Official publication of The Chartered Institute of Payroll Professionals PROFESSI NAL Issue 69 April 2021 in Payroll, Pensions & Reward
George Powell FCIPP, founder (Obituary, pages 4 and 5)
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”In my opinion the complexities of wages etc. administration warrants the creation of a specialist organisation.” George Powell (1927–2021)
Editor’s comment
Since the pandemic began, several industry luminaries who have had a foundational impact on the profession have sadly died. This month, we report the death of George Powell, the person who inaugurated the first payroll professional body in
There are several articles this issue on the feature topic of ‘payroll’s practical role in workplace financial awareness’, which is quite wide in scope and implications. Personally, I think payroll has a growing role to play here.
the UK (perhaps in the world?). Surely, we can all comprehend his motivation and drive to achieve parity, respect and recognition for the work, contributions and responsibilities of payroll?
Mike Nicholas MCIPP (editor@cipp.org.uk) Editor
In the article ‘Meet the new chair’ (see pages 8, 9) you can read about my payroll career, my journey as to how I have come to be chair of the Institute, and how during my term the CIPP will continue leading the profession through Chair’s message
and communicate financial wellbeing initiatives, thereby extending its role in workplace financial awareness as part of the wider payroll, HR and employee well-being strategies. There are many ways employers can support the education of their employees in financial wellbeing. This can be through saving initiatives such as salary sacrifice, flexible benefits platforms, providing access to alternatives to high interest borrowing, savings through payroll, and signposting to charities that can offer free debt advice. As members, we are all ambassadors for the payroll profession and can help to continue to raise the profile. I look forward to speaking to you and being able to meet some of you face to face over the coming months. If you have any questions or simply wish to have a chat please do feel free to reach out to me at my email address below.
education, membership and recognition. I am looking forward with enthusiasm to continue the great work that Jason Davenport has done as chair. I extend my thanks to him for directing and supporting the strategic direction of the Institute for its members during his term. Focusing on the future of payroll and pensions we must embrace change. New technology is moving at a great pace and with pay on demand, pay going straight to debit cards, savings and pension schemes, financial wellbeing is increasingly being recognised as linking to mental wellbeing. With Covid-19 and more employees working from home, organisations are increasing their focus and reviewing their offerings to employees in this area. Whether within HR or finance, payroll is well-placed to educate employees, and support organisations to recommend, process,
Liz Lay MSc FCIPPdip FHEA ACIPD (liz.lay@cipp.org.uk) Chair, CIPP
It’s April, and once again tax year-end. Here’s hoping there are no glitches or reconciliation issues, and that everything goes smoothly for you all. As we go into the new year the postponed off-payroll working rules in the CEO’s message
With the Budget held on 3 March, time was very tight if any changes were announced that impacted the new year. However, we’ll ensure these are reflected in our payroll update course material, which is reviewed every seven days. I take this opportunity to extend a warm welcome to our new chair, Liz Lay, and to the two new board directors who were successfully elected at the AGM on 31 March. Their profiles and how they will represent you as members are on display on the CIPP website. Finally, best wishes to you all and for those able to avail themselves of the vaccine, as this starts to allow some normality in our work and personal lives (whatever these will end up looking like).
private sector commence. With many changes planned and no doubt forthcoming, this is the ideal time to keep on top of what’s happening in the payroll world with our payroll update course. Book your place on the next payroll update course to keep your knowledge current and ensure your business is compliant. Currently delivered online and just £192+VAT as part of your CIPP membership. I’ve often mentioned that the CIPP exists for the benefit of our members and is not answerable to shareholders and the like. Therefore, making a profit is not our key driver; our focus is on education, training and membership, so this online price ensures affordable but invaluable information is available to members.
