MEMBERSHIP INSIGHT
on a non-banking day we change the pay date reported in the full payment submission (FPS). This has resulted in some employees experiencing difficulties in the amount of universal credits they receive. We have been told that we should not change the pay day reported in the FPS if the pay day falls on a weekend or other non-banking date, and that this would solve the problem. We are concerned whether this would be compliant. Can you please advise? A: In 2013, employers started to report (in real time) earnings data and personal information for their employees. This real time reporting was mainly driven by the introduction of the new state benefit, universal credit. Since these changes under real time information (RTI), pay as you earn schemes are now required to send information about income and personal circumstances to HMRC ‘on or before’ the date that each individual is paid. Though you are aware that you are required to submit FPS returns on or before the date of payment, which you do, there are however certain times when your client’s payment dates are brought forward (normally if the pay date falls on a non-banking day), and this in turn is leading to issues with the DWP and universal credit payment. Namely, the date of payment does not correspond with the DWP’s accounting period, meaning that the employee is seen to be receiving two payments in the one assessment period. This in turn impacts on the amount of universal credit the employee is entitled to. It goes without saying that due to the types of employees and their level of earnings, this can cause some additional hardship. In order to help you remain compliant and also help the client deal with this issue in the best way possible for their employees you should utilise the easement which is allowed when a payment is due on a non-banking day (e.g. weekend or bank holiday). To apply the easement, you would do the following. ● leave the payment date as the regular payment date ● process the BACS payment to credit on the closest available banking day ● submit the FPS, ensuring that you select late reporting reason G – reasonable excuse.
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Advisory
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Q: An employee requested one week of statutory paternity leave (SPL) and statutory paternity pay (SPP) but during the week’s SPL he worked a shift. How does this affect his entitlement to SPP? I can’t seem to find anything in the guidance. A: Yes, it will affect the employee’s SPP. If the employee comes into work within the period of the seven (or fourteen) calendar days of the SPL week (or weeks), it will mean that the employer cannot pay SPP to the employee. This directly links to form SPP1 which you would use to inform the employee that you cannot pay him SPP: https://goo. gl/Bvytn0. The reason you would choose is the one entitled ‘you worked on’, which explains to the employee that you cannot pay him SPP as he worked during the SPL week. business miles travelled (under and over 10,000 in a tax year) is 20p though this is only payable for business miles and not for the home to work commute. We apologise for the confusion caused and would like to thank members for drawing this to our attention. Erratum An answer written in response to a question featured in the Advisory article of the March issue (see page 9) included an error. Approved mileage rates are published by HMRC via GOV.UK and different rates are set for cars and vans, for motorcycles and for bicycles. They can be used to reimburse an employee for miles travelled in the course of business using their own vehicle. The current rate for bicycles for all
Q: An employee is taking two week’s SPL. Company policy allows the employee to receive occupational paternity pay (OPP) which equates to full pay. Usually, SPP would be offset against OPP; for example, based on the employee being entitled to £800.00 full pay per week, he or she would be entitled to £139.58 SPP with £660.42 being OPP. We are unsure what should be paid if the employee doesn’t qualify for SPP but we still pay full pay (as per company policy). How does the Department for Work and Pensions (DWP) know the employee would be entitled to and in fact receive OPP? Should we deduct an amount equal to the SPP of £139.58, and only pay £660.42 so the employee can claim SPP from the DWP? A: When an employee is not entitled to SPP there is no other statutory payment available. Potentially the employee may be able to make a claim for some other social security benefit, but it would be the employee’s responsibility to declare any income they receive from their employer to DWP. The employer would not be able to reduce the OPP for anything other than SPP, unless there was provision for that in the employment contract and the company’s paternity pay scheme. If the employer made a deduction without a provision that could mean that the deduction would be illegal. Q: A client’s employees are having problems with universal credits. When we pay early because pay day falls
| Professional in Payroll, Pensions and Reward | April 2017 | Issue 29 6
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