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POLICY HUB
Statutory maternity pay (SMP) rates across two tax tears Q: How would SMP be calculated in scenarios where the pay period crosses tax years? A: The revised statutory rates for 2023/2024 will be effective from Sunday 2 April 2023. If the employee’s SMP pay period began on a Sunday, then the new rate of £172.48 will apply for the entire week commencing 2 April 2023. If the employee’s pay week commenced on any other day, the SMP due would be the rate which applied on the date beginning that week. HMRC guidance states: “Annual uprating of maternity related statutory payments takes place on the next full SMP / SAP / ShPP payment week if the payment week starts on any day except Sunday.” Please see here: http://ow.ly/4pP950NlgIo.
terms and conditions. There are also NMW implications to be aware of.
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“How do salary sacrifice schemes interact with workplace nurseries?”
Treatment of director P11D forms Q: Why does a director’s P11D have to be ticked? A: A director cannot approve and check their own expenses. Tax relief can then be claimed via a self-assessment tax return (SATR) if they’re a sole director of a small company. However, they would use their accountant to check and approve their expenses, as their accountant would be responsible for submitting the SATR. However, most companies are large, limited companies, so in this case, we’d be dealing with a limited company director. In this instance, there wouldn’t normally be a personal accountant or a stringent checking procedure in place for the director of a large limited company. All expenses would be approved by a finance administrator or manager, someone of a lower position within the company, which could be open to abuse by an unscrupulous person in such a responsible position. Since April 2016, directors are included in the benefits code of the ITEPA, Section 63. See also 480 Chapter 2 (2.2), relating to the checking system. The tick simply highlights the director’s position to HM Revenue and Customs (HMRC), which would have its own checking systems in place. If, upon receipt of the P11D, HMRC was concerned some expenses didn’t appear reasonable, it would have the right to approach and question the amounts directly with the director. It’s simply a safeguarding measure to prevent fraud.
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“What happens when an employee has reached their lifetime allowance limit?”
Pensions lifetime allowance Q: An employee has reached their lifetime allowance limit and will cease pension contributions as of December 2022. Payment to the equivalent value of employer contributions will be paid to the employee as a pension supplement allowance, which will be subject to both tax and NI through the payroll. This allowance will incur an unexpected higher employer’s NI bill and we’d like to know if we can reduce the employee’s net pay by the additional employer costs. A: An employer cannot pass their own liabilities onto an employee. if the company decided to recoup these additional employer costs from the employee, the company director may be liable to prosecution by HMRC under Section 114 of the Social Security Administration Act 1992. For reference, see: https://bit.ly/3In0op1. n
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| Professional in Payroll, Pensions and Reward |
Issue 89 | April 2023
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