Official publication of The Chartered Institute of Payroll Professionals
in Payroll, Pensions & Reward
Issue 46 December 2018 / January 2019
Social media in payroll and pensions
Five minutes with Past
‘Tis the season Present
Meet the new CIPP chair Future
CIPP update | Policy hub | Career development
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“Every new beginning comes from some other beginning’s end.” Lucius (Marcus) Annaeus Seneca (54BC–29AD) (https://bit.ly/2S7miiZ)
Editor’s comment
Social media surely deserves being described as phenomenal. Being open
to all those at the CIPP and beyond, without whose support and input, production of the magazine would be impossible. Particularly meriting of my appreciation are: Nicole Davis and James Bartlett of the design team for consistently delivering high-quality issues of the magazine and supplements; the policy team for steadfastly satisfying my never-ending demand for first-class, topical and informative articles; and the marketing team for ensuring timely delivery of regular in-house content and willingly chasing overdue contributions. I wish you all a great festive season.
for almost everyone to contribute makes the medium of the Internet fundamentally different to, say, radio and television for communicating with colleagues, clients, customers, friends. I hope you find the articles on pp38–42 insightful, informative and helpful. Much of the content in this issue discusses the past, the present and the future, reflecting the time of year as well as the drivers and activities of our profession. Don’t miss the interview with the incoming new CIPP chair (p5), the review of developments by the CIPP’s CEO (pp10–11), and the Budget report (pp18–20). With the end of this year drawing to a close and another year about to begin, it’s the appropriate time for me to extend thanks
Mike Nicholas MCIPP AMBCS Editor
I can’t believe that the time has come already for me to chair my final board meeting of my ten-year tenure this week. I wanted to use my last message here, to thank everyone who has supported the CIPP Chair’s message
and our qualifications are currently going through a major review to ensure they are fit for purpose in our ever-changing industry. Everything the CIPP does, is done for the benefit of our members, and if we can say that members have all continued to learn and develop and ensure they are adequately trained and have all the skills and knowledge they need to do their job effectively, then we are doing what we set out to do. So, from next month, you will be hearing from your new chair, Jason Davenport, who will bring his own style of leadership to the Institute. I can say confidently that the CIPP is in safe hands and is set to continue to develop and grow further over the next ten years. Thank you all for your support not only for me personally, but more importantly for the CIPP.
over the past ten years whether as a member, customer, student, trainer, supplier, tutor, board member or employee. The Institute has changed quite a bit over this time, including a couple of name changes; gaining Chartered status; the introduction of Chartered members, of which there are now over twenty; we’ve got our own building; and membership is continuing to increase. The CIPP has gained incredible respect and stature over those years in government circles where our teams work hard to put the voice of payroll professionals in the UK over to the government bodies that make all the decisions. We’ve also had some incredible events that get better every year including our Annual Conference and Exhibition and our graduation ceremonies, and of course our national forums. We have continued to increase our member benefits
Eira Hammond ChFCIPPdip Chair, CIPP
Certainly, a sure sign of winter, that at the time of writing this, ice was being scraped off the car this morning prior to travelling to work. Surely not two bad winters in a row? A moment of reflection on what this year has CEO’s message
graduation ceremony held at the Symphony Hall in Birmingham in November. A highly enjoyable day for family and friends who shared in the celebrations of all those who are worthy holders of a qualification that represents an industry benchmark. They can all be very proud of their outstanding achievement. We also celebrated the first-year anniversary of Chartered membership. Congratulations to those successful applicants who have made a real step forward in our industry. Finally, on behalf of all the staff and board here at CIPP, I wish you all a well-deserved break over the Christmas and new year period. May it be spent with family, friends and loved ones.
