Official publication of The Chartered Institute of Payroll Professionals
in Payroll, Pensions & Reward
Issue 57 February 2020
The future of payroll Industry tension
The human touch Change management
CEST – new improved The catch
CIPP update | Policy hub | Personal development
Off-payroll working (IR35) webinar Our off-payroll working webinar is well underway. The one-hour session hosted on Adobe Connect has been a huge success so far, so make sure you don’t miss out. The three main topics covered are:
● Off-payroll working ● IR35 legislation ● Employment intermediary’s legislation
Book online at cipp.org.uk/training , email email@example.com or call 0121 712 1000 for more information.
“Learn from yesterday, live for today, hope for tomorrow.” Albert Einstein (1879–1955) (http://bit.ly/2Trnqlq)
Happy New Year! The start of any new year is always a convenient moment to introduce change. Well, from this first issue of 2020 a few structural changes have been introduced to
A different kind of ‘new year’ looms large, but at the time of writing there are concerns over timeous implementation of related changes. It is to be hoped that the government announces the new earnings bands and thresholds of National Insurance contributions etc soon so that accurate calculations of pay occur from the start of tax year 2020/21. Unfortunately, some income tax changes are likely to occur later with unusual results – see page 21.
Professional magazine. The structural changes comprise four new sections – My CIPP, Compliance, Reward, and Technology – which are intended to better reflect your roles and membership. One effect is that articles on the issue’s feature topic might therefore be found throughout these new sections. But be assured that the quality and informational content of every issue of Professional will not be diminished.
Mike Nicholas MCIPP AMBCS (firstname.lastname@example.org) Editor
Welcome to a new decade for payroll and pension professionals. And welcome also to our two new board directors, Claire Warrington and Katie Sharpe. This issue features the topic of automation, and I thought it might be useful to reflect on my Chair’s message
and wow, what a revolution has followed. So, ask yourself to identify what processes are being completed today that may be appropriate to evaluate and review for justification of developing process automation to remove the manual steps currently in place. My week at the start of my career was consumed with pulling together all the details of any new starters and then adding them to files for preparing timecards and timesheets and then distributing those across the business via internal mail (remember that?). So many items may be reduced by holding a smart review to try and eradicate waste. With process review now a common feature of daily working practices, automation completed safely and securely, with adequate checks and controls, can be a real game-changer in freeing up precious time.
history to demystify how automation has helped us throughout the ages. I started my career in the days before computerised payroll systems. Each week a tin plate had to be pressed for any new starter to be added to the pile of already pressed plates, that had details of the employee including name, work number, tax code and National Insurance number. These tin plates would then be organised for a printing press to run carbonised sheets across them, to create the structure of the payslip – one copy for the wage office, one copy for the operational area and one to be added to the payslip. The detailed calculations were then built up by hand from the timesheet and recorded, all using tax tables and not a calculator in sight, until you had proven your numeracy. This may sound like an antiquated routine, but there was no quicker way until the dawn of computing –
Jason Davenport MCIPP MIoD (email@example.com) Chair, CIPP
So, another year done, and gone so fast, but in our industry we just carry on and it’s ‘more of the same’! CEO’s message After another very successful year for the CIPP led by the board of directors and the CIPP team, we continue to strive for being at the forefront of continually promoting payroll and
legislation wise on off-payroll working rules (‘IR35’) for the private sector being amended or reviewed? Hopefully we will know by the time this magazine goes to print. And as members you are continually updated by our policy and research team through our regularly updated online journal: Payroll: need to know, your guide to UK payroll legislation and reporting , an invaluable benefit of your membership. I extend a warm welcome to our two new board directors, Claire Warrington and Katie Sharpe. Their profiles and how they will represent you as members are on display at www.cipp.org.uk/CIPPteam . Thanks of course to the outgoing directors, Karen Thomson, Ian Whyteside and the past director Suzanne Gallagher – their service to you, the members, as well as the CIPP is highly appreciated. All that remains is to wish you all a successful and prosperous 2020.
