out in established NICs legislation and the Armed Forces covenant, and does not consider it necessary to extend the definition to include those who have only served in the Reserve Forces. Additionally, the relief’s availability will not be dependent upon when the veteran left the Armed Forces. The government intends to define ‘qualifying employment’ in line with the approach put forward in the consultation document but will ensure that veterans are not restricted for qualifying for the relief if they have previously served in the Armed Forces and then re-joined. The relief will be available for a period of their first twelve months of civilian employment every time they leave HM Armed Forces. At the time of writing, further guidance
is awaited, which will be published by HMRC prior to April 2021, confirming the information and records an employer will need to keep and retain for qualifying employments relating to tax year 2021/22. The types of evidence that can be used to determine a veteran’s eligibility will also be provided. ...for a period of their first twelve months of civilian employment... CJRS: publication of employer names HMRC has confirmed it is publishing the names of employers that have utilised the coronavirus job retention scheme (CJRS) for periods from 1 December 2020. Initially, employer names were published on 26 January 2021 (http://ow.ly/ cWQL30ruxSx), with additional information being provided in February, including the value of claims (within a banded range) and the company registration numbers.
Names are to be published on a monthly basis. HMRC has confirmed that the details of employers demonstrating that publication of their name would lead to a risk of violence or intimidation to individuals, or anyone living with them, will not be included. There is an online application form (http://ow.ly/Izv730rtIRN) for employers in this position to complete. Details will not be published before HMRC makes a decision on the case, and the employer will subsequently be notified of it. Employers must submit the application forms themselves and must not utilise an agent to submit the form on their behalf. Employees also have the ability to check if a CJRS claim has been made on their behalf through their online Personal Tax Account, from February 2021 onwards. It is hoped that this will prevent ‘furlough fraud’, which unfortunately was prevalent under the previous version of the scheme. This could involve businesses encouraging employees to carry out work whilst claiming furlough pay for them, or claiming for employees who do not qualify, or claiming too much in relation to an employee. n
BeConnected: National Forums Delivered by our policy officers, Gemma Mullis and Lora Murphy, these BeConnected: National Forums are the perfect way to understand how recent changes will affect your and your team’s day to day roles. We’ll keep you up to date on any changes and updates revealed in the March 2021 budget and also tell you how you’ll need to implement and process these changes.
Launch date 27 April
Now open to all current CIPP members.
Additional dates: 6 May, 12 May, 20 May, 26 May.
Visit cipp.org.uk/events/events-calendar , to book your place and find out more.
cipp.org.uk
@CIPP_UK
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| Professional in Payroll, Pensions and Reward |
Issue 68 | March 2021
MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q. A company is looking to make some employees redundant. There is a dispute as to whether an employee in question would be eligible for statutory redundancy pay due to their start date. They commenced employment 1 September 2019 and are due to be made redundant 31 August 2021. Can you advise? A: Length of service for redundancy calculations are based on complete years of service. From the dates provided, these employees have been employed for a full 24 months; therefore, they are entitled to redundancy pay. For reference, HM Revenue & Customs (HMRC) provides an online calculator where details of age, start date, redundancy date and weekly salary can be entered to find out how much statutory redundancy an employee is entitled to: https://bit.ly/3oW3Me8. Q. Is a period of incapacity for work (PIW) linked to an earlier PIW if the time between them is less than eight weeks? If so, is statutory sick pay (SSP) payable from day one? A: You should link PIWs and treat them as one PIW if the gap between them is eight weeks (56 days) or less. If all three waiting days have not been used in the first PIW, use any remaining waiting days at the start of the next or series of linked PIWs. A PIW is a period of sickness lasting four days or more in a row. All days of sickness count towards the total number of days in a PIW, including: bank holidays, weekends, non-working days. If the period of sickness is less than four days in a row there is no PIW and you do not need to do anything. SSP is not payable for the first three qualifying days in a PIW.
