Official publication of The Chartered Institute of Payroll Professionals
in Payroll, Pensions & Reward
Issue 48 March 2019
Winning the war for talent
Achieving full potential Time, feedback, skills
Embracing the power of payroll Partnerships, experience, technology
Go with the flow Happy, creative, productive
CIPP update | Policy hub | Career development
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“Never confuse the size of your paycheck with the size of your talent.” Marlon Brando (1924–2004)
Sometimes when thinking about writing this comment piece, something unanticipated emerges as the core theme. This time I perceive – or, maybe, imagine – a trend in payroll processing industry developments. This issue (and indeed the previous one) carries several pieces which might Editor’s comment
timing simply a coincidence; or I could of course be reading far too much into the perceived trend. You are welcome to draw your own conclusions. Often and typically industry developments are accompanied by noteworthy and suggestive staff changes, most obviously at senior executive level. Such changes might arise because of the demands for new investment and skills. There have been several of these changes recently – so it’s timely (or simply a coincidence) that this issue’s feature topic is about winning the war for talent (pp38–41).
suggest that something significant and fundamental is occurring. See, for example, pages 11, 26, 29 and 30 this issue (and also pages 14–15 in the February issue). Maybe the leading payroll bureaux are striving to reposition in or enter their chosen markets, perhaps to regain share and profitability or to achieve synergy with other market players? Or maybe they are developing new products and services that feature AI and machine learning? Perhaps it’s a combination of all these things, and the
Mike Nicholas MCIPP AMBCS (editor@cipp.org.uk) Editor
Chair’s message
Whether in the field of payroll, pensions or reward, the cyclical nature of the role is similar with a variety of weekly, monthly, quarterly and annual requirements of managing the disciplines. Regardless of a calendar year end or a tax year end, this is often
and so it is important to make sure it is as good a fit as can be established, right from the start. Both attracting and retaining talent, means the reward of employment, and the ‘offer’ must be scrutinised, and certainly will be reviewed by those in the market to consider next steps. Offering great working environments, the opportunity to expand horizons and build capability, as well as an up to date and relevant breadth of employer benefit choices, help you to stand out from the crowd. Individuals have individual needs, so offering as flexible a reward package which takes account of where an individual may be in their career and life journey certainly helps to stand out from the crowd and be recognised as an employer of choice. Being aware of the strength of employment sites such as Glassdoor and The Best Companies Awards is hugely important also to know what trends are relevant and being monitored.
time when individuals take stock of their role and consider change. Of course, the other annual event of a performance review, for those that have them, can also trigger the desire to take stock and consider career planning. Individuals may well start looking for a new position and considering their next career challenge, likewise employers may be looking for new talent to bring into the team. Employers: consider exactly the type of good fit for your organisation, not just technical skills but interpersonal and the ability to grow and change with the organisation. Those seeking employment: consider what do you bring to the employer, know your capabilities and consider what areas you may be looking to develop and whether the role or the employer you are considering can offer you those. The cost of a mistake at interview for either party can take a long time to remedy
Jason Davenport MCIPP MIoD (jason.davenport3@cipp.org.uk) Chair, CIPP
CEO’s message
The darkness of winter is well behind us and the lighter mornings and nights are a sure sign spring is on the way. Hopefully those new year resolutions are still in place and if so also resolve to continue your continuous professional
details of venues for these updates and forums. We then have many key events for the year. It’s the 21st anniversary of our National Payroll Week. Although commencing on 2 September – and a way off – we’ve started our planning already. We also have our very successful Scottish National Conference on 5 September which is receiving very positive ratings yet again from those who attended. And, of course, our award-winning Annual Conference, Exhibition and Excellence Awards, back at Celtic Manor (by popular request) on 2-3 October. And don’t forget this is the ideal place to showcase you and your company’s excellence. Details of our conferences are on pages 12 and 24.