pensions education, training and membership. As professionals we now face a year of ‘Brexit’ and what that may or may not bring to our business. We will ensure that we keep you updated on anything that may impact our industry. And this year we will be celebrating our 40th anniversary of payroll education, training and membership. With the Association of Payroll and Superannuation Administrators (APSA) initially opening the door to the public sector in 1980, followed by the British Payroll Managers Association (BPMA) doing the same for the private sector in 1985, we celebrate 40 years of ensuring we have a professional industry that has come along in leaps and bounds. At the time of writing the general election has produced a definitive result. So, in view of pre-election promises I wonder what awaits us
Ken Pullar FCIPP (firstname.lastname@example.org) Chief executive officer, CIPP
| Professional in Payroll, Pensions and Reward |
Issue 57 | February 2020
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at payrollpensionsandreward.org.uk
The future of payroll
by Chris Deeson
Should you look a gift horse in the mouth? by Susan Ball and Lee Knight
Bereavement leave and pay by Lora Murphy
HR change agents by Paul Burrin
Incidental expenses by Helen Hargreaves
CEST – new improved by John Harling
What lies ahead by Ian Neale
| Professional in Payroll, Pensions and Reward | February 2020 | Issue 57 2
Chief executive officer Ken Pullar FCIPP CIPP board of directors Jason Davenport MCIPP MIoD Stuart Hall MCIPPdip Ros Hendren MSc FCIPPdip CMgr FCMIdip FHEA Dianne Hoodless MSc ChFCIPP FHEA Editor Mike Nicholas 0121 712 1000 | email@example.com Advertising Jill Bonehill 0121 712 1033 | firstname.lastname@example.org Design James Bartlett and Nicole Davis email@example.com Printing Warwick Printing Company Ltd
Delivering election pledges on minimum wage rates by Danny Done
Impairment, covenant, behaviour by NicolaMullineux
The human touch by Joyce Maroney
Automation by Jerome Smail
Liz Lay MSc FCIPPdip Katie Sharpe ACIPPdip
Cliff Vidgeon BA (Hons) FCIPP CMA ACIS Clare Warrington MSc FCIPPdip AFHEA
Keeping up with the demand by Charles Knox
Skills and staff shortages by Jade Linton
Membership firstname.lastname@example.org 0121 712 1073 Education email@example.com 0121 712 1023 Training firstname.lastname@example.org 0121 712 1063 Events email@example.com 0121 712 1013 Marketing and sales firstname.lastname@example.org 0121 712 1033 General enquiries email@example.com 0121 712 1000
Technology to support change by Ross Tracey
Open finance by Henry Tapper
01 Editor’s comment, Chair’s andCEO’s messag e
18 Compliance 30 Reward news 31 Reward 36 Industry news 37 Technology
Events, news and developments
04 My CIPP
Being payroll, Getting to know…, On your behalf, Advisory
10 CIPP update 12 Personal development
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 retreival 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.
Diary of a student, My first time, A week in the life of…
Feature topic: Automation
16 Events horizon 17 Payroll news
Additional online content 26 CEST - c’est la vie 28 Extension of class 1A NICs
Issue 57 | February 2020
| Professional in Payroll, Pensions and Reward |
Olivia Dunham ChFCIPPdip, head of global payroll and employment tax, Cambridge University Press looks at the benefits of being part of the CIPP
Why did you become a member of the CIPP What attracted me to become a member was all the support that the CIPP give their members, and they are the voice of the members to the government and to HM Revenue & Customs. The Institute has raised the profile of the profession and given us the respect that we deserve. How has CIPP membership helped you in your career? It has helped by giving me the confidence to progress, and to do my job the best that I can from both a payroll administrator to a payroll manager. Tell us a time when you felt CIPP membership has helped your organisation That would be every time we contact the CIPP, especially the Advisory Service. We know that the information we are getting is going to be best practice and compliant, so it helps the organisation know that what we are doing is correct. It also gives support to the team knowing they have got the CIPP behind them. Tell us about the day you realised CIPP membership was a real value to you. So, that would be when I first found the CIPP existed, to be honest. I was looking for jobs and all the vacancies were requiring a CIPP qualification, so I went on to the website and had a look and found out all about it and knew at that point that it was something I needed for my career. For someone who is thinking about joining as a member, what would your advice be to them about what they can gain from joining? Membership of the CIPP gives you opportunities to network with like-minded professionals where you can talk about various issues you might be having and support each other – not just in the UK but globally as well.
Chartered HR professionals and now they see me at the same level as them – and that’s great.
Why was it important to you to become a Chartered member of the CIPP? It was and is important to me because of all of the hard work that I had put in but also its about raising the professional standing of the profession in the small world that I live in and its also helping me to gain respect from my employer.
If you would like to be part of the being payroll series, please email firstname.lastname@example.org
How did you feel when you got your Chartered membership? I was so proud. I have worked so hard and this is justifying all the hard work that I have done. My
family are also really proud, and they have heard about Chartered accountants and
BE PROFESSIONAL. BE EFFICIENT. BE UNITED. BE PASSIONATE. BE PAYROLL.
