Professional September 2020

in Payroll, Pensions & Reward PROFESSI NAL Issue 63 September 2020 Official publication of The Chartered Institute of Payroll Professionals Compliance success

Future of payroll report Annual survey

Tributes to Lawrence Warrell (1933–2020) Abidingmemories

Furlough on the frontline Payroll in a pandemic



INTEGRATED Human Resources, Payroll and Talent Management You choose your required modules

0845 370 3210


“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness” The opening words from A tale of two cities , by Charles Dickens (1812–1870) (

For those on the payroll frontline the last six months have been a testing time, personally and professionally. Pages 34, 35 reveal contrasting and poignant views of roundtable participants. It is surely unarguable that without the

The UK is now witnessing growing numbers of employers announce redundancies, which seem to be occurring just as the claimable amount under the CJRS diminishes. See pages 24, 25 for a timely reminder of redundancy processes and procedures. Are there sound arguments for extending the CJRS? It is to be hoped things improve later this or early next year. Pages 50, 51 outline survey findings about the future of payroll.

coronavirus job retention scheme (CJRS) the UK would be experiencing extraordinary (perhaps unprecedented) levels of unemployment. Recent statistics (see page 16) – derived from PAYE real time information data obtained from payroll – indicate how crucial the CJRS is to employers and employees and, consequently, for the economy.

Mike Nicholas MCIPP AMBCS ( Editor

Chair’s message

This issue’s theme of compliance success drew me to one of the key aspects of any service delivery model whether in-house or outsourced. That is, everyone understanding the role they must play within the delivery model and the role others have to play. I have often used the analogy of a jigsaw puzzle, and every piece playing their part to make up the complete picture of service. Culturally, compliance must be thought of in the same way as health and safety and customer service – it is the collective responsibility of the team. It is not the responsibility of an assurance officer, or audit personnel. Rather, everyone, regardless of hierarchy, has a key part to play in both ensuring compliance is maintained and flagging when a risk may occur which requires review. With broader data protection responsibilities, many new systems are being designed and built. However, having all team members

fully briefed on risk, fraud, money laundering and other aspects of assurance, creates much greater strength in compliance than having that responsibility rest on only a few shoulders. Maintaining a focus each year on continuous training and updates for the team is an especially important part of development and assurance. With legislative changes, as well as broader fiscal reviews, having the whole team trained and reviewing the impact of changes creates a solid barrier to protect the business. I hope you enjoy all the articles within this edition, and, as always, do feel free to make contact if you have any enquiries or considerations you would like me to address.

Jason Davenport MCIPP MIoD ( Chair, CIPP

It has been noticeable that payroll professionals have been working incessantly (as they always do), but all the more so during the extraordinary time since the lockdown in March. Payroll departments of many sizes have decamped CEO’s message

Behind the scenes, the CIPP continues to ensure all our content and material is accurate, timely and up to date. As is evidenced in the growth and take up of two of our key educational offerings, namely the Payroll Technician Certificate and the Certificate in Pensions Administration. The Payroll Technician Certificate shows growth year on year, and it is evident its content is crucial and timely for those entering the profession, needing a refresher or returning into the payroll industry. As an online qualification it is particularly relevant for the times in which we live. This equally applies to our online Certificate in Pensions Administration as it becomes more apparent that increasingly payroll professionals play a key part in the administrative area of pensions. This time of year sees the career roadmap developing as it’s also the time for enrolment on to our Foundation Degree (either the payroll or pensions offering). Make sure you enrol, and the benefits to both your career and your employer will be considerable.

from an office environment, equipped with technology, and worked from home. This, too, has brought many challenges, let alone the administration of the CJRS. How and where we work going forward will be an interesting workplace discussion, but a point I have picked up in many conversations within payroll leadership teams has been the impact of mental health. Whilst mental health awareness has, quite correctly, had the focus it deserves, working from home by employees, some in isolation, is a factor that must be considered in future working. At the office, integration, creativity, discussions – and those conversations over the water cooler or in the kitchen – are all equally important to mental health, and a balance needs to be struck. It is encouraging that even during this pandemic that employers are actively ensuring their payroll and pensions staff are suitably skilled and educated and the CIPP are pleased to play a leading part.