development (CPD) during 2019. What do we have on offer to support our ever-expanding membership base? Are you scheduled to attend any of the events the CIPP have been planning for this year? Want to be kept informed, updated, ahead of the pack and at the top of your profession? For our members, a valued (and free) membership benefit is attendance at our ever-informative national forums with timely industry updates at various locations. These regularly exceed over 1,000 members in attendance during the year with many of these booked up in advance. It would be a nice challenge to have to organise more to accommodate the additional demand! So, book up early to make sure you’re able to attend. See pages 7 and 12 for
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 48 | March 2019
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at payrollpensionsandreward.org.uk
Contents
March 2019
41
Go with the flow
Julie Lock argues that flow is the secret
Features
13
18
16
In-year triggers – it’s all in the coding Helen Hargreaves sets out developments
Achieving full potential Giulia Remondino discusses what you can do
The basics of SMP and Alabaster Jill Smith explains the rules
20
22
26
Embracing the power of payroll Jean-Luc Barbier outlines the biggest considerations
Beware the phantom of the OpRA Robin Woodhouse reveals unintended tax consequences
2019/2020 vision SamanthaMann focuses on insight changes
| Professional in Payroll, Pensions and Reward | March 2019 | Issue 48 2
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Chief executive officer Ken Pullar FCIPP CIPP board of directors Jason Davenport MCIPP MIoD Suzanne Gallagher MCIPP Stuart Hall MCIPPdip Ros Hendren MSc, FCIPPdip, CMgr FCMIdip, FHEA Dianne Hoodless MSc CHFCIPP FHEA Liz Lay MSc FCIPPdip Karen Thomson MSc ChFCIPP, FHEA Cliff Vidgeon BA (Hons) CMA, ACIS, FCIPP Ian Whyteside MCIPP, FMAAT, ATT 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
Automatic enrolment update TPR provides research findings and compliance activity
Pensions in a muddle Henry Tapper discusses moves to protect retirees’ pensions
36
34
Disability, discrimination, dismissal, Nicola Mullineux outlines decisions
Imminent wage increases Danny Done sets out what you need to know
38
Useful contacts
Winning the war for talent Jerome Smail reveals ways to recruit and retain talented employees as demand increases
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 info@cipp.org.uk 0121 712 1000
Regulars
29 Industry news 31 Pensions insight 33 Pension news 34 Reward insight 38 Feature articles
01 Editor’s comment, Chair’s andCEO’s messag e
Events, news and developments
04 Membership insight
Fiveminutes with, On your behalf, Advisory
10 CIPP update 11 Movers and shakers 12 Events Horizon 13 Career development Diary of a student, CPD
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 2019. 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.
Winning the war for talent
48 Aweek in the life of 54 Confessions of a payroll manager Additional online content 42 UC case - the court’s decision 46 Motivation matters 47 The damaging effect of unconscious bias
16 Payroll insight 27 Payroll news
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| Professional in Payroll, Pensions and Reward |
Issue 48 | March 2019
MEMBERSHIP INSIGHT
5 minutes with…
retake my position on the board and immediately resume working with my fellow board members to capitalise on all the hard work already invested, to help take the CIPP to the next level in the industry. What does the future hold for payroll, pensions and reward? This is always a tough question to address so – given the pace and frequency of change relating to legislation, the economy and the changing shape and diversity of the general workforce, including their expectations of employment-related reward – the answer to it will change frequently depending on the current climate and industry trends. As industry experts it is important that we constantly scan the horizon to keep pace with all the changes, including the myriad of technological advancements, to ensure we take advantage of and maximise opportunities that present themselves. Specific areas of interest are likely to be associated with: blockchain technology and how it can be utilised to improve the security of the payroll process; artificial intelligence and how this is likely to provide opportunities for automation, efficiencies, and added value service; the millennial workforce and what they want from their employer, their employment, and any associated remuneration; and, of course, Brexit. n
Ros HendrenMSc FCIPP, CMgr, FCMIdip, FHEA Board director
Can you remind readers how you first became involved with the CIPP? My first involvement with CIPP (or the IBPM as it was known at the time), was back in 1995 when I enrolled on the Diploma in Payroll Management, now replaced with the Foundation Degree in Payroll Management. Reflecting now to where it all began for me – just as the CIPP has changed and evolved immensely over the last 24 years, so has the industry, and my career within it. At every stage of my development, the CIPP has been there to provide the support, training and development to help me achieve the next aspirational level of my career. What are your plans for 2019? This year is a milestone year for me: I will celebrate both twenty years since graduating with the MSc and also my fiftieth birthday, I will reach thirty years in the payroll industry, and my daughter will begin school. Reaching milestones such as these gives me pause for thought, and I have been reflecting over achievements to date and where to go next to take things to the next level. On the radar is to achieve Chartered membership of the CIPP. Having already achieved Chartered Manager status with the Chartered Management Institute several years ago, I appreciate the value the status brings in terms of personal
confidence, profile within the industry, client perception, and approach to continuing professional development and learning opportunities. This prestigious accolade has been a goal of mine for some time, and so I have set myself a new year resolution, to make it happen as soon as possible. This prestigious accolade has been What does being reappointed to the board mean to you? Since being elected onto the CIPP board of directors for the first time in 2014, I have taken an active role in guiding the Institute through some much-needed change, to ensure we have a strong and sustainable future. The experience has provided me with a deeper understanding of the CIPP, its role in the industry and community, and therefore what our members want and need from industry support and representation, technical support, training and vocational qualifications. Being re-elected means that I can and so I have set myself a new year resolution... a goal of mine for some time,
| Professional in Payroll, Pensions and Reward | March 2019 | Issue 48 4