There is no business presence in Romania. The employee has been in Romania for 107 days so far. What certification is required from HMRC in relation to their class 1 National Insurance contributions (NICs)? Is there anything from a tax perspective required for payroll purposes? A: If an employee is working temporarily in the EU then they must get a certificate from HMRC to exempt them from Romanian social security. Social security is usually paid in the country in which duties are performed. Ideally all applications should be submitted prior to the employee departing the UK. Form CA3822 must be completed. HMRC will then issue a certificate to ensure payment of UK NICs continue. HMRC provide guidance on which country's social security contributions to pay: https://bit. ly/2LGudG8. With regards to the tax position, an employer would have to refer to the relevant double taxation treaty (DTT) the UK has in place with the country. Most DTTs require an employee to be present in the overseas country for 183 days before double taxation arises. This would mean that an employee would continue paying UK tax until their overseas presence exceeds 183 days. When dealing with globally mobile employees, it is advisable to speak to a tax advisor to deal with any complexities that may arise from overseas employment. HMRC provides guidance on DTTs: https://bit.ly/3iqrQ6d. Q. A company is looking at introducing a scheme wherein employees can purchase extra holidays (not using a salary sacrifice arrangement). The deduction will be a gross deduction
HMRC provide guidance on manual SSP calculations along with the rules surrounding both SSP and PIWs: https:// bit.ly/3iowOR6. Q. W hen will statutory maternity pay (SMP) commence for an employee whose baby is born mid-week and has previously been on furlough leave and pay? Also, does the calculation of the average weekly earnings (AWE) differ where furlough pay has been applied? A: Child-related statutory leave can start on any day of the week but can only be paid in completed weeks. Where an employee works up until the birth, the leave and pay must commence on the first day after the birth of the baby. AWE is usually calculated based on all payments made in the reference period, which is the eight-week period before the qualifying week. Due to Covid-19, a temporary rule was introduced to protect employees on furlough leave where their AWE calculation is lower due to the pay received whilst on furlough. In this situation, employers would base the AWE calculation on the pay the employee would have received, had they not been on furlough. HMRC provide guidance on how to manually calculate an employee's payments for SMP: https://bit.ly/3bP5RER. How to establish the earnings employees may have received had they not been furloughed is a contractual matter, and there is no formula to assist. Whatever calculation an employer may choose to use must be justifiable should HMRC carry out an investigation. Q. An employee is currently living in Romania on a temporary basis but is working for the UK-based company and being paid through the UK payroll.
| Professional in Payroll, Pensions and Reward | March 2021 | Issue 68 10
PAYROLL ASSURANCE SCHEME DON’TWAIT UNTIL IT’S TOO LATE Can you afford penalties of up to £10,000* per day for non- compliance? Make sure your people and processes are working, and get ahead of any nonconformities before they become a problem.
Policy hub
therefore saving the employee tax and class 1 NICs. What advice can be given in relation to this kind of arrangement? Would it be classed as a flexible benefit arrangement and would it impact the national minimum wage (NMW) calculation? A: If employees were having the entire cost of their holiday purchase deducted in one payroll period, then this would not be a salary sacrifice arrangement; it would be treated as unpaid leave. This would not reduce the employee’s pay for minimum wage purposes as the employee’s working hours and salary would be reduced in the month in which the leave is taken. However, if an employer is contractually agreeing with employees to reduce their salary by an amount of holiday purchase over several months, then this would be regarded as a salary sacrifice arrangement as it is a change to the employee’s terms and conditions of employment. The holiday purchase would reduce the contractual wages of the employee and would therefore affect the NMW calculation. HMRC guidance does state that no salary sacrifice arrangement should lower an employee’s wage below the minimum and that the employer must have checks in place to safeguard the minimum wage. Holiday purchase is one of the benefits that does not fall under the optional remuneration arrangements rules. Q. With regards to HMRC’s coronavirus job retention scheme (CJRS) guidance update from November 2020 in relation to notice pay, does this only apply to redundancy notice? A: The update in the CJRS guidance relates to all types of contractual and statutory notice periods. From 1 December 2020, employers are not able to use the CJRS to claim served contractual or statutory notice periods. This includes redundancy, resignation, and retirement notice periods. It is important to note that a payment in lieu of notice (PILON) cannot be claimed under the rules of CJRS as it would be classed as a termination payment. Termination payments have always remained outside the remit of the CJRS. Q. An employee has sadly passed away and the employer wishes to make a payment to the family to assist with
funeral costs. How should this payment be treated for the purposes of tax and NICs? A: Under section 406 of the Income Tax (Earnings and Pensions) Act 2003 (https://bit.ly/2XSeera), a tax-free payment can be made on the death or permanent disability of an employee. These types of payment are not subject to NICs. Q: Can an employer split a payment for redundancy over tax years so that the employee can make use of the new tax
allowances in 2021/2022? A: Page EIM42290 in HMRC’s
Employment Income Manual (https://bit. ly/3sJ6fen) states that money earnings are treated as received for assessment purposes, and paid for PAYE purposes on the earliest of the following: ● when a payment of earnings is made or when a payment on account of earnings is made ● the time when a person becomes entitled to payment of earnings or a payment on account of earnings. An employer would not be able to delay part of the payment to the next tax year to allow an employee to take advantage of any new tax thresholds; this could be interpreted by HMRC as tax avoidance. An employer could agree with the employee to split the net value over several months, provided there is a written agreement in place. Q: A company is conducting interviews over the coming weeks. To give financial assistance to the interviewees, the company have agreed to pay their travelling expenses. How should these be treated for tax and NICs purposes? A: The interviewees are not employees so any payments made to them will not be subject to tax and NICs, as directed under section 62 of the Income Tax, (Earnings and Pensions) Act 2003 (https://bit. ly/3qpMN46). n
For more information or to enrol: Visit: www.cipp.org.uk/study Email enquiries@cipp.org.uk For more information Visit: cipp.org.uk/PAS Email enquiries@cipp.org.uk Call: 0121 712 1000 Live chat with us Call: 0121 712 1023 Live chat with us
cipp.org.uk @CIPP_UK cipp.org.uk @CIPP_UK
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| Professional in Payroll, Pensions and Reward |
Issue 68 | March 2021
*correct at time of publication
MY CIPP
Spotlight on...