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 69 | April 2021
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at professionalmag.co.uk
Contents
April 2021
THIS ISSUE’S FEATURE TOPIC PAYROLL’S PRACTICAL ROLE INWORKPLACE FINANCIAL AWARENESS
36 Workplace financial awareness
by Jerome Smail
Features
17
18
8
Meet the new CIPP chair By Liz Lay
Mental health by Jeff Phipps
Starting your own business by Martyn Cheney and Samantha Mann
22
28
30
In this together by Brendan Street
Budget 2021 by CIPP policy team
Wages, ages by Lora Murphy
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 2
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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 | editor@cipp.org.uk Advertising Vickie Graham 07775 564 352 | advertising@cipp.org.uk Design James Bartlett, Nicole Davis and Sam Parkes design@cipp.org.uk Printing Warwick Printing Company Ltd
CIS changes from April 2021 by Sudeep Ganguli
Happy new tax year by Lauren Handley
40
39
Agency workers, pregnancy discrimination, evidence by Nicola Mullineux
Providing pension information by Ian Neale
Liz Lay MSc FCIPPdip Carole Pearson MCIPP Katie Sharpe ACIPPdip
Cliff Vidgeon BA(Hons) CMA ACG ChFCIPP Clare Warrington MSc FCIPPdip AFHEA
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Useful contacts
Education education@cipp.org.uk 0121 712 1023 Events events@cipp.org.uk 0121 712 1013 General enquiries enquiries@cipp.org.uk 0121 712 1000 Marketing and sales marketing@cipp.org.uk 0121 712 1033 Membership membership@cipp.org.uk 0121 712 1073 Training training@cipp.org.uk
Rise and fall of the company pension by Henry Tapper
Applications for traineeship incentive by Danny Done
Regulars
1 7 8
35 Industry news 36 Reward 45 Wordsearch 50 Confessions of a payroll manager Additional online content 20 The key principals to earn employee trust 21 Tips formanaging remote teams
Editor’s comment, and Chair’s andCEO’smessage CIPPupdate Events, news and developments
0121 712 1063 cipp.org.uk @CIPP_UK
My CIPP Policy hub: On your behalf, Advisory; Spotlight on…
15 Movers and shakers 18 Personal development Starting your own business, BePayroll, Diary of a student
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 2021. The Chartered Institute of Payroll Professionals, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 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.
25 Payroll news 28 Compliance
Full issue including additional online content available at professionalmag.co.uk
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| Professional in Payroll, Pensions and Reward |
Issue 69 | April 2021
George Powell FCIPP
7 December 1927 – 16 February 2021
It is withmuch sadness that the Institute records the death of its founder. It was George Powell’s drive and vision that created the first professional body for the payroll industrymore than forty years ago. The culmination and extraordinary legacy of his ambitious initiative is the Chartered Institute of Payroll Professionals. Onemotivated person can bring about extraordinary change. Ken Pullar, CIPP chief executive officer, commented “Everyone involved in payroll owes him so much for standing up for the profession and realisingwhat a pivotal role it is within organisations.” We salute you, George!
A tribute by Gordon Cresswell FCIPP Given the right conditions it takes only a spark to ignite a fire, and fortunately for us in the payroll profession, George Powell’s letter to the Local Government Chronicle published in June 1980, was that spark which has resulted in today’s CIPP. George was angry at being treated as less worthy by his accountancy colleagues when his payroll system kept the workforce happy and provided all the statistics for the accountancy and personnel department (as human resources was called in those days) to do their jobs and take the glory. He stated quite clearly through this letter that in his opinion there should be a body representing payroll interests – and so the Association of Payroll and Superannuation Administrators was created; and the rest, as they say, is history. Whilst I was part of that early developmental thrust, I didn’t meet George at that time. He didn’t want to take part in the committee work and stayed firmly on the sidelines, keeping an eye on developments. George was an activist though, as he told me in 2017 when he spent a day in Goldfinger House to see in detail the results of his ideas. George was a personable man, instantly likeable by all who met him as he toured the CIPP office, and he kept us entertained over lunch with his payroll reminiscences. I drove him back to the station and we agreed to keep in touch, which we did by telephone calls every so often. ...in his opinion there should be a body representing payroll interests...
If there were a Payroll Hall of Fame, George would be its number one exhibit – and we must record his contribution in the annals of CIPP history. Visiting CIPP head office In May 2017, at the age of 89, George Powell accepted an invitation to visit the Chartered Institute’s office in Solihull. George’s visit was a perfect day, fittingly acknowledging the initiative he took that over time led to the formation of the CIPP. Interviewed for Professional magazine, George observed that “The merger of APSA with the IBPM [Institute of British Payroll Management] – public and private sectors – was brilliant,” adding that the “progress the industry and the CIPP has made is astounding. A great achievement.” Noting that he’d “witnessed so many changes in the industry with the introduction of technology and dedicated software, which is now a billion-pound industry globally”, George said he was “delighted to see how the CIPP has grown over the years and the level of investment in the future of the profession. “I attended a CIPP graduation ceremony a couple of years ago. All these people passing their exams was out of this world. “Payroll and pensions are enjoyable and far more interesting than other clerical jobs. I’ve encouraged people to do it.” George left his mark on colleagues at Goldfinger House, as the celebratory atmosphere surrounding his visit was uplifting. He said “This is one of the proudest days of my life. This splendid organisation gave me a day to remember.” Shortly after his visit George wrote a lovely letter of thanks to Ken Pullar and CIPP staff expressing his delight for a “perfect day”.