| Professional in Payroll, Pensions and Reward | February 2020 | Issue 57 4
Getting to know…
Newly elected CIPP board director ClareWarringtonMSc FCIPPdip AFHEA reveals her industry history, skills, pleasures and ambitions
I started in payroll at age sixteen working in the Youth Training Scheme for a large retail company. I worked my way up to managing the payroll, pension and human resources departments. After fourteen years I decided to get some experience in the public sector and moved to the National Health Service (NHS) as a payroll manager, and then went on to manage a large shared service centre for NHS customers. I now work at Gist an international logistics company heading up eight payrolls in the UK and Republic of Ireland. I have a very busy life always on the go but when I do get some free-time I love to go to the gym which helps me offset the busy social life I have, be that with family and friends or my wider payroll family. I’ve been a member of the CIPP for over nineteen years and began studying the Payroll Diploma in 2000. Later in 2011, I gained the MSc in Payroll and Business
Management. I’m a tutor for the Institute, teaching students on the Payroll Foundation Degree for more than seven years, and I regularly attend the CIPP’s annual conference and other CIPP events throughout the year. My new role as a CIPP board director means I can be part of a team to drive the payroll profession forward and ensure we are at the forefront of an ever-changing payroll world. It’s an honour to be able to represent my profession on the board. My passion for payroll and work-based learning is evident when I am teaching students or advising stakeholders, so this is a fantastic opportunity for me to be part of a brilliant team. I am honoured to have been voted in by our members and thank them for giving me this opportunity. It is a dream role to be part of a team at the rock face of payroll, helping change and shape the future. Looking ahead, I see many challenges
in 2020 and the possibility of changes to legislation in the payroll once Brexit has completed. I would like to focus on my induction to this new role and getting a better understanding of the challenges we face. To contribute to the Institute’s future strategy, I bring over thirty years of knowledge in payroll in both private and public sectors, and have experience with in-house, shared services and bureau payrolls. Furthermore, my experience as a tutor has given me the foundations of understanding some of the key strategies for CIPP by being part of the core delivery of training. The future for payroll, pensions and reward will focus on change, whether that is in technology, legislation or continuous improvement. Change brings challenges and as a profession we need to be ready to meet them. I am really focussed and looking forward to these challenges. n
CIPP 2019 Annual General Meeting The Institute’s AGM was held on 5 December 2019, in London. Minutes of the meeting include the following: Approval of the minutes from the last AGM – 4 December 2018 – Approved. Election of new board members – Jason Davenport, CIPP chair, thanked directors Suzanne Gallagher, Karen Thomson and Ian Whyteside who had all stood down (the latter after nominations procedures had completed). Clare Warrington and Katie Sharpe were elected to fill the two positions. Approval of accounts for year ending 30 June 2019 – Motion approved: for 403, against 5. Approval of re-appointment of Haines Watts as auditors – Motion approved: for 382, against 25. Any other relevant business – None Close – Jason extended thanks to the CIPP’s chief executive officer, senior management team, employees and tutors.
Issue 57 | February 2020
| Professional in Payroll, Pensions and Reward |
On your behalf
Policy team update
SamanthaMannMAATMCIPPdip, CIPP senior policy and research officer, provides an update on developments that will affect your work and role in the near future
The Queen’s Speech The second Queen’s Speech of 2019, delivered on 19 December, came with briefing notes that revealed and, in some instances, repeated the government’s plans for the coming months (and, in all probability, years). It was an opportunity for us to get a glimpse at the outcome of recent consultations. ● Employment (Allocation of Tips) Bill – Aimed at employers in Great Britain (England, Scotland and Wales) this clarified the outcome of recent consultation work. Repeating the government mantra to provide working conditions that are ‘fair and transparent’ the main elements of the Bill are to introduce: ❍ a legal obligation on employers: to pass on all tips, gratuities and service charges to workers without any deductions (other than income tax and National Insurance contributions (NICs)); and to distribute them in a fair and transparent manner where they have control or significant influence over the distribution ❍ the requirement for employers to follow a statutory code of practice when distributing tips. The code will set out the principles of fair and transparent distribution. (When the government say ‘without deductions’ this is not referring to employers’ obligation to deduct income tax and NICs where applicable.)
● Employment Bill – The Speech confirmed again that the government will take steps to make work fairer, introducing measures that will support those working hard. Following the consultation held in summer 2019, we now know that plans are afoot to create a single enforcement body, which, amongst other things, will strengthen workers’ ability to get redress for poor treatment. ...new laws will provide greater powers to tackle irresponsible management of private pension schemes Also repeated was the Chancellor’s earlier announcement of intentions to increase the national living wage to two- thirds of median hourly earnings and to lower the age threshold for those who qualify from 25 to 21 within the next five years. Further details will be included in the Budget. ● Pension Schemes Bill – This Bill aims to help people plan for the future, with measures brought forward to provide
simpler oversight of pensions savings. To protect people’s savings for later life, new laws will provide greater powers to tackle irresponsible management of private pension schemes. The ambitious aim of this Bill, as we know from the previous 2019 Speech, is to support pension saving in the 21st century. This Bill, which inevitably will impact the work of payroll significantly, will also bring forward a legislative framework for the introduction of the dashboard for pensions. Along with the enhanced powers planned for The Pensions Regulator it will be a foolhardy employer or pensions administrator who fails to keep up to date with these developments. Addressing the NPA anomaly The Conservative party’s manifesto for the 2019 general election stated that: “A number of workers, disproportionately women, who earn between £10,000 and £12,500 have been missing out on pension benefits because of a loophole affecting people with net pay pension schemes. We will conduct a comprehensive review to look at how to fix this issue.” The CIPP is amongst a group of leading pensions and tax experts – the Net Pay Action Group (NPAG) – calling on the government to act quickly to deliver this manifesto promise to fix an unfair tax flaw. This flaw means around 1,700,000
| Professional in Payroll, Pensions and Reward | February 2020 | Issue 57
