MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Long-term sick leave and statutory sick pay (SSP) Q: We have an employee on long-term sick leave and sadly her circumstances mean she may never be fit to return to work. We’re on a rolling 12-month sickness calendar, although contractual sick pay (CSP) is on a three-year rolling schedule. The employee exhausted CSP in March and SSP ended in December. She has been issued a SSP1 to apply for universal credit / employment and support allowance (ESA). Is there a point when the Department for Work and Pensions (DWP) stops payments and we take up SSP again? A: The employee would only qualify for SSP if another period for incapacity to work was formed after eight weeks, otherwise it would be classed as a linked absence. If the employee has been receiving ESA, then returns to work and is absent within 12 weeks, they wouldn’t qualify for SSP. The office that paid the benefit should give the employee a ‘linking letter’ which they can pass to the employer on their return to work or when they’re off sick. This can be used to check the eligibility for SSP. Here’s a link to the guidance: https:// ow.ly/68kr50RA6jq.
A to category C in the middle of a tax year, would the correct procedure be to calculate the earnings before the birthday at the original category, applying the full year’s thresholds and then the earnings after the birthday at the new category? Or are we supposed to apply category C to the whole year’s earnings and refund all employee National Insurance contributions (NICs)? A: Where a director reaches state pension age midway through the tax year, they will be liable for class 1 NICs on any earnings prior to their birthday. You would apply the full year bandings, giving priority in your calculation to the category A earnings within the reconciliation. Section 60 of CA44 has a useful example of how this would be calculated and confirms the treatment of the earnings. Please see here for further guidance: https:// ow.ly/oRho50RY3so. Temporary workplaces Q: We have asked an employee who runs one of our branches in the Southwest to take over the temporary running of another workshop in Manchester while we recruit a new manager. This would mean her being away from home for at least three days a week. We will pay for her accommodation, but would like to know if this is classed as a benefit in kind (BiK)? A: Travel and mileage claims will all be based on contracts of employment. If your staff member has a fixed work address, i.e. the branch in the Southwest, as opposed to variable locations, the Manchester branch could be deemed a temporary workplace. Travel and accommodation costs would be allowable, and no BiK would arise. I stress could, as frequent travel to the same office
could be deemed a second permanent workplace. A temporary workplace is one where the employee is completing a task of limited duration or temporary purpose not expected to exceed 24 months. To apply this rule you should treat duties as performed to a significant extent at any workplace if the employee spends 40% or more of his or her working time at that place. Here’s a link to the guidance for further reading, please see subheading 3.11 and 3.13 onwards: https://ow.ly/ ZT6y50RAt5Q. The HM Revenue and Customs (HMRC) guidance is thorough in this area, so look at the 490 guidance: https://ow.ly/ bykG50RAtaz.
Is the provision of accommodation for temporary work classed as a BiK?
Late P11D returns Q: What are the penalties for late P11Ds? A: The penalties for failure to complete or late return of P11D forms is £300 per form. After this, a continuing penalty of up to £60 per day per form can be issued. See https:// ow.ly/9xc850RAtvr. The penalty for late submission of the P11D(b) is £100 for each month (including part-months) per 50 forms that class 1A National Insurance (NI) is due on. Additional penalties will be issued depending on how late the P11D(b) submission is, for example, at 12 months. See https:// ow.ly/2CeT50RAtVB.
Do we take up SSP again if the DWP stops payments to someone on long-term sick leave?
Directors reaching state pension age Q: If a director changes from category
| Professional in Payroll, Pensions and Reward | July - August 2024 | Issue 102 8
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