delivered to you, our members. Once again, our award-winning Annual Conference and Excellence Awards at the Hilton Birmingham Metropole concluded our year in some style! The number of compliments received were plentiful. I know personally that the exhibitors, sponsors, members, attendees and delegates felt we’d presented our industry in a wholly professional and enjoyable manner. It’s always great to reward excellence in our industry and Alistair McGowan made an excellent speaker and host ensuring excellence was duly rewarded. An event I thoroughly enjoy, and that showcases the success and hard work of qualified payroll and pension professionals, was our
Ken Pullar FCIPP Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 46 | December 2018 / January 2019
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at payrollpensionsandreward.org.uk
Contents
December 2018 / January 2019
38
Social media in payroll and pensions
Jerome Smail on how to embrace it
Features
18
21
13
Budget 2018 CIPP’s policy team outline the key announcements
EQ v IQ Samantha Caine weighs up the importance
A pay day every day Neil Tonks discusses pay-on-demand and the implications
24
26
22
Employment taxes: penalties Justine Riccomini discusses sanctions on employers
PENP or PERP? Duncan Groves explains unintended consequences
‘Tis the season Samantha Mann revels in the spirit
| Professional in Payroll, Pensions and Reward | December 2018 / January 2019 | Issue 46 2
Vicarious liability, redundancy, TUPE Nicola Mullineux outlines decisions 34
Big challenges ahead Clare Temprell shares key challenges 32 Ethnicity pay gap Danny Done discusses proposed reporting 36 Making social media work for you Julie Lock explains and provides guidance 42
Editor Mike Nicholas 01273 412 836 | editor@cipp.org.uk Advertising Jill Bonehill 0121 712 1033 | advertising@cipp.org.uk Design James Bartlett and Nicole Davis design@cipp.org.uk Printing Warwick Printing Company Ltd
41
What’s not to like? Liam Grime and Emma O’Leary on implications for employers
Chief executive officer Ken Pullar FCIPP CIPP board of directors
46
Jason Davenport MCIPP Suzanne Gallagher MCIPP Stuart Hall MCIPPdip Eira Hammond ChFCIPPdip Ros Hendren MSc FCIPP, Mgr, FCMIdip, FHEA Lizabeth Lay MSc FCIPPdip Karen Thomson MSc ChFCIPP, FHEA Cliff Vidgeon FCIPP Ian Whyteside MCIPP, FMAAT, ATT
Making pensions less scary Henry Tapper on what can be done
Default DC pension funds Steve Butler comments on performance implications 47
Useful contacts Membership membership@cipp.org.uk 0121 712 1073 Education education@cipp.org.uk 0121 712 1023 Training admin@cipp.org.uk 0121 712 1063 Events events@cipp.org.uk 0121 712 1013 Marketing and sales marketing@cipp.org.uk 0121 712 1033 General enquiries
Regulars
01 Editor’s comment, Chair’s and CEO’s message 04 CIPP update 05 Membership insight Meet the new CIPP chair, On your behalf, Advisory, Five minutes with 12 Movers and shakers 13 Career development Diary of a student, CPD
33 Reward news 34 Reward insight 38 Feature articles
Events, news and developments
Social media in payroll and pension
info@cipp.org.uk 0121 712 1000
43 Industry news 44 Pension news 45 Pension insight 54 Confessions of a payroll manager
cipp.org.uk @CIPP_UK
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 2018. 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.
17 Payroll news 18 Payroll insight
Additional online content 28 UC and earnings patterns
45 Why women are worse off in retirement 48 When should US employers reject form W-4?
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| Professional in Payroll, Pensions and Reward |
Issue 46 | December 2018 / January 2019
CIPP update
Living wage employer
PAS accredited organisations BUPA PAYROLL Services, Tameside MBC and ePayMe have all successfully achieved the prestigious Payroll Assurance Scheme (PAS) accreditation. Ken Pullar, CIPP chief executive
THE CIPP is delighted to have been accredited as a living wage employer, which means every member of staff working for the CIPP will earn a real living wage.
The real living wage, which is higher than the statutory national living wage, is an independently calculated hourly rate of pay based on the actual cost of living. It is calculated annually and announced by the Living Wage Foundation (www. livingwage.org.uk) as part of Living Wage Week. The real living wage for 2018–19 is £9.00 per hour in the UK, with a higher rate of £10.55 per hour for London, reflecting the higher costs of living in the capital. Over 4,700 organisations, including the CIPP, voluntarily choose to pay the real living wage because we believe that a hard day’s work deserves a fair day’s pay. Salary sacrifice / OpRA course delivery THE CIPP’S popular salary sacrifice and other optional remuneration arrangements (OpRA) course has been developed and designed following member feedback to incorporate blended learning. The CIPP’s blended learning courses integrate traditional classroom-based learning methods with online learning through the use of digital technology. They are divided into three parts: ● Part one: online activities comprising reading (with a narrated version), examples and knowledge tests, and consideration of current practices in the delegate’s own organisations. ● Part two: trainer-led classroom session reviewing part one content, and examining the full course content in detail with examples and exercises, including the use of digital tools where appropriate. ● Part three: online activities including further reading (with an audio version), exercises and knowledge tests. The CIPP’s online activities are delivered through a Moodle platform that is accessible to delegates for a time before and after the classroom session. Course materials, delivered through the Moodle platform or distributed by the trainer, include: ● a handout that contains the part one and part three reading material and supporting material for part two ● a copy of the presentation used in part two ● exercises handouts including answers ● a printable version of the online activities, including answers. Visit cipptraining.org.uk to find out more or book your attendance on this course.