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 4
George’s payroll career In 1948, after leaving national service, George joined Liverpool Corporation salaries and wages section, which had over twenty payroll staff. He manually completed payslips and related how he had been strongly told off for making 4s and Xs look the same. George recalled that “fortunately, a colleague spotted an error that otherwise would have caused a bus driver to be paid £4 for a week’s work!” George worked on various Corporation costs centres looking after wages and accounting and some years later accepted the role of managing the wages and salaries section for the Merseyside Passenger Transport Executive.
Forming APSA George’s accounting colleagues used to steer clear of payroll, and there was little in the way of help for payroll. The only help was from the computer man when new government schemes were introduced, such as earnings-related National Insurance contributions in 1975. Wondering why there wasn’t something like an accountancy body for payroll, George wrote to the Local Government Chronicle (see letter 1), and eventually formation of the Association of Payroll and Superannuation Administrators (APSA) followed. Although his letter acted as a catalyst it was two people from Kensington and Chelsea who progressed formation of the UK’s first professional payroll body, as there was an established network in London which was important in getting the body up and running. The inaugural meeting of APSA occurred on Friday 10 October 1980, at the Town Hall, Kensington and Chelsea. Letter 2 is the standard invitation sent. You are cordially invited to attend the inaugural meeting of the Institute of Payroll and Superannuation Administrators (IPSA). The meeting will commence at 1.30 p.m. in Committee Room on Friday 10th October 1980 at: The Town Hall, Royal Borough of Kensington and Chelsea, Hornton Street, Kensington, London W.8. The Town Hall is only a few minutes walk from the underground at High Street, Kensington. The Agenda will be: 1. The formal creation of the Institute. 2. Appointment of Officers. 3. Appointment of Regional Officers. 4. Membership. 5. Publicity. 6. Proposed meeting of Officers with Director of IDS Ltd. 7. Training. 8. Recognition. 9. Any other business. Letter 2 Dear Sir,
...there was little in the way of help for payroll.
Letter 1 I would be grateful if you would bring this letter to the attention of your readers especially those responsible for the payment of salaries, wages and superannuation in their organisations. There is, in my opinion, a need for a new professional body to train, advise and increase the professional status of Salaries, Wages and Superannuation Officers. For some unknown reason officers responsible for the vital functions of pay and pensions have never had an organisation to cater for their professional needs. Professionally these functions are in a void somewhere between the accountancy and personnel management spheres of responsibility. In my opinion the complexities of wages etc. administration warrants the creation of a specialist organisation. During the last few years Wages etc. administration has acquired a new dimension of importance and the solving of problems associated with pay has become a rational problem. If any of your readers are interested in assisting in the creation of this new professional body or of giving moral support will they please write to me at my home address, [xxxxxxxxxxx], Liverpool, L13 6RT. George Powell Salaries & Wages Officer Merseyside P.T.E.
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| Professional in Payroll, Pensions and Reward |
Issue 69 | April 2021
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CIPP UPDATE
CIPP update
Chartered members THE CIPP is delighted to announce that the following six members have recently gained Chartered membership status. ● Cliff Vidgeon BA (Hons) CMA ACG ChFCIPP, Institute secretary and board director, CIPP; visiting research fellow and consultant, Aston University ● Kristina Shalamanova ChMCIPPdip, payroll manager, BlueCrest Capital Management (UK) LLP ● Lesley Daniel BA (Hons) ChFCIPP, payroll manager, Applus UK Ltd ● Sara Breese ChMCIPP, head of payroll, DHL Services Ltd ● Sophie Chapman ChMCIPPdip, head of payroll and pensions, University of East Anglia ● Victoria Pooley ChMCIPP MCIPD, head of reward, JD Sports Fashion Plc Congratulations to these new Chartered members, who we look forward to working with throughout the next year. A full list of Chartered Members can be found on the CIPP website: https://bit.ly/2OzBEQD. Chartered membership demonstrates the highest level of professional membership in the industry, recognising those individuals who have worked hard to raise the profile of payroll and their professional standing through education and continuing professional development. Chartered membership demonstrates to employers that you are committed to keeping up to date and raising the standards of best practice within the industry. Following the pilot launch of our new Chartered membership application process, applications for Chartered membership are temporarily closed while we make some exciting changes. If you are interested in being recognised as a Chartered member, email membership@cipp.org.uk to register your interest. Budget 2021 THE CIPP hopes that you are looking forward to a fresh start with the beginning of the new tax year and have absorbed the implications of this year’s Budget. A report can be found on page 28, but should you need to refresh your knowledge and remind yourself of the main points, remember to use our Budget 2021 hub which is available at https://www.cipp.org.uk/2021- budget-hub.html . The Budget hub contains the main highlights, news articles, features written by CIPP policy team officers Lora Murphy and Gemma Mullis, and a webcast reviewing the Budget and what it means for payroll professionals. Should members have any further questions or need more advice, then our Advisory Service – the ‘extra member’ of your payroll team – are only a phone call or email away. You can learn more about our Advisory Service team by reading our ‘Spotlight on’ feature on page 14, this month featuring payroll advisory officer Angela Adams.