Ken Pullar FCIPP ( Chief executive officer, CIPP


| Professional in Payroll, Pensions and Reward |

Issue 63 | September 2020

in Payroll, Pensions & Reward PROFESSI NAL

Also available online at


September 2020


27 Compliance success

by Jerome Smail





Tributes to Lawrence Warrell

Summer Economic Update by Lora Murphy

When we were young by Ken Pullar




Overcoming compliance by Ian Neale

Redundancy processes and procedures by Gemma Mullis

Returning to the workplace by Diana Bruce

| Professional in Payroll, Pensions and Reward | September 2020 | Issue 63 2



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 | Advertising Jill Bonehill 0121 712 1033 | Design James Bartlett, Nicole Davis and Sam Parkes Printing Warwick Printing Company Ltd

HMRC’s approach to compliance by Tim Bridgett

Furlough on the frontline by CIPP policy and research team



44 Taking stock by Andrew Drake

Value for money by Henry Tapper


Liz Lay MSc FCIPPdip Carole Pearson MCIPP Katie Sharpe ACIPPdip

Cliff Vidgeon BA (Hons) FCIPP CMA ACIS Clare Warrington MSc FCIPPdip AFHEA

Status, deductions, dismissal by Nicola Mullineux

Job retention bonus – the key facts by Danny Done

Useful contacts



Membership 0121 712 1073 Education 0121 712 1023 Training 0121 712 1063 Events 0121 712 1013 Marketing and sales 0121 712 1033 General enquiries 0121 712 1000

The opportunity in crisis by Jaspal Randhawa-Wayte

The future of payroll by Karen Thomson


01 Editor’s comment, and

23 Compliance 36 Industry news 37 Movers and shakers 39 Reward 40 Pay ondemand roundtable (part 2) 50 The future of payroll report 56 Crossword Additional online content 08 National forums report 42 Are donated prizes taxable? (USA) 43 Pension contributions

Chair’s andCEO’smessage Events, news and developments

04 Events horizon 05 CIPPupdate 07 My CIPP @CIPP_UK

Being payroll, Policy hub: On your behalf, Advisory

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 2020. The Chartered Institute of Payroll Professionals, CIPP, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 Fax 0121 712 1001 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.

16 COVID-19News 17 We’ve got mail 17 Personal development Diary of a student, CPD 22 Payroll news

Full issue including additional online content available at


| Professional in Payroll, Pensions and Reward |

Issue 63 | September 2020

Events Horizon Full details of events and training courses can be found at or you can email for more information.

National Payroll WeekConference and Exhibition

CIPP and ATT hot topic event 50% off for all members

19 November | Online

10 September 2020 | Online

To view the programme and book your place please visit or email us at .

This invaluable conference is your opportunity to learn about the latest legislative changes, network with colleagues and exhibitors, and is the perfect chance to ask the CIPP policy and research team any burning questions that you may have relating to payroll. We have created a fantastic and engaging programme, ensuring that we deliver a truly virtual conference.

Join the CIPP and the Association of Accounting Technicians (AAT) at this half-day virtual workshop and learn more about the forthcoming changes in legislation affecting payroll, whether in practice or business. The online workshop also provides an excellent opportunity for members to achieve their CPD and discuss their CPD objectives and requirements with a member of the CIPP team.

To view the programme and book your place, please visit or email us at

Training courses

All courses will be delivered in a virtual classroom environment using Adobe Connect. Contact us for more information or visit to see all available courses.


Date *


Virtual classroom - The course will be delivered over two half day sessions

Payroll update (50% off for members)


15-16 October

NEW COURSE – Calculating income tax

28-29 October 16-17 November 15-16 October 28-29 October 16-17 November 15-16 October 28-29 October 16-17 November 15-16 October 28-29 October 16-17 November

NEW COURSE – Calculating National Insurance contributions

Online – (Access is granted within two working day of payment)

NEW COURSE – Paying Statutory Maternity Pay

NEW COURSE – Paying Statutory Sick Pay

Virtual classroom

Holiday pay and leave

13 October

Virtual classroom

Termination payments

23 October

Please note, dates are subject to change. There are other training courses and dates available. Please visit .

Can’t find a date or subject to suit your needs? Let us know by visiting .

New dates and subjects may be added if there is enough interest.