low-income workers (mostly women) are being unfairly charged 25% more for their pensions as a result of the way their employer’s pension scheme operates. NPAG, which comprises pension providers, lawyers, tax specialists, payroll specialists, employers, consumer groups and policy experts, has warned that this issue threatens to damage public confidence in auto-enrolment, widen the gender pensions gap, and let down those who need to increase their retirement savings most. Many employer pension schemes provide the government-funded savings incentives (generally referred to as ‘tax relief’) through a system called relief at source (RAS), enabling employee members to get tax relief added to their pension fund automatically via HM Revenue & Customs (HMRC). However, some pension schemes operate the net pay arrangement (NPA) thereby giving tax relief on contributions through the payroll; which works well for most scheme members but not those who earn less than the £12,500 income tax personal threshold. This latter group neither receive tax relief on their contributions nor the amount paid into their RAS scheme by HMRC, and so are effectively worse-off when compared to higher earners in NPA schemes and those in RAS schemes. As a first step, the NPAG has called on the government to provide a firm timeline for its pledged review of the system and to commit to implementing a solution. It is urging the government to consider its proposed simple and comprehensive solution which requires HMRC to use the data it already collects via PAYE (pay as you earn) real time information to identify after the tax year end those who have contributed to a NPA scheme and have not earned enough to obtain the full tax relief on their pension contributions. HMRC could then inform the affected individuals of the amount via the P800 process, enabling either a payment (tax refund) or offsetting against other tax liability. (Those in self-assessment could claim relief via their annual tax return.) DLME call for evidence With so much consultation work with stakeholders grinding to a halt during the election purdah, it was always going to be interesting to see who would be first to get started again. Unsurprisingly
given the focus over recent years, the first out of the traps was a call for evidence from Matthew Taylor, director of labour market enforcement (DLME), to inform his strategy for 2020/21 (http://bit. ly/39sK8yQ). Taylor has also opened the bookings for his roundtable meetings. ...consider its proposed simple and comprehensive solution which requires HMRC to The focus for this year is to focus on four areas that are at high risk of low compliance: hand car washes, agriculture, social care, and construction. The consultation period ran from 16 December and closed on 24 January. Taylor will present the strategy to government by the end of March 2020. The consultation paper opens discussion about the risk of non- compliance in other sectors, particularly with a view to hearing about improvements that may have been made to the protection of workers’ rights. In conclusion, it also looks at the subject of future trends and emerging issues such as IR35/off-payroll reforms, umbrella and supply chain challenges and the growth of online apps for recruitment agencies. The CIPP policy team will feed into this work in due course, so watch this space (and News Online ) as we feedback our progress to you in future editions. Given the fundamental role that payroll has in delivering good compliance, your views and experiences have significantly impacted previous strategies of the DLME. We are confident they will continue to have similar effect in the future. BTA issues Early in 2019 we had been receiving anecdotal evidence from members, employers and tax professionals telling us that there was still much discontent with the accuracy and reliability of the HMRC’s Business Tax Account (BTA) or ‘dashboard’ use the data it already collects via PAYE...
as it is also referred to.
To comprehend the level of dissatisfaction of the results that the dashboard provides, we ran a poll on our website during May 2019, to which we received 300 responses. As you can see, 29% told us that in their experience the information on the dashboard was never accurate. When checking your PAYE for employers section of the BTA do you find that: Results are never accurate 29% Results are sometimes accurate 29% Accurate now I have established a regular pattern 11% I have never checked 17% I have given up checking 14% We passed the results to HMRC which took your comments on board. This resulted in HMRC extending an invitation to the policy team together with members to meet with them to discuss the accuracy and reliability of the PAYE for employers’ section. All who attended the meeting found it interesting and useful. Ahead of the meeting, members were asked to provide examples in which the BTA was providing incorrect information. However, it transpired that enhancements made to the BTA meant that many of the issues highlighted in the examples had already been resolved. There are, nonetheless, issues still to be resolved, one of which involves revocation of the employment allowance, which we hope HMRC will address before changes have effect in April 2020. We hope to bring you more information about the enhancements to the BTA in a future edition of Professional magazine but in the meantime please share with us your recent experiences of using the BTA by email to email@example.com . Have your say This article has focussed significantly on future legislative developments, all of which will be delivered with consultation, of varying measures. If you would like to be involved in any of the subjects, through survey responses and Think Tank roundtable attendance, or indeed you have a subject that you think we should be discussing, please email us at firstname.lastname@example.org . We look forward to hearing from you. n
Issue 57 | February 2020
| Professional in Payroll, Pensions and Reward |
Q: We have a client who is starting a payroll part way through the tax year and the payroll has two directors both earning above the monthly NICs thresholds. They will not hit the annual thresholds, but they will exceed the pro-rata annual threshold, so will they qualify for employment allowance? A: Firstly, the directors must be paid above the annual secondary threshold, £8,632 for tax year 2019/20, or pro rata if the directorship began after the start of the tax year. Guidance can be found here: http:// bit.ly/2QzCs4Z. If the directors' prorated earnings are over the prorated annual threshold, then yes, the company will be able to claim the employment allowance this tax year. Q: When does an employee’s maternity leave commence when there is a pregnancy related illness directly prior to the employee taking maternity leave (ML)? A: If the employee is absent from work because of a pregnancy related absence on or after the Sunday of the fourth week before the week the baby is due, her maternity pay period (MPP) will start on the day after the first complete day she is absent from work for that reason. Useful guidance can be found at the following links: http://bit.ly/2PCtDsg; http://bit. ly/38PV7SZ. “ Statutory Maternity Pay (SMP): general information - pregnancy related absence – If a woman is absent from work due to her pregnancy on or before the start of the fourth week before the week the baby is due the MPP starts on the day after the first complete day of absence after the start of the fourth week. She may receive SSP [statutory sick pay] if appropriate right up to and including the day before her MPP starts. If a woman becomes sick for a reason unconnected with her pregnancy, she can receive SSP right up to the date she wants her MPP to start or the baby is born, subject to the normal rules. If an employer is not sure whether an employee’s absence is pregnancy-related or the employee does not agree with their decision on when the MPP should start, HMRC can arrange for them to be given advice from Medical Services. There is a period, spanning the week in which the baby is born, for which SSP is not payable…known as the disqualifying period.”