profession I love, able to study and impart my knowledge to members – and my working hours suit my lifestyle perfectly. It’s a win-win situation, and I am fortunate to have been given the opportunity. Being promoted to advisory team leader has given me a big sense of achievement. How do you feel when you have made a positive difference to someone through your advice? It’s a fantastic feeling knowing that you have answered and helped solve a member’s query. The relief in their voice or that ‘thank you so much for your help’ in a return email gives immense satisfaction knowing I have helped a fellow payroller resolve an issue. The additional stress placed upon payrollers this year has been incomparable to anything I can remember in 36 years. If our team has been able to relieve their worries in any way, that gives immense satisfaction and pride in the jobs we do. The role of advisory team member requires a good understanding of payroll legislation, a clear head, an excellent sense of humour, and being both a good listener and a good speaker. Tell us about a typical week as an advisory teammember? It is a nonstop treadmill from 9 to 5. We have regular team chats to discuss any unusual queries that come in as each of us have areas of expertise in different fields of payroll legislation. The policy team provide updates on any forthcoming changes, enabling us to study the material and prepare for any queries we receive. Furlough however has been an enormous challenge for us as the rules have changed with such pace. We have depended upon each other and the policy team for guidance and support dealing with the queries. We wouldn’t have got through
these past months without the support of one another and I cannot thank the team and the policy team enough, as it has been one crazy year. The number of queries we have dealt with have increased by 54% from April to November compared to the same period in 2019, which indicates the pace at which we have been working. 2020 is a year every payroller will never forget. If payroll does not get acknowledged as a recognised profession after all our members have achieved with great sacrifices at times, then I think a government petition will be the next step. What techniques and sources do you use to provide detailed accurate answers? Referring to legislation and translating that into layman terms. Understanding why you have to carry out a certain task to remain compliant is beneficial to all payrollers. Better understanding leads to less confusion and improved processes within a payroll team. To keep up to date with general legislation requires reading, writing guidance notes for myself and my team, regular meetings with policy, and directing queries to HMRC for clarification. I am constantly studying and learning even after all these years in the profession. I maintain my own payroll compendium with links to all payroll legislation for ease of access. What’s the most interesting fact you have ever heard about payroll? Recovery of an overpayment of wages; section 14 of the Employment Rights Act 1996 means an employer has the right to deduct an overpayment even if there is no agreed deduction clause in the employee’s contract. Considerations have to be made of course, but this was a very interesting topic. n
Lorna Nicholls ACIPP CIPP’s payroll advisory team leader
How did you start your payroll career? After leaving school I decided to go into nursing. The careers advisor had recommended a career as a speech therapist so I thought, if nursing didn’t work out, I could attempt that; but I didn’t know what to do whilst waiting for the next year’s intake of student nurses. After replying “maths” to my careers advisor asking what I liked doing, next thing I was working in the local hospital as a wages clerk collecting and totalling hours on the nurses’ timesheets. I enjoyed ‘wages’ so much I forfeited my nursing career and stayed – 36 years later I am still working in ‘wages’. I fell into payroll, fell in love with it, and stayed. To get the job I sat a maths and English test and that was it. I learned my skills on the job as many older payrollers will be familiar with. I have attended so many courses over the years, I have lost count. How did you move into policy and advisory? I was working incredibly long hours, my work-life balance was non-existent, and I wanted to spend time with my loved ones and enjoy other interests. A job in the CIPP’s Advisory team came up; I applied, and here I am. I am still part of the
| Professional in Payroll, Pensions and Reward | March 2021 | Issue 68 12
To appear on this page contact editor@cipp.org.uk
CHARLES BUTTERWORTHAPPOINTEDASMANAGINGDIRECTOR LEADING BUSINESS solutions and software provider for mid- to large-sized organisations, The Access Group, has appointed Charles Butterworth as managing director of its Access People division to lead the human resources, payroll, learning and development and compliance teams and solutions. Butterworth’s role will include further integration of recent company acquisitions into the Access People business for the benefit of customers, partners and employees. Charles Butterworth, who recently was managing director with responsibilities extending across data, analytics and software business for Experian UK & Ireland and EMEA, commented: “I am delighted to be joining The Access Group at such an exciting time in the development of the business. The team at Access and the capabilities of the Access People division are world class and I am particularly impressed by the opportunities for the business in the years ahead.” Chris Bayne, chief executive officer at The Access Group said: “Charles brings exceptional experience in growing ambitious organisations and is an accomplished leader of large teams across multiple locations and disciplines.”