| Professional in Payroll, Pensions and Reward | September 2020 | Issue 63 4

CIPP update

The CIPP events are coming to you THE CHARTERED Institute has recently announced transformation of our events to 100% digital this year and are excited to announce our revised programmes and content to our sponsors and delegates. We have been monitoring government advice related to the events industry, and given the scale of our events programme in the autumn we have made the decision to change our events from face-to-face to online for 2020. This includes the: ● National Payroll Week drinks reception ( ● National Payroll Week Conference and Exhibition (https://bit. ly/31nAkDi) ● Annual Conference and Exhibition ( ● Annual Excellence Awards ( Our 40th anniversary celebration event and Graduation Ceremony are being postponed and will run face-to-face during 2021. The National Payroll Week conference will take place online, on Thursday 10 September and is the perfect opportunity to take part in a truly virtual conference experience and a chance to network with others in your industry. The conference consists of motivational sessions, panel discussions and those all-important legislation updates. The event is open to both members and non-members of the CIPP. We hope to see you there and look forward to celebrating one of the most important weeks in the payroll industry. Our Annual Conference and Exhibition is the UK’s largest independent payroll conference and exhibition. We have created an amazing and engaging programme, filled with insightful CIPP celebrates 40 years AS THE world continues to be in varying stages of lockdown, and technology has been embraced more than ever before through the use of cloud storage and file sharing solutions and online networking tools such as MS Teams and Zoom (other platforms are available), it seems only fitting that during her researches into our history, Vickie Graham, CIPP’s business development director, came across information regarding the launch of our online qualifications. Vickie observes that “Now an integral part of a payroll professional’s career, the CIPP’s Payroll Technician Certificate was launched in 2011 – just nine years ago! This was the CIPP’s first online educational offering, and now attracts circa 700 students per year. “Since the launch of the Payroll Technician Certificate, it seems that much has changed with regards to online learning in terms of

speakers, as well as various networking opportunities and an online, immersive exhibition. At the end of the conference and exhibition, we will continue to host the Annual Excellence Awards, which this year, is free to attend. We look forward to seeing you there and helping us to celebrate those who have achieved excellence in the field within the last twelve months. Vickie Graham, CIPP’s business development director, said: “We have not made this decision lightly and have made some fundamental changes to these events, so we ensure we are delivering high quality, engaging, interactive and truly valuable online events, as opposed to just moving the face to face programmes online. “All our programmes can be viewed online and include legislative updates, motivational sessions, live roundtables and Q&A sessions as well as plenty of opportunities for networking and the ability to set up and take part in 1-2-1 meetings with other delegates and attendees.” If you have already booked to attend an event and have paid for your place, we will transfer your payment to the relevant 2021 event, whilst offering you the opportunity to attend the pre- booked 2020 online event free of charge. If you have not yet booked to attend one of these fantastic events, you can do so now at a reduced rate. Details can be found within our website events area ( html), including programmes, FAQs and pricing for each event. We would like to thank our sponsors and delegates for their support and look forward to welcoming you all to our online events this autumn. the technology and delivery. The CIPP invested in recruiting learning technologists who have been fundamental in the development of the creation of online learning elements within the Foundation Degree programme, much of which is now delivered and hosted via Moodle [an open-source learning platform]. “This year has seen the launch of four online, on-demand learning modules aimed at payroll practitioners who are new to the role and need a quick training session on the very basics of payroll. It has also led to the launch of virtual classrooms as a delivery mechanism. Whilst initially moving face-to-face content online, our training courses have now been adapted and developed for an engaging and interactive online learning experience.”

Congratulations to the newly accredited PAS organisation THE CIPP Payroll Assurance Scheme (PAS) is designed to test your payroll processes in relation to payroll processing, compliance and the people skills and development opportunities.

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.”

One of the most important elements is ensuring business continuity plans are in place and effective should they be required. Special congratulations to our most recently accredited organisation: ● North Yorkshire County Council Ken Pullar, CIPP chief executive officer, said: “Never has it

The Payroll Assurance Scheme is operating, with assessments currently taking place virtually. To find out how it can benefit your organisation, email


Issue 63 | September 2020

| Professional in Payroll, Pensions and Reward |



1 4 - 1 5 O c t o b e r 2 0 2 0

C O L L A B O R AT E / E D U C AT E / C E L E B R AT E

Our Annual Conference and Exhibition 2020 is taking place on 14–15 October and this time we are coming to you.

We have made the decision to transform our Annual Conference and Exhibition from physical to 100% digital this year and we’re excited to announce our revised programmes and content.

This decision has not been made lightly, and we have made some fundamental changes to the conference so that we still deliver high quality, engaging and valuable sessions. If you have already booked to attend these events, we have contacted you directly to inform you of what this means for you. HAVE YOU BOOKED YOUR PLACE YET? In light of this month’s theme ‘Compliance success’, we would like to highlight just a few of the reasons why attending the CIPP’s Annual Conference and Exhibition is the perfect opportunity for you and your staff to get some insightful training and education on current and upcoming legislation changes.


Educate yourself about the forthcoming changes to payroll and

pensions legislation, ensuring you remain compliant in your role Collaborate with like-minded individuals, hear from and ask questions of industry experts from a range of different backgrounds Speak to various organisations and exhibitors about how they can add value to your team or company through their unique services offered.

Managing change in turbulent times Danny Rice, manager UK payroll product management, Workday

This session is an overview of some of the latest trends impacting payroll from supporting front line workers, through to technology changes and how these can be harnessed to drive your payroll forward.