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m. to 4.30p.m. on Fridays * . Call 0121 712 1099 , email email@example.com or visit cipp.org.uk to live chat.
*please see summary at cippmembership.org.uk for details.
Q: The company is considering paying more than the advisory fuel rates for business mileage incurred by those with a car provided by reason of the employment (‘company car’). Can you please advise if we can pay a higher rate and will there be any tax and National Insurance (NI) implications for paying more? A: If you decide to pay in excess of these rates and you can prove that the fuel cost per mile is higher and the travel is solely for business, it is ok to pay more without tax or NI implications. If you are unable to demonstrate that the costs are higher, then the excess will be taxable and liable to NI contributions (NICs) on the payroll. The following advice can be found here: http://bit.ly/2M87Czk: “Reimburse employees for business travel in their company cars – If you pay a rate per mile for business travel no higher than the Advisory Fuel Rates, for the particular engine size and fuel type, HMRC will accept there’s no taxable profit and no Class 1A National Insurance to pay. You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates. If you pay rates that are higher than the advisory rates and cannot demonstrate the fuel cost per mile is higher, there’s no fuel benefit charge if the mileage payments are solely for miles of business travel. Instead, you’ll have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes.”
Q: Can you advise if the Alabaster ruling has been extended to the other types of statutory pay such as adoption pay? A: The Alabaster ruling only applies to statutory maternity pay (SMP), but the rules on backdated pay rises apply for statutory adoption leave. Please follow this link to see gov.uk guidance: http://bit. ly/2EvNPFJ. Q: Please can you advise which mileage rate we should be paying for electric cars? A: If your employee drives a company car and it is 100% electric you can pay 4p a mile, but if it is hybrid then you treat it as either petrol or diesel. If the car is a private car then the mileage rate is either 45p or 25p. Q: In the following situation would a cycle to work salary sacrifice scheme become taxable if it is not offered to everyone? For example, if we do not offer a bike to staff who are paid at national minimum wage. A: The scheme must be open to all in order for it to meet the rules set out by HM Revenue & Cust oms (HMRC) and to be exempt from tax, but the employer can include these types of employees by having a pool of bikes for them to use. So, this means they can be included in the scheme and, therefore, your cycle to work scheme can still be exempt. The guidance on cycle to work does cover element of details of how to include employees being paid at the minimum wage; please see:
● http://bit.ly/2EuqLY2 ● http://bit.ly/35B7X5f
| Professional in Payroll, Pensions and Reward | February 2020 | Issue 57
NATIONAL FORUMS Exclusive to CIPPmembers *
Q: We offer loans to employees that are within the £10,000 limit, which are for various things. If the loan is taken from their net pay will this affect the minimum wage? A: No, these deductions will not affect the national minimum/living wage. Guidance about what deductions can be made from a worker that do not reduce minimum wage pay is given below and can be found here: http://bit.ly/34xzzqB. “Deductions from pay and payments by workers that do not reduce minimum wage pay – The following deductions by you or payments by a worker will not reduce a worker’s pay for minimum wage purposes: ● deductions for income tax and [NICs] ● deductions from pay allowed under the worker’s contract which relate to specific misconduct or payment by the worker of a specific penalty ● deductions from pay or payment by the worker because of an advance of wages or on account of an advance under an agreement for a loan ● deductions from pay or payment by the worker for the purchase of shares, other securities or share option, or any share in a partnership ● deduction from pay or payment by the worker to recover an accidental overpay- ment of wages ● deductions from pay that are not for expenditure connected to the worker’s em-ployment or for your own use or benefit ● voluntary payments by the worker for the purchase of goods and services from you – for example payments for meals the worker has freely chosen to buy in the staff canteen (however, if you deduct money from the worker’s pay in these circumstances this will reduce minimum wage pay) accommodation if the charge for the accommodation is at or below a certain level.” Q: My previous employer paid my CIPP membership fee directly to the Institute which had no tax implications for me. If I were now to pay the fee myself and claim the amount back from my new employer, could the amount be reimbursed as a non-taxable and non- NICable expense? ● certain deductions from pay and payments by the worker for