Congratulations to the newly accredited PAS organisation THE CIPP’s Payroll Assurance
i
i
Scheme (PAS) is designed to test your payroll processes in relation to payroll processing, compliance and the people skills and development opportunities. One of the most important elements is ensuring business continuity plans are in place and effective should they be required. Given recent events, congratulations to all organisations that have achieved this accreditation and will have been able to put those plans into action. Special congratulations to our recently accredited organisation: ● Merryhill Accountancy Limited Ken Pullar, CIPP chief executive officer, said: “Never has it 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.” The Payroll Assurance Scheme is still operating, with assessments currently operating virtually. To find out how the Payroll Assurance Scheme can benefit your organisation, email compliance@cipp. org.uk. Payslip survey THANK YOU to all those who completed our payslip survey throughout March. The survey is open until mid April, so there’s still time to take part. The results from the survey will be analysed and a report created which will illustrate recent innovations and trends. The report will be released in the early summer. Payroll: need to know THE LATEST edition of the CIPP’s journal - Payroll: need to know – your guide to UK payroll legislation and reporting for 2020-21 – which was released in March, can be found here: https://bit.ly/2NhwpEo. Payroll factcard 2021/22 WITH THIS issue you will find our latest factcard containing useful tax facts and figures, meaning you’ll always have the latest information at your fingertips. Tax pack ASSOCIATE MEMBERS and above should receive their annual tax pack early May providing essential facts and figures. This pack comprises: CIPP’s annual Payroll Reference Book , desktop calendar, and a factpen.
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| Professional in Payroll, Pensions and Reward |
Issue 69 | April 2021
MY CIPP
Meet the new CIPP chair
Liz LayMSc FCIPPdip FHEAACIPD, CIPP chair, outlines her career, the qualifications, experience and skills she brings to the role, and her ambitions for the Institute, members and the profession
M y career began as an office clerk for a sheet metal engineering company in Leicester, with one of my tasks to process the weekly payroll manually. Payments were calculated and recorded using HMRC’s tables and Kalamazoo sheets. A cash breakdown was completed followed by a visit to the bank to collect the money, to then make up the brown cash pay packets to distribute. I moved then into finance, credit control and reconciliations until I moved to a truck sales company. The payroll administrator there went off sick, so, as I had processed payroll previously, I was used to provide cover on a regular basis. By then, payroll had progressed and was computerised; the payslips were printed in-house with the printer located at the furthest and lowest point of the building in a room with no windows. You couldn’t leave the payslips to print unattended because it was inevitable that they would mis-align and you would have to start again! Moving into a purely payroll role I grew with the company, becoming payroll manager, providing supervision and leadership, building on this by graduating with my Diploma in Payroll Management in 1997. From there my payroll career has been diverse: providing technical payroll advice to businesses, proof-reading payroll publications, writing payroll articles, being a member of an editorial board, working with businesses as a client account manager, delivering presentations, and
providing payroll training across the UK and in USA and Canada.
from the ground with my husband during a recession, but as my heart and passion was with payroll we accepted an offer to sell the thriving and successful business we’d built. I am now a payroll manager for a large supermarket. The role has enabled me to bring together all my knowledge and skills including technical, team building, leadership and strategy. With numerous projects on the go – centralisation, robotic process automation (RPA), and a new human resources system – thinking ahead and planning for the future are skills that support my role on the CIPP board. My family have always been supportive of my passion to learn and my desire to take on new challenges, which have provided good grounding for my two sons’ own careers. Attending the passing-out parade of my elder son when he joined the RAF as a mechanical engineer, and attending my younger son’s graduation when he was presented student of the year on completion of his plastering apprenticeship, were very proud moments. Having recently become a grandparent I look forward to supporting my granddaughter with her studies and helping her to achieve whatever her ambitions may be. Elected to join the CIPP board as a non-executive director three years ago, and then elected as vice chair at the beginning of 2020, I now find myself in the position of having to fill very big shoes in taking over as chair. Jason Davenport has done a
...my payroll career has been diverse...