Managing change in turbulent times Dr Phil McCrea Mb Bch BAO MD MRCP (UK) FRCP (Glasg) MFOM MFOM (RCPI), chief

medical officer, BHSF This session will include: ● Recognising mental health issues ● Stress ● Supporting mental health in the workplace

Book your place online at or email

Thank you to our Annual Conference and Exhibition and Annual Excellence Awards sponsors




| Professional in Payroll, Pensions and Reward | September 2020 | Issue 63 6

Being payroll

Alison Ford MA (Hons) MCIPPdip MBCS, senior principal product manager, Oracle Corporation UK Ltd, discusses the benefits of being part of the CIPP

What first attracted you to membership of the CIPP? I’ve been a member since 2000. What first attracted me was when I was looking to get my professional qualification and having looked around the CIPP it appeared to offer a good option for the Diploma in Payroll Management. I could see it was an organisation that would support me through this qualification. Which benefits of CIPP membership appeal to you the most? I think there are a number of benefits and one of the main things I use is the Advisory Service which I find invaluable in terms of getting either input or a second opinion on something I am looking at. It’s so easy to get hold of them and get that advice. Also, I think it’s important to have the membership designation

after your name just to make a statement that you are a payroll professional. As people become more aware of the CIPP and just how big an organisation it is and exactly how much it does, then I like to show my membership of that. How has the CIPP helped you in your career? It’s given me the ability to develop my payroll knowledge by working through the payroll Diploma, giving me the support to carry on increasing my confidence and the professional recognition that I can prove to my customers that I have the knowledge. Tell me about a time where you have really benefited from your CIPP membership There have been times where, for example, I have been working on a new legislation development and sometimes it’s not easy to work out exactly what’s needed. The fact that the CIPP do all of their policy think tanks and give input to government consultations, I find that really helpful in giving me the knowledge to get to the point I need to be at. For someone who is thinking about joining as a member, what would your advice be to them and what they would gain? Well, I would say don’t hesitate. It is definitely really useful to be part of an organisation that gives you the support of many members. You have access to the services and huge amounts of important training. I would strongly recommend it. Why is it important to you that you are a member of the CIPP? From my own personal view, I like the feeling of belonging to an organisation and having the backup of people I can turn to if I ever need input on a problem. And again, I can demonstrate to others that I have that payroll knowledge, that is backed up with the qualification and the membership. n

If you would like to be part of the being payroll series, please email



| Professional in Payroll, Pensions and Reward |

Issue 63 | September 2020


CIPP National Forums 2020

Due to the pandemic and lockdown, this year’s series of National Forummeetings were delivered online via Adobe Connect

Dates and sponsors The National Forum meetings were delivered, as follows: 5 May – sponsor: Cintra HR & Payroll Services 13 May – sponsor: PayDashboard 19 May – sponsor: shared services forum uk 11 June 26 June – sponsor: ADP The speakers Nick Day , founder, JGA Recruitment Group Paul Gibbons MCIPPdip , chief operating officer, PayDashboard Mared Griffiths , associate, Eversheds Sutherland Stuart Hall MCIPPdip MA PGMdip , non- executive director, CIPP Sally Isaacs , legal director, Eversheds Sutherland Lizabeth Lay MSc FCIPPdip FHEA ACIPD , non-executive director, CIPP Jade Linton , HR business partner/associate director – employment, Thursfield Legal Limited Samantha Mann MAAT MCIPPdip , policy and research technical lead, CIPP Gemma Mullis ACIPP, policy and research officer, CIPP Lora Murphy ACIPP, policy and research officer, CIPP Jeff Phipps, managing director UK & Ireland, ADP Kirsty Rogers, partner – employment, DWF Katie Sharpe MCIPPdip, non-executive director, CIPP Carsten Staehr FCIPP, chief executive officer, Cintra HR & Payroll Services Jill Smith MCIPPdip, policy operations manager Cliff Vidgeon BA (Hons) CMA ACIS FCIPP, non-executive director, CIPP Clare Warrington MSc FCIPPdip AFHEA, non-executive director, CIPP

Introduction session Stuart Hall, Lizabeth Lay, Katie Sharpe, Cliff Vidgeon and Clare Warrington shared the role of opening and leading the Forum meetings and introducing the speakers and fielding attendees’ questions. Their introduction session included an update on a range of issues, covering: ● information about the CIPP, including an update about online resources. The CIPP’s coronavirus hub includes all relevant news items, links to guidance, FAQs and policy webcasts to keep members up to date ● reminder and request to members to update their address and preferences for receipt of Professional magazine ● notice that training courses have moved to virtual classroom delivery ● announcement of launch of the new BA programme – delivered online in conjunction with Lincoln University – which is available as a top-up qualification to those who have completed the Foundation Degree, or previously the Diploma, qualifications. Legislative update Samantha Mann, Gemma Mullis, Lora Murphy and Jill Smith delivered these sessions. The first of the two sessions focused exclusively on the pandemic’s impact, covering statutory sick pay (SSP) changes, and the introduction and evolution of the coronavirus job retention scheme, the self-employment income support scheme, and the effects on a wide range of other policies. The policies affected include: postponement of the off-payroll working reforms until 6 April 2021, suspension of gender pay gap reporting in 2019, easing of right to work checks, relaxation

