POLICY HUB
How to treat gift vouchers for performance Q: We’re looking to implement a new reward / recognition scheme and are thinking about awarding gift vouchers. Is there any exemption here if the amount is £50 or lower? Could we put the value of the voucher on the employees’ P11Ds, so they incur the additional costs, and report it this way? Or should we do it through payroll as gross once P11Ds are gone? Or do we report the value on our pay as you earn (PAYE) settlement agreement (PSA) and incur the costs for this? A: This won’t meet the trivial benefit criteria as it’s a reward or recognition scheme. Here is a link for further information about trivial benefits and the criteria: https:// ow.ly/5Ooy50RAzkE. If the vouchers are exchangeable for cash, they will count as additional earnings and the value will need to be processed through the payroll subject to tax and class 1 NI. If the vouchers are exchangeable for goods and services, the value will need to be reported on the P11D and then added to the payroll for class 1 NI only. Here’s a link which covers the reporting requirements when providing gift vouchers to employees: https://ow.ly/hIeS50RAyZH. You could possibly settle the liabilities due on a PSA. This must be agreed with HMRC. See: https://ow.ly/LrTC50RAz9R.
payroll records to reflect the expected recovery in real time. It states in the CWG2 guidance that an unintentional overpayment of wages isn’t deemed as earnings income and therefore not subject to PAYE or NI contributions. The company would then need to decide what to do regarding recovery depending on the amount. This could be escalated to a small claims court, if needed. Pay rises while on maternity leave Q: How should employees on maternity receive an increase in pay when appraisals are made for the company? Specifically, how should the new statutory maternity pay (SMP) rate for an employee on an hourly rate be calculated? A: Where a pay award occurs while someone is on maternity, an employer must recalculate the average weekly earnings (AWE) as if the new salary rate is in place. Any difference in SMP generated by the recalculation is to be paid to the employee. This is due to a piece of case law – Michelle Alabaster vs Barclays Bank PLC. In most cases, this will impact the first six weeks of SMP. However, for some low earners, this could impact the full 39-week payment period. See page 24 for an article by the CIPP’s policy and advisory lead which provides more information on Alabaster around the steps that need to be taken and the relevant timeframes.
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How do we report the value of gift vouchers?
How should pay rises be calculated for those on maternity leave?
Overpayments Q: An employee has left and has been overpaid. How do go about recovering this overpayment? A: Firstly, you will need to work out the gross and net overpayment and contact the employee for them to make a net repayment. If there’s no intention to recover the amount from the employee, you should leave all the records as they reflect what the employee has been paid. If you do have an intention to recover the money and can show that you have followed a course of action to recover the amount, then you can still adjust the
Adoption leave payments Q: I have an employee who is adopting a second child while on adoption leave with their first. Are they able to have two lots of statutory adoption pay (SAP)? A: An employee can have two SAP instances running in tandem, providing the adoptions are not part of the same agreement and have separate matching certificates. In this scenario, the employee could have two amounts. This position is detailed in the statutory payment manual: SPM130600, here: https://ow.ly/WWin50RRh9a. n
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| Professional in Payroll, Pensions and Reward |
Issue 102 | July - August 2024
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