officer, said: “We are thrilled that these organisations have joined the ranks of organisations 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.” Visit payrollcompliance.org.uk to find out more about the PAS. Chartered Members THE INSTITUTE is delighted to announce the latest members to successful achieve Chartered membership: ● Glenn Jones MSc ChFCIPP ● Richard Rowell ChMCIPP Chartered membership recognises the highest level of professionalism within the payroll industry and demonstrates an individual’s commitment to compliance, best practice and excellence in payroll. To upgrade to Chartered membership, visit cippmembership.org.uk or email membership@cipp.org.uk for more information. EIRA HAMMOND ChFCIPPdip, CIPP chair, has been awarded the number one spot in the Reward 300 which celebrates the individuals who have been recognised as the most influential leaders and dedicated professionals working across payroll, human resources, employee benefits, workplace pensions and associated sectors. Speaking at the event Luke Broadhurst, founder of Shard Media, said: “This is a special honour awarded to an outstanding member of the Reward 300, Reward Strategy’s list of the most influential and dedicated leaders of the industry. Chosen by an internal panel, this award recognises the individual’s passion in the public and private application of payroll. After a career dedicated to the private sector, [Eira] moved into a public and industry service role and [her] stewardship has seen the [CIPP] … regain its pre-eminence and be well placed to enter an exciting phase of development and service.” All the winners from The Rewards 2018, can be viewed on page 37. CIPP chair is industry’s number one
| Professional in Payroll, Pensions and Reward | December 2018 / January 2019 | Issue 46 4
Membership insight
Meet the new CIPP chair
Jason Davenport MCIPP MIoD, CIPP’s newly installed chair, discusses his career, role, aims and ambitions
I began my career as an office junior working for a construction company in Liverpool, where I learnt how to complete payroll manually. Writing out all the payslips by hand, building up the tax and National Insurance calculations using tables and building a great understanding of civil engineering rules and working regulations. I then took on roles that grew my career organically through the traditional routes of supervision, team management, and then leadership of large teams located in multiple centres. Having an appetite to build my experience also took me into Europe to deliver multi-country services and eventually globally to provide service provision that used a follow-the-sun approach. My career could well be likened to the saying, from small acorns... My payroll career has taken me across the globe, which means I have experience in working with many different cultures and diverse teams. I also have experience that builds from pre-computerisation and has seen the creation of the standalone payroll engine and its evolution within enterprise resource planning systems that may be hosted on a server-based provision or take advantage of cloud computing – i.e. wherever, whenever. As we now embrace artificial intelligence into our everyday lives, it will be interesting to embrace the technological changes that will naturally become available. I have three children – Patrick is ten and in junior school, Charlotte is thirteen and in senior school and Gabrielle is nineteen and studying at university – so a house full of new millennials who can teach Louise and I a lot about how to
work with new technology. Watching their expectations of voice activation and instant information makes me realise how much in future interaction with technology will change. This is hugely important for payroll and pensions both in the back-office and also how the functions will service employees in the future. I’ve been involved with the CIPP for more than a decade. I worked with the team during my time at NGA, providing support for presentations and workshops and especially graduation day. I became a CIPP board member more than six years ago and been vice-chair for the past two years. I am extremely lucky to have this opportunity to be chair of the CIPP. Eira Hammond has done a fantastic job in the role and really promoted both the industry and the standing of the CIPP during her tenure. This can be recognised in how Eira has promoted the importance of the role of the board, as we received a record number of individuals wanting to stand for the board. The role of the board is vital to the direction, strategy and good health of the Institute and I have thoroughly enjoyed my role within that stewardship to date. I expect as chair to continue within those parameters and know that additional expectations sit with me as leader of the board. I have a real desire to continue promoting the Institute’s credentials within and outside of the industry as we promote qualifications and drive up the number of Chartered members. I know it is only a short tenure, but I hope to bring challenge to the board and
the chief executive officer, ensuring we are focused on delivering quality for the membership, increasing the profile of the payroll, pensions and reward industry and building growth for the Institute as a whole. The membership is fundamental to us as an Institute. I want all payroll and pension professionals to be both proud of the industry they serve and for their employers to recognise the importance of a professional body to support them. We will continue to review our offerings for members and value feedback to improve service provision. Growth of the membership allows for investment in products and services. I appeal to all members to get involved in whatever way they can to promote the importance of the industry. The accurate collection of pay deductions and pension contributions serves a much wider purpose in the health and wellbeing of UK PLC and I ask that no one loses sight of that. I would like to have all professionals working in the industry involved in the production of pay, pensions and reward to be members of the Institute and therefore it is important that the good work of the CIPP reaches non-members to highlight to them why they should become members. I have always worked towards the principles of meritocracy and have never had an office of my own. This is deliberate, to promote an open-door approach. I encourage feedback from all levels of members about all our service offerings, so that appropriate improvements can be made for the entire membership base. n
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| Professional in Payroll, Pensions and Reward |
Issue 46 | December 2018 / January 2019
MEMBERSHIP INSIGHT
On your behalf Policy team update
Diana Bruce MCIPPdip, CIPP senior policy liaison officer, provides an update on recent developments