of annual leave rules, time to pay arrangements; plus much more. The second session covered ‘business-as-usual’ issues, such as real-time class 1A National Insurance contributions, changes to the employment allowance, extension of rules for written statement of employment particulars, modifications to the rights of agency workers (e.g. entitlement to a key information document), creation of single enforcement body, student loans administration and reconciliation procedures, introduction of entitlement to statutory parental bereavement leave and pay, proposed reforms to SSP, national minimum wage amendments (e.g. calculation year), ongoing consultations (e.g. carer’s leave). Numerous attendees’ questions were responded to. Key payroll thought leadership Carsten Staehr delivered this session, which covered several issues comprising: how technology will change the payroll function, increased compliance requirements, lessons learned from the pandemic, and what the next generation of payroll professionals will look like. Cloud computing will become the norm, there will be increased integration along with instant payment revolution, more robotics and AI, voice recognition, growing use of chatbots, and recognition of the strategic importance of payroll data. Key attributes for the future payroll professional include: the ability to think strategically, a love for new technology, very agile attitude, top communicators, and legislation knowledge. In summary, the future is bright; payroll will become more influential than ever; and will move away from data processing to being a strategic function.

| Professional in Payroll, Pensions and Reward | September 2020 | Issue 63 8


Coronavirus and payroll – past, present and future

reduction in hard skills training as robots take over complex calculations will be offset by an increase in soft skills training as payroll leaders develop employee experience and leadership skills to manage the requirements of a modern workforce. Payroll management skills in data analytics, digital transformation, global payments, reporting and data strategy will need to evolve. Use the power of payroll to shape your organisation’s success Drawing on the findings from recent research of 32,442 workers around the world, conducted by ADP prior to the pandemic, Jeff Phipps covered career opportunities, flexible working, and money matters. The survey found that 95% of workers felt confident they could acquire the skills needed to succeed in the modern workplace, but trends like digitisation and automation led 33% to predict that their current role will not exist in five years’ time. With increasing skills shortages, HR teams have an opportunity to tap into the goodwill and ambition that exists within the workforce to ensure they’re prepared for the future. On flexible working, only one in five European employees say their organisation has a formal or written flexible working policy, and even fewer (22%) say they feel empowered to take advantage of such arrangements within their company. However, 60% of workers are looking for changes to their work schedule. As regards money matters, globally, just 40% of employees say they receive their salary on time, and one in four wouldn’t notice incorrect pay. In the UK, 52% want to be paid monthly, 27% say weekly, 6% fortnightly, and 9% twice-monthly. To keep ahead of the curve, employers should change the way they work,

empower talent, keep up with digital transformation, and unify HR, talent and payroll systems. Holiday pay In this session, Mared Griffiths, Sally Isaacs, Kirsty Rogers and Jade Linton covered amongst other things the following aspects and issues: ● the latest position on what holiday pay should include ● holiday pay reform ● furlough and holiday – how does it work in practice? ● brexit and the implications for the Working Time Regulations 1998. n “The national forum events are always a good way of keeping up to date with recent and forthcoming changes … a half day well spent.” Lesley Daniel, payroll manager, Applus UK Ltd

Wondering how payroll would have coped if the pandemic had happened in 2000, Paul Gibbons commented that then payroll teams were office-based, there was no remote working, over 90% of payslips were printed, webpage updates were outsourced and slow, and there was no social media! Ten years later, there was still no social media on the scene, but smartphones were emerging, there was some usage of laptops, 60% of payslips were printed, and home internet access was not guaranteed. Fast forwarding to 2020, Paul observed that for many the March payroll could not have been completed had there not already been a digital transformation in the business. Payroll can work from home if enabled by technology, but we cannot be complacent. We need to adapt our business continuity plans, address legacy systems, reduce queries from employees/ clients, and plan ahead to minimise future workload. Looking beyond 2020, momentum towards digital is clear, there will be more prevalent use of cloud-based solutions, and payroll must be better recognised and better remunerated. The future of payroll In this session, Nick Day discussed how the payroll industry is changing: and the effect on skills and opportunities. Automation and technology will not replace the payroll professional, but tasks within the traditional role will be. History tells us that technology creates more jobs than it replaces. Looking to future skills requirements, a reduction in administrative payroll professionals recruited will be offset by an increase in payroll analyst data experts specialising in analysing robotic process automation efficiency and accuracy. A