I have been involved with the CIPP for nearly two decades as a payroll tutor, also working for them in various roles both employed and self-employed including being instrumental to the design, development and project management of the CIPP Payroll Quality Partnership, now encompassed in the Payroll Assurance Scheme. I passed the Preparing to Teach in the Lifelong Learning Sector for tutors, and the Certificate in Assessing Vocational Achievement to become an apprenticeship assessor for level three apprenticeships (prior to the introduction of the new framework). Being promoted to a role that focused on supervision, team management, leadership, and engaging in strategy, I graduated in the MSc in Payroll and Business Management in 2010 and gained the post graduate Certificate in Professional Development to become a tutor on the MSc programme. Always looking for a new challenge, I became a consultant working in the retail sector working with businesses to support the launch of a credit union. This coincided with setting up an estate agency
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 8
Policy hub
tremendous job during his tenure leading the board, which is vital to the direction, strategy and good health of the Institute. I plan to continue in his footsteps striving to ensure that the Institute continues to fulfill its mission of leading payroll and pension professionals through education, membership and recognition. During my term as chair my objective will be to work collaboratively and constructively with the board and the chief executive officer to review, establish and monitor the Institute’s strategy and strategic direction. We will continue to be the ‘go-to’ organisation for all payroll and pension professionals for which a requisite in performing their career will be that continuing professional development (CPD) is actively pursued and maintained. Payroll, pensions and reward never stand still; just when we question what else the profession can cope with along comes another new area with additional complexities and even more to learn
in order to protect employers from the multitude of penalties that they could incur if we don’t get it right. Within this, membership for the CIPP continues to be fundamental to the profession providing the latest news, keeping up to date with access to support and advice for queries and being able to build and be part of networks for specific sectors within industry. The pandemic has demonstrated this, challenging the profession to a point never seen before with a multitude of new rules and legislation being introduced at very little notice. The CIPP has been there for its members during these difficult times providing support and advice for an exceptionally high number of queries. The CIPP have been able to take qualifications and training online, listening to the needs of the membership and employers, working with schools, colleges, universities, HMRC and other organisations for the benefit of the profession. Over the last twelve months,
qualified members will have completed their CPD without having given it any additional thought or planning. Planning, however, is going to be important. During these challenging times where payroll has been identified as a critical function, we have been able to demonstrate to employers that we can effectively run payrolls whilst working from home, going paperless and introducing electronic procedures overnight. We now need to plan for whatever the new norm may be, which if it includes working from home will include the requirement to review data protection, mental wellbeing, health and safety with workplace assessments, communications, and much more. My messages to you are to keep supporting your Institute, help to raise the profile of the profession by being an ambassador for the profession and your Institute, and promote the CIPP both internally and externally in a positive and constructive way. I look forward to working with you, listening to your feedback and moving the Institute forward for the good of the payroll, pensions and reward profession. n
...help to raise the profile of the profession by being an ambassador for the profession and your Institute...
Updated from 2021-22 budget
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| Professional in Payroll, Pensions and Reward |
Issue 69 | April 2021
MY CIPP
On your behalf
Policy team update
The CIPP’s policy and research teamprovide an update on developments
T he CIPP policy team is constantly busy – which is just the way we like it – keeping the payroll profession updated as to any emerging news, attending forums to convey the views and feedback of the profession to various government departments, and in ensuring that the CIPP is the number one source of authoritative information that all payroll professionals go to. Though March was dominated by the 2021 Budget, and there was plenty of information for us to get our teeth into, there are, however, also a variety of other activities taking place or being planned. BeConnected: national forums Ordinarily, our policy team update articles do not discuss the broad range of in-house events that the policy team get involved with and frequently present on. However, it felt more important than ever to signpost members to the wealth of options available to them, to keep them both up to date and informed. Though payroll professionals are extremely busy, the CIPP’s BeConnected:
