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Policy team update On your behalf
The CIPP’s policy and research teamprovides an update on developments
T he CIPP’s policy and research team have been kept busy, as always, attending virtual meetings and responding to consultations to feed into government policy and legislation that will affect the work and roles of payroll professionals. Concurrent with a welcome shift towards more normality in life, so too do we recognise more activity in the business- as-usual sphere. As opposed to discussion of coronavirus and the measures to help businesses and people through the pandemic, attention has turned to other areas of interest. Pensions tax relief The Treasury has published a call for evidence as it investigates the longstanding issue that affects workplace pension savers who earn below the standard income tax threshold. Where they are in a net pay arrangement (NPA) pension scheme, they do not receive in full the tax savings that other pension scheme members do. A relief at source (RAS) pension scheme will see the pension saver benefitting from a tax relief top up from HM Revenue & Customs (HMRC) paid to the pension saver’s scheme. In such schemes the deduction from pay is at 80% of the pension amount, with the government topping up the additional 20% direct to the scheme. This means that some employees are being penalised based on the pension scheme type that their employer chooses to operate. Research has revealed that this disadvantages more women than men. The CIPP is a member of the Net Pay Action Group (NPAG), alongside former pensions minister, baroness Ros Altmann. The NPAG has urged the government to address this issue.
The policy and research team will launch a survey to collect feedback from members prior to submitting our written response. In addition, the team plan to host a virtual roundtable think tank to allow members to enter into extended discussion with others from the payroll and pensions professions but also to liaise with the Treasury directly on the matter. Think tank roundtable invitations are issued to full, fellow and Chartered members. Readiness for a return to work In recognising that many businesses are bringing their employees back from working remotely and into their standard workplace, we wanted to assess how comfortable employees are with this transition. We frequently use ‘Quick Polls’ on the News Online page to gauge opinions of and reactions to hot topics that are affecting the payroll profession. Using this medium, responses to our question “How is your employer treating a return to the workplace?” were as follows: ● dependent on individual circumstances: 32% ● compulsory: 24% ● no intention to return to the workplace and work will be performed remotely: 18% ● optional: 13% ● nothing confirmed as yet: 13%. Tackling CIS abuse HMRC recently launched a consultation, which ran from 19 March 2020 to 28 August 2020, looking at the issue of tax loss from the operation of the construction industry scheme (CIS). It also provided details of the new powers that are to be given to HMRC enabling the department to correct CIS deduction amounts claimed
by sub-contractors in employer returns where it is believed that the off-set amounts are false. The consultation also explained some of the changes to CIS rules to clarify their meaning and discussed preliminary ideas relating to industry supply chains, in an attempt to assess whether work in this space would also help to prevent tax loss. To inform the written response which we submitted in August 2020, we ran a survey for all stakeholders of the payroll profession to gather views and opinions on the proposals. To gather more qualitative and in-depth responses we also hosted a virtual roundtable think tank, which was attended by officials from the HMRC CIS team, payroll professionals, software developers and tax professionals. This prompted thought-provoking and useful views that HMRC could take away from the meeting and supported many of the views expressed within the survey. Key findings of the research are as follows: ● proposed timing of corrections to be made is not long enough; fourteen days was deemed too short to enable any amendments or to gain evidence to back up what had been submitted ● majority agreed with the evidence requirements ● members raised concerns over how non-compliance will be notified ● questions around how HMRC would determine that a claim was not legitimate (i.e. what would instigate an investigation) ● software providers should be consulted to develop solutions as to how non- compliance is actioned and communicated ● further guidance on compliance should be issued ● survey results suggested subcontractors were happy with compliance checks already performed, and that further official testing would be detrimental. It is proposed that the new powers will be operational from April 2021. We will bring news of the outcome of the consultation when published. n
...penalised based on the pension scheme type that their employer chooses...
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| Professional in Payroll, Pensions and Reward |
Issue 64 | October 2020
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