“Great technical knowledge that it would have taken hours to extract from the

various original sources” Kathy Bryce, BeGreener

“This was the first time I had attended the national forum…I found it to be excellent” Gail Russell, payroll manager, Fosters Funeral Directors “… the information from the different sources provided additional material which will assist with the day to day payroll activities…” Sharron Johnson, payroll manager, ISS Technical Services “I have gained confidence that what I have done in certain circumstances is correct. That I have a good source of information for the future months ahead.” Ruth Evans, payroll bureau manager, Old Mill LLP

The CIPP expresses thanks to the sponsors and hosts


| Professional in Payroll, Pensions and Reward |

Issue 63 | September 2020


Policy team update On your behalf

The CIPP’s policy and research teamprovides an update on developments

T he policy and research team has been even busier than usual over the past few months, keeping members up to date with the latest developments in government measures, particularly those associated with the coronavirus outbreak. It has been crucial for both the team and for payroll professionals to remember that despite the pandemic business-as- usual items still needed to be dealt with and addressed. Payrolls still had (and have) to be processed, and the correct treatment of elements of pay observed to ensure that the UK was (and is) paid both on time and accurately. This month’s activities have included those focusing on coronavirus, but a substantial amount of work has also been carried out that falls completely outside of this sphere, sitting more within the category of normal topics that payroll professionals are accustomed to. Draft new starter checklist The CIPP regularly attends meetings of the Collection of Student Loans Consultation Group. We were recently asked by this group to share a draft new starter checklist to our members, in order to collect feedback on it. The draft form incorporates

the option of a Scottish student loan plan type 4, which is being introduced from April 2021. Guidance associated with utilising new starter checklists will be updated by HM Revenue & Customs (HMRC) in due course to support employers when adding new employees to payroll systems. It is HMRC’s intention to provide the latest version of the new starter checklist to software developers in the autumn of 2020, before publishing on Gov.UK in February or March 2021, ready for use in April 2021. The CIPP published a couple of News Online articles to invite readers to provide their opinions on the draft new starter checklist. The majority of comments were positive but there was a common theme in respondents pointing out that the question that asks if an employee has a prior direct debit in place for their student loan could potentially cause confusion for anyone completing the form. The ‘Please note’ text would be better positioned at the top of the second page before question nine as this would prompt individuals completing the form to read it first. So, if not relevant/appropriate, they could head straight to the declaration and not be in the position of completing

what they think is relevant to them but then realising on reading the notes at the bottom of the page that they did not need to complete this information in the first place. (See image.) All comments and feedback received were passed on to the group, so thank you to anyone who sent their comments to the policy team.

Expat tax and NICs forum The CIPP sits on the Expat tax and NICs forum, which held a meeting on 11 June 2020 that was attended on our behalf by CIPP member Carol Mason. The

...option of a Scottish student loan plan type 4, which is being introduced from April 2021.

| Professional in Payroll, Pensions and Reward | September 2020 | Issue 63 10

*please see summary at for details.

Gain an understanding of the complex legislation surrounding payroll administration; alongside transferable skills including performance, time, project and operational management. The Foundation Degree in Pensions Administration and Management ensures an indepth understanding of the Local Government Pension Scheme (England andWales). Foundation Degree inPensions Administration and Management FoundationDegree in Payroll Management Join over 15,000 * qualified professionals

Policy hub

discussions centred on a variety of subjects, with the extension to various deadlines due to coronavirus being one of them. The deadline for Appendix 4 reports was extended to 31 July 2020; and due to posting issues the option to email Appendix 4 reports and Appendix 7A and 7B returns was made available. The deadline for Appendix 8 applications was also extended. If deadlines were missed, the advice was to refer to the reasonable excuse guidelines for missing some tax obligations. HMRC confirmed that where an employee is subject to social security in two locations, regulations regarding apportionment of income should eliminate double withholding in most scenarios. However, to avoid double withholding entirely, all countries’ agreements would need to be the same, which currently isn’t the case. ...alarming that only 34% of businesses are completely prepared for the