HMRC compliance checks In order to help taxpayers understand why HM Revenue & Customs (HMRC) performs compliance checks, several YouTube videos have been created, and made available online here: http://ow.ly/ azWo30rAeFs. These videos discuss the following topics: ● what to expect from a compliance check ● the purpose of compliance checks and how they work ● penalties – why penalties are charged and what can be done about them ● how to make an appeal against a decision of HMRC. To supplement these, there have been detailed updates to the HMRC compliance checks: help and support guidance page (http://ow.ly/sELR30rAeFS). HMRC conducts compliance checks for a variety of reasons, which can include but are not limited to: ● ensuring that the correct amount of tax is being paid at the correct intervals ● ensuring that the appropriate allowance and tax reliefs are being granted ● discouraging tax evasion ● ensuring that the tax system is operating fairly. The resounding message is that there may be something that triggers a check, but HMRC is entitled to check any tax return to ensure that it is completed both fully and accurately. Budget day, tax day A Budget article is included in this issue (see page 28), and an extended version is available on the CIPP’s website (http://ow.ly/9Nks30rA62P). Two key dates following the Budget: ● 11 March 2021, which was when the 2021 Finance Bill was published, and ● 23 March 2021, which has been named ‘tax day’. Historically many (but not all),
resumes and lockdown restrictions ease. The sessions provide an overview of legislative updates for payroll professionals to be aware of, but will also translate these updated, so that the impacts of those changes can be put into practice, and clearly demonstrate how they will affect work carried out by payroll teams. The forums will run periodically from the end of April up until the end of May 2021, and you can secure your place on one of the sessions here: http://ow.ly/z8zE30rA61Z. BeKnowledgeablewebinars The policy team has been collating and presenting several webinars over the course of the past few months. In January, the topic was off-payroll working; for February we covered the complexities of the national minimum wage; and in March we tackled the changes to holiday pay, discussing some of the most frequently occurring errors in those areas. (See page 28 for outline of these areas.) The webinars were extremely well-received, with delegate figures exceeding 800 in some cases. Following a brief hiatus, it is the intention that the webinars will resume in June. They will retain the same format of taking a topic that payroll professionals have to deal with regularly, reviewing the associated legislation, and subsequently exploring how the rules specifically impact those working within payroll teams. So, keep your eyes peeled for further information about additional BeKnowledgeable sessions in the future, to ensure that you don’t miss the opportunity to attend.
national forums, which are open to all current members, are the perfect
opportunity for you to familiarise yourselves with anything new or upcoming that you should be aware of, in a manageable amount of time. The sessions which would ordinarily run for half a day when held face to face have been condensed into two-hour slots each this year, due to being hosted online. The ambition is for the forums to return to the half-day format once normality
...national forums are the perfect opportunity for you to familiarise yourselves with anything new or upcoming that you should be aware of...
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 10
Policy hub
...a new employer class 1 National Insurance contributions (NICs) relief will be available for all eligible employees in freeport sites.
a tax site is designated. The initial proposal is that this will be in place until April 2026 at the earliest but could potentially be extended up until April 2031. A review of the relief will determine whether the policy is extended or not. The government intends to create eight new freeports in England, as follows: Liverpool City Region Freeport, Teesside Freeport, Humber Freeport, East Midlands Airport Freeport, Felixstowe and Harwich (Freeport East), Solent Freeport, Thames Freeport, and Plymouth and South Devon Freeport. Discussions are currently being held between the UK government and the devolved administrations in relation to the creation of freeports in Scotland, Wales and Northern Ireland. n
consultation exercises and calls for evidence are typically published on Budget day, but this year has been different. The rationale behind this departure from the usual practice is to ensure that sufficient consideration can be given to the documents, which may previously have been overshadowed by headline announcements made on Budget day. A series of consultations and calls for evidence were expected to be published on tax day by various government departments. It was envisaged that a significant number of the documents will focus on the future of the tax system, with particular emphasis placed on the government’s ten-year tax administration strategy (http://ow.ly/UVpG30rA64b). The policy team will provide information on the content and effect of the proposals via the usual communication channels. Also this year, ahead of the Budget
there did not appear to be the usual period of purdah, which is the time during which civil servants refrain from discussing any matters that may have relevance to the impending Budget. Employer NICs relief for freeport employments The 2021 Budget’s supporting documents (http://ow.ly/nH6e30rA69D) confirm that, subject to Parliamentary approval, a new employer class 1 National Insurance contributions (NICs) relief will be available for all eligible employees in freeport sites. These ports are areas of the UK that fall outside of the country’s customs territory, which means that goods can be manufactured, imported, and exported inside the zones without tariffs being applied. The employer NICs relief will commence from April 2022 or later when
BeConnected: National Forums Delivered by our policy officers, Gemma Mullis and Lora Murphy, these BeConnected: National Forums are the perfect way to understand how recent changes will affect your and your team’s day to day roles. We’ll keep you up to date on any changes and updates revealed in the March 2021 budget and also tell you how you’ll need to implement and process these changes.
Launch date 27 April
Now open to all current CIPP members.
Additional dates: 6 May, 12 May, 20 May, 26 May.
Visit cipp.org.uk/events/events-calendar , to book your place and find out more.