Guidance for calculating holiday pay The Department for Business, Energy and Industrial Strategy (BEIS) is planning to review the existing guidance on holiday pay. Whilst the advice on GOV.UK currently provides guidance for individuals looking for a basic understanding of their entitlement, it is widely accepted that it is not sufficient for employers to understand their full legal obligations (or for individuals with a more technical question). The intention is to produce more detailed technical guidance, aimed at employers, which can sit alongside the existing guidance. Initial thinking is that the more detailed guidance should include: ● What to do if you don’t have twelve weeks of pay data i.e. where someone is new in the job. ● How to make the calculations where pay is made each calendar month, rather than on a weekly basis. ● The date from which the reference period is calculated. ● How to handle holiday pay for those with irregular/zero hours contracts. ● How to deal with those working on short contracts/temporary workers. ● How to deal with unpaid weeks/periods of absence. ● What pay elements need to be included for the EU-derived entitlement versus the domestic entitlement. ● How outstanding holiday pay is calculated for those leaving a job. ● How to deal with term-time workers. Where possible the plan is to include case studies, particularly for tricky but quite common situations like zero hours
contracts or temporary workers. If there are any other situations which you feel would benefit from more detailed guidance please do email policy@cipp. org . uk with your suggestions and we shall pass them on to BEIS for consideration. Parental bereavement leave and pay BEIS has also published its response to the parental bereavement leave and pay consultation which confirms key aspects of the policy to be set in regulations. As a result of the responses received, government has taken the following decisions: ● the policy will use a broad definition of a ‘bereaved parent’ centred on the notion of ‘primary carer’, with the guiding principle being that the relationship should be parental in nature ● parental bereavement leave and pay can be taken as a single block, or as two separate weeks ● employed parents will have a window of 56 weeks to use the entitlement ● notice requirements will be flexible and will distinguish between leave taken very soon and leave taken at a later period ● evidence requirements will mirror existing requirements used for other family leave and pay rights, where it is practicable to do so. The parental bereavement leave and pay measures apply to Great Britain only. As we stressed in our consultation response to BEIS, and at every opportunity thereafter, it is vital that this statutory right is supported by clear, comprehensive and timely guidance. The CIPP policy team will continue to work with BEIS and will
review and publish draft guidance when it becomes available. Reporting of non-taxable lump sum payments The HMRC Pensions team is encouraging scheme administrators to begin reporting the payment of non-taxable lump sum payments following corrections being made to the real time information (RTI) system. The updates that have been made to the RTI online service will prevent P6 coding notices being incorrectly issued to beneficiaries in receipt of pension lump sum death benefits that are entirely non- taxable. HMRC have apologised for the length of time taken to resolve this issue. Scheme administrators can now resume reporting non-taxable pension lump sum death benefit payments through RTI. For 2018–19, scheme administrators can find guidance on how to report these payments in part 2.2.7 of the 2018 to 2019: Employer further guide to PAYE and National Insurance contributions (https://bit.ly/2sQ4D7C). HMRC accept that it may take time for scheme administrators to amend their processes to report these payments again, but it wants to encourage pension scheme administrators to start reporting these as soon as they’re able to. Pension tax relief We ran a quick poll in October about how important tax relief was to employers when it came to them choosing their pension scheme. We asked: “Did the availability of tax relief for your low paid workers factor into your/your company’s pension scheme choice?” Of those who responded: ● 14% said yes, it was a critical factor ● 18% said yes, it was a factor, but not a
...the plan is to include case studies, particularly for tricky but quite common situations...
| Professional in Payroll, Pensions and Reward | December 2018 / January 2019 | Issue 46 6
Policy hub
critical one ● 35% said it was not an important factor but with 4% recognising now that it should have been. The remaining respondents said it was not applicable to their situation. Members of relief at source (RAS) pension schemes who do not pay income tax, typically those earning less than £11,850 each year, are entitled to basic rate tax relief on pension contributions up to £2,880 a year. However, this tax relief is not available for non-taxpayers in net pay arrangement (NPA) schemes, which means that somebody in a NPA scheme, earning £11,850 and paying the minimum contributions required under automatic enrolment, is missing out on £34.91 in the current tax year as compared to someone in a RAS scheme. At the beginning of October, a letter was sent to the chancellor Philip Hammond by the Low Incomes Tax Reform Group (LITRG) calling on the government to use the forthcoming Budget and Finance Bill to act on the inconsistency in tax rules which means that more than a million people on low incomes could be losing out on tax relief on their pension contributions.
The CIPP together with several key stakeholders in the pensions industry, including two former pensions ministers: Steve Webb and Ros Altmann, were signatories to the letter (see https://bit. ly/2qvXgOw). ...for government to consider how best to provide
whatsoever of this subject, so we shall have to wait a bit longer for government to consider how best to provide fairness and equity for all through the tax system as it relates to tax relief on pension contributions. In its pre-Budget submission, LITRG proposed a solution that would see HM Revenue & Customs (HMRC) use pay as you earn RTI data to identify those making pension contributions under the NPA. Tax relief (where appropriate) could then be provided through an annual reconciliation process – whether that is through self- assessment or – as is more likely – the informal P800 process (i.e. the annual reconciliation HMRC performs to check whether those outside self-assessment have paid the correct amount of tax). n
fairness and equity for all through the tax system as
The Budget, held on Monday 29 October, provided an ideal platform for the chancellor to make a positive announcement for reform to support those on low pay who are affected by this situation. However, there was no mention it relates to tax relief on pension contributions
P11D, expenses and benefits
One day
Designed to give delegates clarity and confidence about how to process the P11D, P11Db forms, PAYE Settlement Agreements (PSA) and net to gross calculations.