SO LONG, FAREWELL… COLIN JACKSON ACIPP has retired from his role as a CIPP Payroll Assurance Scheme assessor. Colin was part of the team that merged the CIPP’s Payroll Assurance Scheme and the Payroll Quality Partnership which ensured that the service was right for the clients. Colin’s professional contribution has been invaluable to the PAS standard, supporting new assessors and has helped numerous organisations achieve success. The CIPP extends its thanks to Colin for his valuable involvement to the processes and procedures.
CAN YOU AFFORD FINES OF £10,000 * A DAY FOR NON-COMPLIANCE?
Certificate in Pensions Administration The Certificate in Pensions Administration has been developed with pension practitioners to ensure that it meets the needs of the industry. It provides payroll and pension staff with relevant training so businesses can safeguard against the financial risk for non-compliance.
CPD 15 points
*correct at time of publication
Visit cipp.org.uk/study , email enquiries@cipp.org.uk or call 0121 712 1044 for more information.
@CIPP_UK
cipp.org.uk
13
| Professional in Payroll, Pensions and Reward |
Issue 68 | March 2021
O N L I N E L E A R N I N G
PERSONAL DEVELOPMENT
Learn how to process a number of common termination packages correctly, from redundancies to contractual breaches, retirement and death-in-service. Termination payments
Diary of a student…
HarriotteMcNamaraMCIPPdip, payroll administrator, Gregory Distribution Ltd.
Visit www. cipp.org.uk/training to find out more
Tell us a little about your background and life so far? I’m originally from Essex but moved to Devon thirteen years ago with my husband. We have two dogs which we like to take for walks on the moors when it’s not raining too much. What can you tell us about your career and qualifications? I completed my GCSEs and A-levels but didn’t go to university as I never really knew what I wanted to do. I have had a varied career, but I have always been drawn towards an administrative role as I have a natural ability to organise things. Like many people, I didn’t set out to work in payroll, but found it is a role that suits my character very well. Why did you choose to study the Foundation Degree? When I started working for my current company, they offered me the chance to complete the Foundation Degree. I felt it was something that could only benefit me, so I gladly accepted the offer.
evenings and weekends, but it’s definitely worth it when you complete the course. If you can get some support from your family members, that will be invaluable. I am grateful both to my husband for helping me revise and doing a lot of the cooking whilst I was busy studying, and to my mum for proof-reading my assignments. How did you manage the work- life balance and your study? Do you have any tips for others in the same position? I think being organised helped me a lot. During my second year, I got married and moved houses at short notice without missing any deadlines or taking time off work. I had a lot of support from my family which was a massive help, and I made a lot of ‘to do’ lists so I knew what I had to do and when. I didn’t have much of a social life though. What would you say is the most important thing you learnt? Everything! The modules are quite varied and focus on topics that apply to the wider business as well as processing a payroll so you gain a multitude of different skills that you can put in to practice on a day-to-day basis. What did you gain from this qualification – both in terms of skills and also career progression? It gave me a lot more confidence within my current role, so I feel much better- equipped to deal with any situations that are out of the ordinary. You learn to do a lot of research for yourself which was invaluable when the furlough scheme was introduced. n
How did you find the qualification?
CPD 3 points
Time-consuming and rewarding. I did have to devote a lot of my free time to studying but it was definitely worth it. I found the topics both interesting and challenging and they definitely broadened my knowledge and increased my confidence at work. What advice would you give to others who are thinking about studying in order to improve their career? It’s a lot of work, so you need to be committed and prepared to give up your
For more information: Visit: www.cipp.org.uk/training Email enquiries@cipp.org.uk
Call: 0121 712 1044 Live chat with us
cipp.org.uk @CIPP_UK
| Professional in Payroll, Pensions and Reward | March 2021 | Issue 68 14
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