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@CIPP_UK
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| Professional in Payroll, Pensions and Reward |
Issue 69 | April 2021
MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q: Is a company still obligated to pay employee and employer pension contributions for an employee in a salary sacrifice pension scheme during a period of six months’ unpaid leave? A: Employees have statutory rights in relation to child-related and family leave which state that their rights to non-cash benefits must continue throughout leave. Unfortunately, there are no similar employment protections in relation to a period of unpaid leave. Any arrangements regarding this period should be guided by either your pension scheme rules or the employee’s contract of employment. Q: An employee has incurred accounting fees and it has been agreed that these will be repaid to him. If we were to reimburse these fees to the employee as expenses, would there be any risk of a benefit in kind arising? A: Compensating an employee for private expenses that do not count as business expenses should be treated as remuneration and processed through the payroll. For reference, HM Revenue & Customs (HMRC) provides guidance regarding the rules for private expenses: https://bit.ly/3diebhl. Q: Are there any rules during the Covid-19 pandemic that allows an employer to reimburse an employee for their childcare costs due to school closures? A: Unfortunately, the rules have not changed in relation to childcare. If this is not a workplace nursery within the criteria of HMRC’s guidance or is not the provision of a childcare voucher, then the reimbursement cannot be given free of tax and National Insurance contributions (NICs). If the employee pays for the childcare
and the employer reimburses these you would need to add the amounts to the employee’s earnings and operate PAYE (pay as you earn) income tax and class 1 NICs through the payroll. For reference, HMRC provides guidance on what is exempt for childcare: https:// bit.ly/37lCzdZ. Q: When calculating the national minimum wage (NMW), should overtime paid above the base rate be part of the calculation? A: The Department for Business, Energy & Industrial Strategy (BEIS) has issued guidance in relation to the effects of overtime on the NMW (see https://bit. ly/3jV69Ml). This states that the premium element of pay, which is the higher pay rate that exceeds the worker’s basic rate, does not count towards minimum wage pay: “To calculate the premium element where the same basic rate applies to all the work done by a worker in a pay reference period: ● Assume that all the hours worked in the period have been paid for at only the basic rate. ● Multiply the number of hours worked by the basic rate. ● Subtract the resulting total from the total of pay received for the hours worked. The remainder does not count towards minimum wage pay.” Q: A non-domiciled employee has been on the UK payroll for four years. They have no National Insurance number, but we have always processed her NICs using table letter A. The employee is based in Italy and believes she is exempt and should not be paying UK NICs. Please can you advise? A: Social security is usually paid in the
country in which the work is being carried out. If a worker is based in another country and is not carrying out any work in the UK, then they would not pay UK NICs as they would be liable for Italian social security. The employee would not need a UK National Insurance number if carrying out all their work in Italy. You would need to refund the overpaid NICs via earlier year updates for the previous year’s contributions. The employee would also need to ensure that they have paid the social security due in Italy over this period. Q: Can a company refund childcare vouchers to employees which reduced the previous year’s earnings? A: HMRC’s guidance states that childcare vouchers can be refunded to employees (or ex-employees) but PAYE tax and class 1 NICs must be applied prior to making the refund. The refund would be made in the form of a lump sum payment which would be subject to tax and class 1 NICs at the time the refund is given. However, it would be unwise to refund cash for vouchers unless there is a good reason for doing so. The employee cannot ask the employer to refund the childcare vouchers unless they are affected by a life-changing event. There is also a duty to the company and other employees who are in the salary sacrifice arrangement to protect them from invalidating the exemption from tax and NICs. By refunding the childcare vouchers without a good reason, an employer could change the nature of all the vouchers provided, from being non-cash vouchers which are not exchangeable for cash, to vouchers that can be exchanged for cash, goods, or services. This will result in the exemption from tax and NICs being
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 12
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removed and therefore, the savings gained would have to be repaid to HMRC. For reference, HMRC provide guidance
For reference, see guidance from HMRC (https://bit.ly/3dkaBDg) and ACAS (https://bit.ly/3ap9ErB), and regulation 4(b) of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 4(b) (https://bit.ly/2NaIE6e). These all state that commission and bonuses are part of the reporting requirements. Q: When an employer starts payrolling benefits from the new tax year, will there be a risk of double tax being collected following the submission of the final P11D returns from the previous tax year as well as tax being collected at source for the current year? A: It depends on the type of benefit. For benefits such as company car benefits, HMRC is collecting tax in real time through the tax code because it anticipates the ongoing provision following the submission of form P46 car. For ad hoc benefits, these will be reported after July and HMRC would adjust the tax code later. So, in theory, the employee’s tax code may change after July to collect any extra tax. Q: Are there any plans for HMRC to review gender reporting in PAYE real time information (RTI)? We have non- binary employees (meaning they do not experience gender exclusively as a male or female) who we are currently unable to log accurately in the full payment submission returns. A: The CIPP’s policy and research team kindly put this question to HMRC which has confirmed in their response that the issue with limited gender options is not in any way restricted to PAYE RTI but extends across HMRC and wider government. Gender recognition is the responsibility of the Government Equalities Office (GEO) and at present there are no known recommendations regarding gender recognition. Until such time as GEO make any decisions around this, which will require legislation, there will not be any changes within HMRC. n
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relating to childcare expenses and benefits: https://bit.ly/3u31VXR.