This course covers: ● Statutory requirements and implications ● Common errors when calculating company cars and fuel ● Childcare ● Beneficial loans ● Relocations ● Travel and subsistence expenses
● Vouchers / credit cards / tokens ● Gifts and awards ● Retirement benefits ● Salary sacrifice and tax / NICs changes from April 2017 ● Flexible benefits schemes ● Pay As You Earn (PAYE) settlement agreements ● Taxed award schemes ● Grossing up from net payment
● Other expenses ● Entertainment ● Telephones ● Subscriptions
● Key forms and dates ● Penalties and fines
Book online at cipp.org.uk or email info@cipp.org.uk for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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| Professional in Payroll, Pensions and Reward |
Issue 46 | December 2018 / January 2019
MEMBERSHIP INSIGHT
Section 51 of the Human Fertilisation and Embryology Act 2008 prescribes the conditions for parental order applications. The fact that parent B and parent C are living as partners in an enduring family relationship – and the child will be living with them in the UK – means that they satisfy that condition. Parent B and parent C can decide who will take statutory adoption pay and leave (SAL) and who will take the statutory paternity pay and leave. The parent who decides to take SAL can curtail and let the other parent take shared parental pay and leave. Q: One of our employees requested two weeks of statutory paternity leave and pay (SPL and SPP). Whilst on week one of the SPL he handed in his notice and will leave part-way through the second week. Would he be entitled to SPP for the second week? A: The employee is not entitled to SPL, but he is entitled to SPP as long as he does not work for the other employer during the second week of SPP. If he works for someone else during that period no SPP is due to them. This is covered by Regulation 17 of the Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations 2002. Q: An employee’s 90% of average weekly earnings (AWE) are less than the standard rate of statutory maternity pay (SMP), so what do I pay her? What would happen if there was a pay rise? A: The SMP rate is six weeks at 90% of AWE and 33 weeks paid at the standard rate of £145.18 or 90% of AWE if lower. A pay rise would affect SMP for the full 39 weeks if the new AWE was either less or the same as the standard rate. Q: The company where I work only pays outstanding holiday pay to leavers if the employee requests it, so do not pay this automatically. Whilst morally I feel that this is wrong is there any legal ruling which says this is an acceptable process? A: An employer must pay outstanding statutory leave upon the termination of the employee regardless of the reason they are leaving and an employee does not have to request the outstanding leave. I refer to this link: https://bit.ly/2iDIa7K. If an employer offers more than the statutory entitlement of 5.6 weeks’ annual
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 advisory.service@cipp.org.uk or visit cipp.org.uk to live chat.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: I have a question about Christmas parties for employees and Christmas parties for employee’s children. Is it the number of people who attend or who have been invited to a staff Christmas party that you need to divide the cost by? Would you have to report the children’s party? A: To decide if you have exceeded the £150.00 per head exemption point you would need to divide the cost of the employee’s Christmas party by the number who attended. If it has been exceeded, you would have to report the whole cost to HM Revenue & Customs (HMRC). In regard to the children’s Christmas party this would also be reported in full as this would be considered a benefit provided for the family or household of an employee. If the employer did not want the employee to have to pay the tax on this benefit this is something that they may be able to put in a pay as you earn settlement agreement Q: Do you know why for the purpose of calculating class 1 National Insurance contributions (NICs), the amount of earnings used is always less than the gross pay for tax by approximately £2 to £3? I do not understand how this relates to the thresholds; for example, an employee paid basic pay of £3,750.00: this is used as the taxable pay for the period, but £3,747.00 is used for NICs. A: Usually the gross taxable pay for the period will be the same as the NIC- able pay, but there can be a difference
depending on which method you use to calculate NICs. Taking your example, if I use the exact percentage you would use £3,750 to calculate NICs, but if your system uses the tables method you would use the CA38 booklet ( National Insurance contributions tables A, H, J, M, and Z ) to calculate NICs. Page 38 of the booklet should be used in this case, but as there wasn’t a figure of £3,750 to use for the calculation, you are expected to round down to the nearest figure of £3,747 which is a difference of £3.00. Your question implies that the payroll system is using the tables method, not the exact percentage, which solves the problem. You need to confirm this with your software provider though, as it means you cannot use the exact percentage in any manual calculations if the table method is being used by the system. Q: I have an unusual situation involving a surrogacy birth; the scenario being as follows: parent A is the biological mother of the child; parent B is the biological father of the child; and parent C is the male partner of the biological father and our employee. Parent A is taking maternity leave/ pay. Parent B is taking paternity leave/ pay from the time that the baby is due. Parent C wants to take six weeks of adoption leave/pay from the time that the baby is due. Is this possible? A: Both parent B and parent C must apply for a parental order to adopt the baby in order for both parents to take statutory leave.