A: You do not have to report anything to HMRC or pay tax and NICs where the member pays the CIPP directly and their employer either reimburses them or pays the CIPP directly. The criterion for the CIPP and other professional bodies is that the organisation has to be on HMRC’s list of approved professional bodies (‘List 3’). Q: When I am processing the deemed payment that falls under ‘off payroll working’ and collect and pay over the tax and NICs, should the deemed payment also be included for our apprenticeship levy? A: Yes, these deemed payments will affect the apprenticeship levy payments as specified in guidance below which can be found here: http://bit.ly/2m90A3a. “Your responsibilities as the fee-payer – When you receive the worker’s employ- ment status determination and the off- payroll working rules apply, you must: ● calculate the deemed direct payment to account for employment taxes and [NICs] associated with the contract ● deduct those taxes and employee [NICs] from the payment to a worker’s intermediary ● pay employer [NICs] ● report to HMRC through real time information the taxes and [NICs] deducted ● apply the apprenticeship levy and make any payments necessary. Employment allowance cannot be used against payments to deemed employees.” Q: We are moving offices and I have been asked what happens if we offer car parking spaces off-site to those employees permanently moved. The suggestion has been made that we have a pool of parking lots which we would use when the on-site car parking is full. Is this a taxable benefit in kind? Also, what if we ask them to salary sacrifice for the cost of the parking? A: An employer can provide a parking space near or close to the place of work to an employee or director, with no reporting requirement and is therefore not a benefit in kind. But if you decide to ask them to salary sacrifice for the cost of this car parking space this will fall under optional remuneration arrangements and will no longer fall under the exemption and will be a reportable benefit. See http://bit. ly/2PAA66U, and http://bit.ly/2Z46emu. n
The national forums are an excellent opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation. This event is an excellent networking opportunity with other CIPP members.
* This event is for fully paid associate, full, fellow and Chartered members based in the UK only.
For more information or to book your place: Visit: cipp.org.uk/events Email firstname.lastname@example.org
Call: 0121 712 1013 Live chat with us
| Professional in Payroll, Pensions and Reward |
Issue 57 | February 2020
National forums dates change DUE TO the budget being announced to take place on 11 March, we have made the decision to move all of the national forums dates. This is to ensure that we provide all attendees with the latest updates from the 2020 budget. Please see Events Horizon for details (page 16).
Celebrating 40 years of supporting payroll professionals THIS YEAR the CIPP shall be celebrating forty years of supporting payroll and pension professionals through membership and education services. In 1980, the Association of Superannuation and Payroll Administrators (APSA) was formed as a professional body for payroll and pension professionals working within the public sector. Five years later, in 1985, the British Payroll Managers Association (BPMA) was formed to support those working within the private sector; and the merger of these two organisations led to the formation of the Chartered
CIPP welcomes a new Chartered member FOLLOWING A successful Chartered Member panel which took place on 16 December, we are delighted to announce that Sarel Daysh is the latest member to achieve Chartered member status. As a Chartered Member, you are recognised within the industry as achieving the highest level of membership within our profession, committed to compliance and best practice in payroll and pensions administration and management. Chartered membership is a unique level of membership within the industry and is available to individuals meeting the eligibility criteria. Chartered membership is by application only. Email email@example.com should you wish to apply for Chartered membership. The next panel review will take place 4 February 2020. Institute of Payroll Professionals (CIPP) that you are a member of today. We shall acknowledge this anniversary throughout the year, with various events and communications, including a piece within each issue of the magazine culminating in the December 2020/January 2021 issue. Pictured is Vickie Graham, CIPP’s business development director, sorting through some of the CIPP archives to document and timeline our important milestones. If you were involved in the origins of the CIPP, or have important information about our heritage and history, please contact Vickie at firstname.lastname@example.org .
Newly accredited PAS organisations THE CIPP Payroll Assurance Scheme (PAS) is our flagship payroll audit solution, the gold standard for your processes and people and the prestigious award to covet in the payroll industry. It consists of two distinct elements: one will audit your payroll processes, and the other will audit the learning and development of the staff within the payroll function. Congratulations to our most recently accredited organisations: ● Midland Heart ● Moorepay Limited ● North Kesteven District Council
● Cornwall Payroll Limited ● Hobson’s C A Limited ● Equiniti ● BT Lancashire Services
Ken Pullar, CIPP chief executive officer, said: “We are thrilled that so many organisations have embarked on the journey to achieve this respected accreditation. It is imperative that organisations comply with government legislation and the Payroll Assurance Scheme is designed to help companies do just that.” Email email@example.com to find out how the PAS can benefit your organisation.
| Professional in Payroll, Pensions and Reward | February 2020 | Issue 57 10
LEAP INTO THE FUTURE OF PAYROLL WITH US
14-15 October 2020 Celtic Manor Resort, Wales
Join us at the largest payroll conference and exhibition in the UK for your opportunity to educate yourself, collaborate with peers and colleagues, and celebrate the best of the profession at our excellence awards.