Q: When calculating the average weekly earnings (AWE) for statutory maternity pay (SMP), HMRC guidance states that we must include all earnings on which class 1 NICs are due or would be due if they were high enough. Our company has paid employees £26 per month for the home working allowance. Would we be correct to exclude these amounts from the calculation? A: The AWE are calculated on NICable pay. The work from home allowance is paid free from tax and NICs so, therefore, it would not be included in the calculation for SMP. Q: Can an employee ask to have their salary paid into their friend’s account? A: Employers should take the side of caution when receiving such requests from employees. There is potentially a money laundering issue, as an employer cannot check the validity of the friend’s bank account. An employer could also not ensure that the cash was being directed to the employee which may raise concerns regarding modern day slavery. It might be worth contacting ACAS (Advisory, Conciliation and Arbitration Service) regarding this issue. Also, if an error in the bank account occurred there would be nothing an employer could do to assist the employee. For example, if the friend had overdrawn their account the bank may not allow them to draw the cash for your employee. There could also be a refusal to provide the employee with the funds for their work. There are potentially many risks to the employee that it would be best practice not to allow a request such as this to be granted. There are other methods of paying the employee such as via cash or cheque. Q: Should we include commission payments to our employees in our gender pay gap reporting? A: Yes, commission and bonus would both be included in the calculation, but not overtime.
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| Professional in Payroll, Pensions and Reward |
Issue 69 | April 2021
MY CIPP
Spotlight on...
in November 2013. At that time, a role came up on the CIPP advisory team – and I have now been here for seven years. It feels like home. How do you feel when you have made a positive difference to someone through your advice? I feel a sense of achievement to be able to support the many thousands of payrollers who seem to be the invisible team that just gets the nation paid week after week, month after month. I get a great feeling of satisfaction helping members work through the complex payroll changes, especially those during 2020. Payroll is now fifty times more complex than when I first fell into it. My biggest sense of achievement since joining the advisory team has been answering more than 2,000 questions in a single month – mainly furlough related! Getting through 2020 on the advisory team, understanding all the complex guidance with the team and our members, has been a satisfying achievement. Tell us about a typical week as an advisory teammember? No two days are the same. It’s fast-paced, funny, interesting, hard, and confusing, yet keeping a sense of humour chatting to members as if they are work colleagues in your payroll team. The questions change, and emails can range from easy-to-answer to really complex; so hours of research are needed. Advisory team members need lots of patience, a good sense of humour, ability to work under pressure, to be ‘human’
and be understanding. It’s important to actually listen to the members to fully understand their questions and of course to give accurate and timely information and guidance. What’s the most interesting fact you have ever heard about payroll? Estoppel! There are three main points that are relevant when an employee is accidentally overpaid, as they can claim estoppel if the following principles apply: ● The employer must have done something which led the employee to believe the money was rightfully his (or hers). ● The employee must have ‘changed position’, which usually means that they have spent the money. ● The overpayment was not the employee’s fault. Where do you receive your updates, what techniques do you use to provide detailed accurate answers, and what processes do you use to keep up to date with general legislations? I refer to News Online , HMRC’s Employer Bulletin and Agent Update , and LinkedIn. When providing detailed answers I always provide a link to current guidance on GOV.UK, or to legislation, or to HMRC’s manuals. As a member of the advisory team, it’s all about sharing knowledge and updates as often as necessary, to be on top of all things payroll related. n
AngelaAdamsMCIPPdip CIPP’s payroll advisory officer
How did you start your payroll career? I fell into the role. I applied for a job but the application form I received said ‘payroll’ which was not what I sent for – I filled it in anyway. After my interview, I immediately got the job (age 20) and never looked back. Now I love everything about payroll, and especially the ‘number aspect’. I spent ten years at Solihull Metropolitan Borough Council as a payroll clerk, then as a deputy team leader and also team leader. Having become a mom I wanted to work closer to home, so decided to move jobs and worked at Birmingham City Council for nine years – again as a payroll officer, then as a deputy team leader and as a senior payroll officer. After this I moved areas and returned to Solihull Council as a human resources and payroll officer for a further five years, during which they encouraged me to complete my CIPP Foundation Degree. After 23 years in payroll, I graduated
| Professional in Payroll, Pensions and Reward | April 2021 | Issue 69 14
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