successfully through the Report Stage in the House of Commons, so the Bill has received Royal Assent, the policy and research team hosted a question on the CIPP’s News Online page. The question asked members how prepared they are for the reforms to be implemented from 6 April 2021. The answers were as follows: ● Ready for the off-payroll working reforms: 34% ● Not ready for the off-payroll working reforms: 17% ● Starting to prepare for the off-payroll working reforms: 17% ● Due to the outbreak of coronavirus, there will be no requirement to use off- payroll workers: 12% ● Hoping that the reforms will be delayed again: 10% ● Responding from the public sector, where the reforms have already been implemented: 10%. It seems alarming that only 34% of businesses are completely prepared for the upcoming changes, and that there are still individuals who are hoping that they will be delayed once again. It would be plausible to assume that many businesses were already ready for the reforms, due to the fact that it was only announced in March 2020 that they would be postponed due to the effects of coronavirus. Carer’s leave consultation The Department for Business, Energy and Industrial Strategy (BEIS) ran a consultation on the proposal to provide employees with a new entitlement to a week’s worth of unpaid leave in which to perform caring duties. The CIPP responded to the consultation, after hosting a survey which asked members for their views on the potential new right. The questions probed various issues, such as: which individuals employees should be able to take leave for, whether or not employees could self-certificate, and if there should be a qualifying period of employment which should be observed prior to the entitlement being granted. The full consultation response is available on the CIPP’s website. n If you have views or experiences on any aspect of the off-payroll working reforms, including your experience of using CEST, please contact Samantha Mann, policy and research technical lead to .

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There have been many queries submitted to HMRC about the statutory residence test, and all of them have been escalated to the technical team. Work has been carried out on a frequently-asked- questions document to help with the most common queries, but the message is still to continue to flag any additional issues directly with the expat team at HMRC. There has also been much discussion around the ‘S690’ and ‘S41ZA’, with HMRC dedicated to providing guidance on both. Sections 81555/81545 of the PAYE Manual have already been updated in relation to S690 and coronavirus. HMRC understands that the expat population is not always fully considered in relation to new schemes, and this is also true of the coronavirus job retention scheme (CJRS). Off-payroll working reforms In recognition of the fact that, on 1 July 2020, the off-payroll working clause and schedule within the Finance Bill passed

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| Professional in Payroll, Pensions and Reward |

Issue 63 | September 2020

*correct at time of publication


The CIPP's Advisory Service team provides answers to popular questions

Q: Can employers claim for notice pay through the coronavirus job retention scheme (CJRS)? A: Termination payments such as pay in lieu of notice, outstanding holiday or redundancy must be funded by the employer and cannot be claimed for through the CJRS. Q: An employee who is being furloughed has a student loan deduction. Can such deductions be taken from furlough pay? A: The employer would still calculate and make student loan deductions as normal from furlough pay. Q: Have the rules changed on cycle to work schemes where an employee can salary sacrifice even if this takes their earnings below the national minimum/ living wage (NMW/NLW)? A: The stance on salary sacrifice and NMW/NLW has not changed; therefore, you should continue to ensure the employee’s rate does not fall below the NMW/NLW.

benefits to participating workers, and the worker in practical terms suffers little or no detriment. “3.7.8 The intention of the direction is to ensure that historical liabilities are repaid to workers, whilst providing employers with an opportunity to ensure their practices going forward are compliant with the law. The circumstances in which the direction will apply are tightly limited to ensure the continued protection of workers. The full text of this direction is set out in the annex. In summary, the direction has broadly the following effect. If, following an HMRC investigation, the only reason minimum wage was underpaid was because the employer made a deduction from a worker’s pay/ enrolled them in a salary sacrifice scheme, with the worker’s consent, and the worker has received the correct good/benefit as a result of that deduction (e.g. childcare vouchers, savings club, season ticket etc), the employer will not face a penalty (or be named). This direction does not apply to deductions for items: in connection with employment (e.g. uniform), expenses or accommodation. Employers that have been convicted of NMW offences, been party to a labour market enforcement undertaking or order, or who have been issued a notice of underpayment in the past six years (unless for not more than £500, withdrawn or under appeal) will not benefit from this direction.” Q: A director who is on a separate payroll and pay as you earn (PAYE) scheme lives abroad and is not subject to class 1 National Insurance contributions (NICs). Will his earnings be used in the apprenticeship levy calculation? A: Because the earnings are not subject to class 1 NICs, they do not count towards the pay bill for the apprenticeship levy. Section 100 of the Finance Act 2016 prescribes what will count toward the

pay bill. So, the earnings of employees below age sixteen years, or employees not subject to UK NICs, payments such as benefits which are subject to class 1A NICs and employees working abroad whose earnings are not subject to UK secondary class 1 NICs do not count towards the pay bill. Q: If an employee has broadband at home and is required to work from home due to coronavirus would a payment made to them towards the cost of the provision of broadband be exempt from pay as you (PAYE) income tax and NICs? A: Where an employer reimburses an employee for their existing broadband provision the amount should be subject to PAYE and NICs via the payroll. Where there was no broadband in place and the employer paid for this it would be exempt, but this could only be used for business and minimal private use. Q: We have a PAYE settlement agreement (PSA) and we have not received a payslip confirming the amount we owe to HMRC for the 2019/20 tax year. How do we make the payment without it? A: You should still pay any tax and class 1B NICs which are due under the PSA by 22 October 2020 (or 19 October 2020 if paying by post) even if you have not received confirmation of your calculation or a payslip. When making payment quote your unique PSA customer account reference number, which is shown in the PSA confirmation letter. Do not use your PAYE Accounts Office reference to make payment, as all payments to this reference are allocated to the normal PAYE account, which will mean you continue to receive reminders for the PSA even though you have paid. If you do not have your PSA reference