E D U C A T E C O L L A B O R A T E C E L E B R A T E CIPP’S ANNUAL CONFERENCE AND EXHIBITION
NOMINATIONS OPENINGMARCH Email firstname.lastname@example.org to register for updates on category details
BOOKINGS OPENNOW Visit cipp.org.uk/ace for details and to book
* offer Valid until 31 March 2020
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Thank you to our Annual Conference and Exhibition and Annual Excellence Awards sponsors:
CIPHR A L L A B O U T P E O P L E
Gain an in-depth understanding of payroll, and the complex payroll legislation involved, alongside management skills including performance, time, project and operational management Foundation Degree inPayroll Management Join over 15,000 * qualified payroll professionals in the UK
Diary of a student…
Jean Rebello BHMS,MAAT,MCIPP Wages/pension administrator, Bifrangi UK Ltd
Why did you decide to study the CIPP’s Foundation Degree in Payroll Management? Payroll is a crucial part of any business. The deadlines, processes and procedures involved in payroll intrigued me, and I developed a passion for payroll, which is how I fell into it from my accounting background. I decided to do the CIPP course so I could educate myself and gain the skills required for it, especially now with the new changes like General Data Protection Regulation (GDPR) and Brexit. What have you gained from studying the qualification? I have gained incredible knowledge and understanding of payroll and developed confidence in the job I do. How has it helped you in your career and how you manage payroll? My employer has recognised that I am dedicated and passionate about payroll. I manage the payroll in a meticulous and organised way, planning in a methodical way, always ensuring contingency plans are in place. For someone who is thinking about studying for a CIPP qualification, what would your advice be to them? Studying CIPP is a big commitment and needs the support of your family and workplace. Keep your family informed of your exams and commitments, so you get the essential support. Try and attend all the module review days and tutorial as they are invaluable.
Try to keep in touch with a few in your tutor group to encourage each other when you need a gentle push. The tutors are there to support you, so always approach them if worried about something. The sense of achievement you feel when you walk across that stage in your cap and gown in front of family and friends is worth all that hard work – you will know it has paid off. For me, this was one of the proudest moments in my life. Studying towards a qualification alongside a full-time job is no easy feat. How did you cope with the pressure as, like a qualification, payroll is very deadline driven? Planning is key; when you receive your CIPP timetable with the dates for exams and assignments, speak with your employer to book leave during exams to ensure there is adequate cover in place. Remember to make time for yourself and take breaks in between. If you do not look after your wellbeing, you will not be able to give your all to your studies or your job. To be successful, try and learn methodically, take regular breaks, eat and sleep well. How important would you rate qualifications to the payroll profession? CIPP qualification shows an employer you are hardworking, driven, have a passion and are willing to dedicate your time to enhance your skills. It looks good on a curriculum vitae (CV) and gives you a sense of pride and confidence. n
Enrol now for spring visit cipp.org.uk/FDpayroll for full details
Delivered in conjunction with
For more information or to enrol: Visit: cipp.org.uk/study Email firstname.lastname@example.org
Call: 0121 712 1023 Live chat with us
| Professional in Payroll, Pensions and Reward | February 2020 | Issue 57 12
*correct at time of publication
A week in the life of
I am a self-employed payroll professional who has worked in our industry almost all my (very) long working life. I am a payroll consultant, a payroll and human resources trainer, a diploma tutor, a payroll bureau service provider, a conference speaker and a Payroll Assurance Scheme (PAS) assessor. No two weeks are the same as I currently work with seven clients on a regular basis and have several more ad hoc client relationships too. So, my first challenge was to decide which actual week to write about. At the time of writing, my last full week consisted of no work, eating copious amounts of chocolate, parading around my apartment in newly purchased pyjamas, and watching too much TV. No, I wasn’t unwell, it was just the Christmas festive period. So, I’ve chosen a different, and by contrast, much busier week a few weeks earlier. Monday Last night I travelled to London to deliver a very topical training course, IR35 – Intermediaries Legislation, which is my current favourite topic. There were fifteen very engaged delegates and a lot of tricky questions as the represented companies are clearly adversely affected by the changes in the private sector from April 2020. Thankfully, my commitment to preparing thoroughly enabled me to successfully answer everyone’s questions. The return train journey home was the opportunity to catch up on some emails. Tuesday An early start today as I head to Chester to carry out a PAS assessment on behalf of CIPP. This is another rewarding aspect of my work; getting to visit organisations and see how effectively their payrolls are produced, managed, audited and documented. Most payroll departments operate quite differently, Julie Northover ChFCIPPdip, PayPartner Payroll Services
giving me great insight into some unique and innovative approaches that have been adopted. Today’s organisation demonstrated that they had exceptional documented processes and I had no hesitation in recommending them for PAS accreditation. Wednesday I’d planned my week meticulously – not all weeks run this efficiently – and this morning I produced my report of yesterday’s PAS findings whilst the day’s events were still fresh in my mind. After lunch I drove to London for my second Chartered Members Dinner since obtaining CIPP’s Chartered membership status in August 2019. What a lovely way to end the day; eating fabulous food and spending quality time with fellow members, whom I have known for what seems like forever. Thursday Today my adrenalin was running in overdrive. I was attending, and speaking on IR35, at Reward Strategy’s annual autumn conference. Speaking at conferences such as this to my peers is probably the most stressful thing I do. Each year – this was my sixth – I ask myself why I risk the growth of more grey hairs from worrying about my sessions. But my feeling of euphoria (and relief) after each delivery reminds me exactly why I do it. I love my profession and the people who are in it. There is an unspoken bond and mutual understanding between payroll professionals that simply rivals any other. Those of you who know me, will agree that I am not exactly a party animal – having never drunk alcohol is probably my justification for this. Yet tonight was my second consecutive evening out.