| Professional in Payroll, Pensions and Reward | December 2018 / January 2019 | Issue 46 8
This qualification sets out to ensure an in-depth understanding of payroll, and the complex payroll legislation involved, and also provides management skills including performance, time, project and operational management Foundation Degree inPayroll Management Join over 15,000 * qualified payroll professionals in the UK
Policy hub
employees are being transferred and subject to the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE). As some of these employees are currently in a childcare voucher (CCV) scheme, we wish to transfer them to our CCV provider. If we do this will the employees still benefit from the income tax and NICs exemption or will it be viewed as the employees entering into a new scheme and so losing the right to the exemption? A: When an employee transfers under a TUPE agreement, all of their contractual rights remain and are protected. The only change that should affect the employee is who they are now being paid by. If you have a scheme in place, the employee can join this scheme and still benefit from the tax and NICs relief. If you as an employer didn’t have a scheme in place, then you could open a new scheme for the employees under the proviso that all the employees were in a qualifying scheme prior to midnight of 4 October 2018. Entry to new applicants would not be allowed into the scheme and no relief could be gained. Q: If an employee is on sick leave, do we have to have the original Fit note in order to process statutory sick pay (SSP)? We are the employee’s second employer and she has given the note to her other employer. A: You cannot withhold SSP if the Fit note is received late. If you know that there is a note to follow, you should process SSP as normal. The Fit note itself is the property of the employee and they should be given this back after an employer has taken a copy. The employee should ask for the original back from the other employer so that you can take a copy for your records. You may this link useful: https://bit. ly/2qArn7D. n
leave, then they can agree separate arrangements for the extra leave, if it hasn’t been taken. Q: A new colleague has challenged the process we have in place for a new starter who lives in Scotland. This colleague has implied that if the new starter declaration shows a Scottish address we should use the emergency tax code of S1185L. Is this correct? A: I can confirm that you would not use S1185L month 1 in this situation. Only if you have a P45 form showing a tax code with a ‘S’ prefix would you use the Scottish prefix for a new starter. If you only received a new starter declaration from the employee, then you can only use 1185L month 1 until HMRC notifies you via a P6 coding notice that the Scottish prefix is correct. Q: We have previously provided a flu jab to our employees ‘on site’ which we know is not deemed as a taxable benefit. We are looking to change this by providing a ‘flu jab voucher’ to all employees to enable them to receive a flu jab at their local Boots store. By giving employees a voucher for a flu jab would this now be deemed as a taxable benefit? A: I can confirm that either method of providing your employees with the ‘flu jab’ vaccination is perfectly acceptable and whichever approach you decide to take neither will be a benefit in kind so will not be reportable to HMRC. Q: We have a client who owns a hair salon. The customers pay the stylists tips but they go through on a card transaction and the owner gives the employee the cash for the tips. I am not sure if they should be recording these tips on their payroll and if so should the tips be subject to income tax and NICs? A: The GOV.UK online guidance on tips, which can be found here: https://bit. ly/2JOM0py, explains that when it is the employer who decides how the ‘tips’ are shared means it is the responsibility of the employer to ensure that the cash payments given to their employees should be processed through the payroll and subjected to class1 NICs and income tax. Q: We have recently acquired a new company where more than 100
Spring enrolments now open visit cipp.org.uk/FDpayroll for full details
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For more information or to enrol: Visit: cippqualifications.org.uk Email education@cipp.org.uk
Call: 0121 712 1023 Live chat with us
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Issue 46 | December 2018 / January 2019
| Professional in Payroll, Pensions and Reward |
*correct at time of publication
MEMBERSHIP INSIGHT
5 minutes with…
accreditation ● achieved recognition at the 2018
Ken Pullar FCIPP, Chief executive officer
Association Awards in bronze position for our industry led annual conference and awards ● were winners at the National Payroll Giving Excellence Awards, receiving the Platinum Award for Payroll Giving ● achieved CPD (continuing professional development) certification, which benefits our members in certifying their continuous professional development to their membership record ● retained ISO9001, and ● received accreditation confirmation as ‘a living wage’ employer. All these hard-earned awards are down to the team here at the CIPP, and reflects on the commitment, passion and quality of service received by you, our members. Plans for 2019 As we come to the close of 2018, Eira Hammond, CIPP chair since July 2016, has stood down at the end of her term at the AGM on 4 December 2018. Chair elect Jason Davenport has become the CIPP’s new chair for 2019 and 2020. Eira’s outstanding contribution to the CIPP as chair was recognised by members, staff and the board at our Annual Conference, graduation ceremony and her final board meeting on 1 November. Eira has passionately promoted CIPP worldwide and her legacy is in leaving the Institute and board in a strong position of leading payroll and pensions professionals through education, membership and recognition. In terms of strategic direction for 2019, the board have focused on a review of our qualifications portfolio, membership and digital marketing. The CIPP senior management team have been working on this through 2018 and this will be the focus of the board during the early part of 2019 with updates and progress to be provided to the membership during 2019.