In February 2020, HM Revenue & Customs (HMRC) made slight amendments to their enforcement

policy. The impact of these mean that if an employee had previously been paid below the NMW/NLW due to a salary sacrifice deduction, there would potentially be no fine issued or the employer publicly named and shamed, but only if the employer had rectified the error. The following extract can be found via this link: “3.7.7 A direction has been issued relating to cases where NMW underpayments have arisen as a consequence of certain employer deductions from pay. This direction addresses some specific instances where the design of a salary sacrifice or deduction scheme is associated with NMW underpayments, despite delivering

| Professional in Payroll, Pensions and Reward | September 2020 | Issue 63 12

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E - L E A R N I N G

Policy hub

This online course prepares those who have completed the CIPP’s Certificate in Pensions Administration and/or the Payroll Technician Certificate, or have at least two years’ experience, who wish to progress to a higher level of study; using evaluation of existing knowledge, additional support and team working guidance. INTERESTED IN HIGHER LEARNING BUT NEED EXTA HELP? FOUNDATION DEGREE ACCESS COURSE

Q: Please can you advise on the correct way in which the average weekly earnings (AWE) for statutory maternity pay should be calculated for an employee who was or had been furloughed? A: Where the normal AWE calculation is detrimentally affected because of the employee being furloughed, the AWE should be based on the income the person would have earned had they not been furloughed. Please refer to guidance found here: Q: Can the employer can claim anything back from HMRC, when paying the £6 a week allowance to employees who are for working from home due to COVID-19? A: The home working allowance is the amount specified in income tax law which employers can pay to their employees in certain circumstances without giving rise to an income tax or NICs liability. There is no provision for employers to get anything back from HMRC. Please see for guidance. Q: We have a new employee who prefers to go by a name different to that on their passport. Can we record their preferred name in our payroll, or do we have to use the ‘official’ name in their passport? A: HMRC will require the official full name to be reported in the full payment submission (FPS), enabling checks to be made to ensure that National Insurance numbers match with full names, dates of birth and addresses. However, most payroll software has additional data item fields for ‘known as’ names which employers may utilise in circumstances such as this. The ‘known as’ field is not reported to HMRC in the FPS. Q: We provide a company motorbike to an employee. Is this reported in the same way company cars are? A: No, it is not reported the same way as company cars, because a motorbike is classified under section 185(1) of the Road Traffic Act 1988 as a mechanically propelled vehicle with less than four wheels. However, it will be treated as an asset owned by the company provided to the employee instead. n

number or are unsure about the action to take, contact HMRC’s PSA team on 0300 322 7077. An employer missing timely payment may be subject to penalties. Q: An employee has asked if he can give up his bonus payment in exchange for a pension contribution. Are we allowed to do this as we want to ensure we remain compliant? A: Yes, an employee could sacrifice a bonus payment in exchange for a pension contribution by the employer. Section 307 of the Income Tax (Earnings and Pensions) Act 2003 provides that such a death or retirement benefit provision does not give rise to liability to income tax (https://bit. ly/32WLm4F). Although the pension contribution would not give rise to income tax it is advisable to ensure that the contribution does not take the employee over the annual pension allowance of £40,000 as a higher tax charge may arise on the excess. Q: A director left employment on 31 August 2019. It was discovered he had been underpaid and the underpayment was processed in September 2019. However, payroll calculated the class 1 NICs via the alternative method not on the annual earnings period as the payroll team insisted that the directorship had ended the payment after leaving should not be treated as earnings for a director. How should the class 1 NICs have been calculated? A: Regulation 8(3) of the Social Security (Contributory) Regulations 2001 says that a person who is a director at the start of a tax year has an annual earnings period for class 1 NICs purpose for the whole tax year even if the directorship ends during the tax year. This would also apply to any earnings received in a tax year after the directorship has ended. As the director was in post at the start of the tax year, the earnings received in the tax year, including any payment after leaving, would be subject to class 1 NICs calculated using the annual earnings period. However, if a director is appointed after the start of a tax year, the annual earnings period would still apply but would have to be apportioned by the actual number of weeks left in the tax year from and including the week of appointment.


For more information or to enrol: Visit: Email

Call: 0121 712 1023 Live chat with us @CIPP_UK


| Professional in Payroll, Pensions and Reward |

Issue 63 | September 2020

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