It was the Reward Strategy’s awards evening and I was a VIP guest on account of my services as an independent judge for their awards. A great night was had by all and as always there were many worthy winners celebrating their successes into the early hours of the morning. After an amazing meal, excellent company on my table and proudly presenting two of the awards, I sloped off to my fabulous Hilton hotel bedroom to enjoy a lovely cuppa and the view of the Tate Modern from the window. Friday I arrived home from London mid-morning which gave me the rest of the day to catch up on emails, webinars and other reading material. I discipline myself to ensure I keep up to date with all payroll-related news wherever possible. That’s not as easy as it sounds, especially at this current time of so much uncertainty following endless contradictory government announcements following the election, our EU exit predicament, and prior to Budget 2020. I spent the evening preparing for a tutorial in the morning. I have an exceptional group of thirteen students who thankfully are making my work with them very easy as they are all so eager to learn. Their first assignments were the most impressive I have marked in the four years I have been a tutor. The weekend All my students were in high spirits on Saturday. It must have been the hand- made personalised chocolate-filled Christmas crackers I lovingly stuffed for them at 2am that same day. Nothing much to do on Sunday other than unwrapping those new ‘jamas! n
| Professional in Payroll, Pensions and Reward |
Issue 57 | February 2020
HR change agents
Paul Burrin, vice president, Sage People, discusses howHR can lead employee empowerment in the changingwork sphere
I t is recognised that the future workforce, across all regions and all industries, will look significantly different to the one of today. New forms of automation driven by advances in artificial intelligence (AI) and machine learning, as well as a highly diverse workforce, are bringing new employee expectations as part of different ways of working. Modern workstyles such as the growth of the contingent workforce and gig economy are also becoming increasingly popular. Yet, productivity and engagement remain stubbornly low. As said by Charles Darwin, “It is not the strongest, nor the most intelligent of the species that survives. It is the one that is the most adaptable to change.” Putting this into context of people management, it will be the companies that not only embrace change but empower their people to thrive as part of it, that come out on top. One change that cannot be ignored is the need for the adoption of digital skills in an increasingly digitalised world. A recent survey by Sage – We Power the Nation (http:// bit.ly/34BOgJh) – identified that 75% of businesses around the world are planning to invest in digital skills, showcasing that digital resources and training are high on the agenda of senior stakeholders.
Riding the tech wave The rise of new technologies and changing expectations of the workplace are core contributors to the required transformation. Increasing demands for flexible and remote work, advanced automation and people analytics have all become important topics of conversation, and action, amongst HR (People) professionals. As a result, these teams need the flexibility to support both traditional and new ways of working. Older, transactional HCM (human capital management) solutions may no longer be adequate, creating a need for new employee-centric applications. These opportunities for HR (and People) teams to get ahead are significant. Companies should be prepared to seize the opportunity and adapt as the shift to employee-centric organisations continues. Overall, HR (People) leaders have a responsiblility to become change agents in their organisations. Sage’s research suggests that organisations require a clear purpose and vision, should understand and adopt technology to support new ways of working, and be forward looking in addressing future skills gaps. What a great opportunity for HR (People) teams to lead from the front, be the face of change in their organisations and empower their people. n
Additionally, a dedicated people study by Sage – The changing face of HR (http:// bit.ly/2Me3a2e) – revealed that 82% of human resources (HR) leaders anticipate their role will be unrecognisable in ten years’ time, attributing the main source of change to the transition from HR to ‘People’, where organisations are much more agile and employee focused. This is thanks, in large part, to the ever-changing world of work and the associated digital skills shortage, requiring businesses and HR teams to rethink how they attract, manage, engage and retain talent. ...digital skills shortage, requiring businesses and HR teams to rethink how they attract, manage, engage and retain talent For companies that want to get ahead and win the war for top talent, there is a recognised need to place more emphasis on creating personalised candidate and employee experiences, and empowering employees through a more people-focused approach.
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