2018 summary As set out in the annual accounts, I am pleased to report another successful year for the CIPP, both operationally and financially. Our core activities of education, qualifications and membership have, once again, proved to be particularly busy, and I am also pleased announce the CIPP declared a surplus for a second successive year. During 2018, the board of directors has continued to support and provide strategic direction to the CIPP membership. This was founded on re-establishing our core identity and drivers, such as: setting a clear career roadmap in our education and training space; focussing on delivery of a ‘best of class’ training provision; improving the quality of our public-facing material; more focus on greater use of digital media for both education and training; and on issuing a streamlined and easier to understand prospectus. All these activities were successfully achieved during 2018. Having established this base, we will ensure these key areas of delivery continue to have our focus and will be maintained in forthcoming years. Preparing for new board members in 2018, the annual general meeting (AGM) on 5 December 2017 saw thirteen members put forward their names for election, the highest number in CIPP’s history, to fill the three board vacancies. I was pleased to announce the successful election of Suzanne Gallagher, Stuart Hall and Lizabeth Lay as board directors from 5 December 2017, and for the support that their experience in our industry will bring
us over the next few years. In addition, the pensions board role came up for re-election and as Cliff Vidgeon was the only nominee for this post he was successfully re-elected. ...the board have focused on a review of our qualifications portfolio, membership and digital marketing A key achievement in 2018 was being able to offer Chartered membership to individuals who join and meet the criteria. This is important for ambitious payroll professionals who wish to demonstrate their professionalism, expertise, skills and knowledge – Chartered Members can use the CIPP Chartered Member logo on their social media profiles and email signatures. We were pleased to welcome our first 24 Chartered Members during 2018 whose profiles are reflected on the CIPP website ( www.cipp.org.uk/join-cipp/chartered- membership ). I must mention the host of accreditations the CIPP has received during 2018. Recognition in the Sunday Times Top 100 Best Not for Profit Organisations 2018, in a creditable 47th position, was a key achievement. During the year, we: ● continued to hold the Investors in People
| Professional in Payroll, Pensions and Reward | December 2018 / January 2019 | Issue 46 10
Membership focus
What the future holds for payroll, pensions and reward As I’ve often remarked one thing hasn’t changed over the ages – people will always need to be paid, receive rewards and be paid a pension. It will therefore continue just to be as busy and demanding a role as it always has been, dependant on accuracy and timeliness. In fact, for many years most payroll departments have had the following mantra: ‘paying employees accurately and on time’ – which has served us well. However, I think the 21st century payroll team mantra should be: ‘paying employees accurately as per the relevant legislation, on-time payment as per their contract, raising payroll standards and providing great customer-service’. This path can be supported though education, membership and recognition supported by the CIPP. In the last two years we’ve started to focus on the ‘future of payroll’ through an annual survey, which includes elements of pensions and reward. Our 2018–19 survey has recently closed, and the report is due in January 2019. We had just short of 1,000 responses from members responsible for paying 6,000,000 employees (about 20% of the UK workforce) which gives the results some credibility.
Areas that we cannot escape from are robotics, artificial intelligence and even blockchain. Part of the CIPP strategy, with industry and board input, during 2019 will be how we support our membership as the technological advances march ahead.
...promote and celebrate the uniqueness in
reward professionals. It is important both for training, learning, understanding and implementing new legislation, that we are the first organisation individuals think of to support them, and that we continue to be seated within government consultation forums providing a voice to our members and the industry. It’s also important employers realise that employees in their payroll department having a payroll qualification isn’t a ‘nice to have’ but a requisite in performing their role, and that continuing professional development is actively pursued and maintained and that the learning requirement never ceases The CIPP will to continue to focus on our key core activities of education, training and membership and promote and celebrate the uniqueness in offering Chartered membership across our industry. n
We will need to ensure that our membership see our qualifications as material to their aspirations and career, and that our learning experiences are focussed, up to date, informative and of world class quality. This will ensure they are valued and recognised not just in their line of industry but as a key component and critical to the success of their employers and organisations. For the CIPP, particularly having Chartered membership, we aspire to be the organisation for all payroll, pension and offering Chartered membership across our industry
Employment status and modern employment practices
One day
This course explains how to assess employment status, the financial risk of getting it wrong, the right to work in the UK and a variety of modern employment practices. It covers recent developments such as the IR35 process changes (‘off-payroll working’) and possible future developments following various Government consultations.
This course covers: ● Importance of determining employment status ● Determining employment status ● Types of worker
● Employment intermediaries ● Right to work in the UK ● Future developments
Book online at cipp.org.uk/training , email info@cipp.org.uk or call 0121 712 1000 for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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| Professional in Payroll, Pensions and Reward |
Issue 46 | December 2018 / January 2019
CAREER DEVELOPMENT INSIGHT
To appear on this page contact editor@cipp.org.uk
ACTIVPAYROLL APPOINTS STEPHSMITH THE GLOBAL payroll and tax compliance specialist, activpayroll – which is headquartered in Aberdeen, Scotland, is expanding its global mobility team by appointing Steph Smith as global tax manager. With a background in law, Steph has developed a wide knowledge of key issues and concerns that companies with a global footprint have, whilst working in global mobility for a large
KATIE SHARPE APPOINTEDAS SENIORMANAGER - PAYROLL IN OCTOBER 2018, Katie was appointed as senior manager of the payroll team at Saffery Champness LLP. Her team comprises: one manager, two assistant managers, four seniors, two semi-seniors and two administrators, processing a total of 465 payrolls. Katie had joined Saffery’s in May 2017 as an assistant manager and was promoted to manager in April 2018. Jane Hill, partner at Saffery Champness said, “Katie has been with the firm for eighteen months now and in that time has reinvigorated the payroll team with her drive, enthusiasm and passion for all things payroll. “She has recently obtained a thoroughly deserved promotion to senior manager as a result of the positive impact she has had on the team and the office generally. She has a great future ahead of her.” At Saffery Champness, Katie has introduced several new systems and processes to streamline and modernise the approach to payroll. This has enabled more time to concentrate on providing expert payroll advice to clients, train each of the team members and produce unique templates for each client to save them time. The highlight of Katie’s career so far has to be finding out that not only had Saffery Champness had been shortlisted for the CIPP’s Payroll Service Provider of the Year Award 2018 but also that she had been shortlisted for CIPP’s Payroll Manager of the Year Award too.
