On your behalf
Policy team update
The CIPP’s policy and research team provide an update on developments.
A s the July heatwave hit the UK, and many returned to their workplaces after the work- from-home restrictions were lifted, the CIPP policy team were kept busy attending various forums, responding to consultations, and collecting the views of you – the payroll professionals. A new CJRS forum In exciting news, HM Revenue & Customs (HMRC) has set up a brand-new coronavirus job retention scheme (CJRS) forum, which will enable free-flowing discussion between the CIPP policy team and a group of key stakeholders. CJRS has been a hot topic in HMRC’s Employer Payment Group since March 2020, and this new dedicated group continues to provide a forum to discuss the impact of CJRS as the scheme begins to wind down. HMRC has already issued letters to thousands of employers asking them to review their claims for errors. The CJRS forum will provide a focus on HMRC compliance activity and will work to ensure that employers have the necessary information and guidance to support their claims. As the impact of the CJRS will continue to be felt by organisations throughout the UK long after the scheme is closed, the CIPP will ensure the voice of our membership is represented and heard. Payrolling of benefits research The CIPP is working in conjunction with HMRC to establish how organisations report the taxable benefits they provide to employees. Employers can choose whether they process them in real time through their payroll software or to utilise P11D returns, which HMRC has recently
been referring to as the ‘legacy’ process. Some businesses will opt to use a combination of both processes. In order to explore this area, the CIPP’s ...the impact of the CJRS will continue to be felt by organisations throughout the UK long after the scheme is closed, the CIPP will ensure the voice of our membership is represented and heard. policy team published a survey which ran throughout June 2021. The questions asked primarily how benefits are reported and then delved into the reasons behind why organisations adopt the approach that they do. Unsurprisingly, the most popular response in relation to the process used was for P11D returns, with 41% of respondents confirming that they only use this method. Some 29% solely payroll benefits, and 30% use a combination of both methods. There are a few barriers for employers that don’t payroll benefits in real time. This could be because: ● their payroll software isn’t compatible with the process, or ● they are worried about the issue of employee double taxation in the first year
of payrolling benefits, or because agents cannot register to payroll benefits on behalf of their clients. Additionally, at the time of writing, not all benefits can be payrolled, as employer- provided accommodation and interest- free and low-interest loans cannot be processed in this way, and these benefits need to be included in a P11D return. Guidance also appears to be a stumbling block for payrolling benefits, as 56% of responses indicated that the guidance was only adequate, with others declaring they find it poor. There was confusion around the information that needs to be provided and the deadlines associated with payrolled benefits: ● 6% of organisations do not provide staff with statements or information relating to payrolled benefits, and ● 26% of respondents were unaware of the different deadlines that need to be observed based on whether an organisation is providing P11D returns or payrolling benefits. Encouragingly, 97% of those who confirmed that they payroll benefits would recommend it. It appears that the issue is with encouraging businesses to implement payrolling benefits in the first instance, but once actioned it is an effective way of reporting taxable benefits. How the CJRS impacted your team and organisation The CIPP policy team ran a series of interviews throughout July and August with individuals and payroll teams to discuss their experience of the CJRS. Conversations of this nature are crucial in ensuring the CIPP remain close to the current issues that payroll teams are tackling. These activities ensure that the
| Professional in Payroll, Pensions and Reward | September 2021 | Issue 73 8
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