MY CIPP
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or order, or who have been issued a notice of underpayment in the past six years (unless for not more than £500, withdrawn or under appeal) will not benefit from this direction.”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: https://bit.ly/2Ep17Y3. “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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