professional services company. Steph has a wealth of experience in public speaking and debating, bringing something a little different to activpayroll’s wide-ranging skill-set. Steph will be based in the firm’s Edinburgh office where activpayroll’s Global Mobility Division is headquartered and is responsible, together with the Aberdeen team, for delivering the entire global mobility solution to individuals and their employers. The Edinburgh team relocated to larger premises last year, providing continued growth which has resulted in significant recruitment in both the global payroll and global mobility divisions. Steph comments: “Being able to solve a complex global mobility issue to make our customers compliant and put in place a process which they feel comfortable with going forward is a great feeling. “What appealed to me about joining activpayroll after working in other professional services firms was that we could offer a ‘one-stop shop’ for all our customers’ payroll and global mobility requirements, with the payroll and global mobility teams working closely together to provide a seamless service.” Graham McKechnie, global tax director of activpayroll, said: “Steph is a great addition to the team and brings with her a lot of experience in the global mobility arena that will benefit our customers greatly.” ANDBRIEFLY… ● Sandra Donnelly MCIPPdip has started a new position in Payroll at Morgan Stanley ● Angela Cammock MSc FCIPP has started a new position as group payroll and benefits manager at Gi Group ● Chris Deacon has started a new position as UK Country Lead at Keypay Cloud Payroll ● Collette Tierney MSc FCIPP has started a new position as director at 3 Bears Global Payroll Solutions Ltd.
| Professional in Payroll, Pensions and Reward | December 2018 / January 2019 | Issue 46 12
Career development insight
EQ v IQ Strong emotional intelligence is a significant trait in any successful leader. Samantha Caine, managing director of Business Linked Teams, weighs up
the importance of EQ v IQ S uccessful leaders have long stood behind claims of a high intelligence quotient (IQ) being the key to their success. Donald Trump is one example of a leader who has made serial claims of a higher IQ than his peers. With many people placing a lot of pride in the numbers that represent their intelligence quotient, emotional intelligence, also known as EQ, is as important in leadership. And those with a high level of EQ will know better than to boast about their IQ. While a person’s IQ can be difficult to grow, a higher EQ can be cultivated. For organisations joining the global movement of succession planning and investing in the growth of future leaders, emotional intelligence can be instilled in chosen candidates through the right training and development programmes. Unbound emotion Teaching emotional intelligence is all about instructing people on how to be aware of both their emotions and the emotions of others, enabling them to use that information to formulate their response in a pragmatic and deliberate way. In the workplace this can be delivered through behavioural training which can transform the way people behave, particularly in relationships with other people and in leadership this is essential. Businesses are becoming increasingly aware that the ability to communicate with and relate to other people effectively is a core factor in ensuring business success in the future. Leading edge organisations recognise that their people resource is the single most significant factor that will enable them to differentiate themselves in the future and they want to invest in this resource.
IQ is still relevant in today’s workplace. It’s easier to measure than EQ, so typically organisations still select and promote people based on their IQ or technical capability. This means that they have skilled people to do their jobs but those people don’t necessarily have the EQ needed, for example, to work effectively in teams, to lead other people or to deal with difficult customers. ...able to interact effectively with other people – and this is a core competency of a successful leader Emotional intelligence is about being able to interact effectively with other people – and this is a core competency of a successful leader. They must be able to lead, persuade, negotiate and inspire other people. The more emotionally capable a business is, the more agile it will be and the better it will be able to identify and respond to market changes and customer needs. Emotional intelligence is a combination of different skills, therefore measuring it is no simple feat. To some extent EQ is subjective which makes it even more challenging. EQ needs to be measured through a number of different routes including the results that they achieve and the competencies and tools that they have identified as core for their business. For managers, for example, a combination of results from 360-degree feedback, customer satisfaction surveys and
achievement of objectives can all provide an indication of someone’s ability to work effectively with other people. Getting the right balance It would be unfair to say EQ is always more important than IQ since it really does depend on the role. However, most organisations would acknowledge that in general, developing IQ is easier than developing EQ and therefore developing EQ is where the focus should lay. IQ is easier to compartmentalise, structure and manage, so that’s why it maintains the focus. As far as true leadership goes, we would argue that a leader can have less IQ than those in their team. Yet they must be able to lead the team and empower them to achieve results. In many teams, the leader is not necessarily the expert so it is their ability to lead that counts. Take football managers for example – the manager is not the best footballer in the room and may never have been that accomplished as a player but they can still lead the team. IQ training is something we are more familiar with. Schools, colleges and universities all focus on academic development – the development of IQ – and it’s often based on repeating information that has already been taught. The most effective behavioural training programmes focus on developing EQ by providing the theory and following it up with plenty of opportunities to test the new skills and receive feedback in a safe environment that replicates the real world working environment. By striking the right balance between EQ and IQ, organisations can ensure future success and continued success with effective leadership across the board. n
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Issue 46 | December 2018 / January 2019
| Professional in Payroll, Pensions and Reward |
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