Policy hub
On your behalf
Policy team update
We have yet another ‘pay reporting’ obligation in the pipeline for payroll professionals to grapple with in the formof ethnicity pay reporting. Diana BruceMCIPPdip, CIPP senior policy liaison officer, reveals research findings and the Institute’s recommendations
I n her February 2017 report, Race in the Workplace , Baroness McGregor- Smith recommended that the government should legislate to introduce mandatory reporting of ethnicity data. At the time, the government said that the case had been made for ethnicity reporting and it expected businesses to do this voluntarily. The government asked Business in the Community to assess what steps employers had taken to haul down workplace barriers and harness the talent of a diverse workforce – they found that barriers persist in the workplace (https://bit.ly/2S70jt6). Only a small number of employers had chosen to publish ethnicity pay data voluntarily, so in October 2018 the government published a consultation (https://bit.ly/2RGJuFn) on ethnicity pay reporting (alongside a Race at Work Charter – https://bit.ly/2PAk7DK) asking how a new mandatory reporting requirement should operate. After gathering feedback from
our members and the wider payroll community the CIPP submitted its formal response to the consultation in January. From the consultation paper we extracted the questions most relevant to the payroll function and sought members’ views. The following is a summary of the feedback we received. ● ● What are the main benefits for employers in reporting their ethnicity pay information? – Our members are very much aware of the practical challenges that pay transparency reporting presents and remain to be convinced of the benefits to the employer in the same way that benefits could be demonstrated with gender pay gap reporting. Ethnicity declarations aren’t currently collected by the majority of respondents and where collected they aren’t (on the whole) stored within the pay system, thus increasing the burden to produce usable statistics. It was recognised though, that this presents a possible opportunity for the employer to be able to demonstrate
good practice and this could provide a mechanism to encourage greater equity where it doesn’t currently exist. There was, however, significant concern about the challenge of collecting and storing ethnicity data due to current low levels of employee engagement together with the ethnicity selection being a matter of information should be reported that would not place undue burdens on business but allow for meaningful action to be taken? – Whilst the majority of responses to this question favoured a single ‘one pay gap’ figure this is likely to link to the desire for increased simplicity together with the reduction of administrative burden. Reporting several pay gap figures may reflect greater accuracy (assuming a solution could be found to low numbers being reported); however, simplicity would be preferred, and it is recognised that having a number of figures based on standard classification could result in a significant number of calculations being required. It is recognised that the preference for pay quartile reporting would provide a more representative view of the distribution of pay differences. Almost a third of respondents did not know at this personal employee opinion. ● ● What type of ethnicity pay
...third of respondents did not know at this point what the preferred solution to this reporting challenge could be...
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Issue 48 | March 2019
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MEMBERSHIP INSIGHT
point what the preferred solution to this reporting challenge could be. ● ● What supporting or contextual data (if any) should be disclosed to help ensure ethnicity reporting provides a true and fair picture? – Comments highlighted concerns about variances that will be presented as a result of geographic differences in ethnic populations. There was also concern about the complexity presented with ethnicity pay reporting; there was, however, a recognition of the possible value that considering age and gender may have as long as the data numbers (headcount) were significant enough to be meaningful. ● ● Should an employer that identifies disparities in their ethnicity pay in their workforce be required to publish an action plan for addressing these disparities? – 70% of respondents believe that an employer should publish an action plan and recognise the valuable role it could play. However, commentary also suggests that there is a strong belief that a less prescriptive approach, as adopted with gender pay gap (GPG) reporting, would be preferred to enable employers to ‘tell their story’ in a way that best suits their situation. A simple accuracy declaration as required with GPG reporting would be preferred leaving the employer the freedom to select the most appropriate manner in which to narrate their experience, within their sector and their geographic location/s. ● ● Do you currently collect data on ethnicity at your workplace? – 44% of respondents do use standard ethnic classifications but of those who responded ‘yes’ 67% would need to carry out further research to inform them what classification is used. The 2011 Census: 5 standardised ONS ethnic classification was identified as being used as was HESA ethnic classification (https://bit. ly/2KGbFTY). ● ● What do you think are the most effective approaches for employers to improve employee self-reporting or declaration rates? – The majority of respondents felt that there needs to be a mandatory obligation in order for this to be adopted by employers that currently don’t collect this data. It was noted several times that this data isn’t currently being collected and so
additional time would need to be built in to allow this to begin, which will take longer with existing staff. There needs to be good communication with employees as to why this data is being collected and for what purpose, together with using multiple resources for employees to complete the declaration including online and self-serve facilities. Collecting it during the onboarding/ recruitment process was seen to be the most effective time. ...every step of the roll-out process ● ● How should self-reporting or non- disclosure rates be reflected in the information reported by employers? – Keep as simple as possible, reporting in an annual statement the number of employees who have elected not to disclose by including ‘not to say’ as an answer option together with the number who haven’t engaged – whilst explaining steps taken to collect data. This will in the short-term reduce effectiveness of figures reported but in itself could provide a starting point of ethnicity pay transparency with which the employer can build on in subsequent years. This was not a challenge faced by employers with GPG reporting and so any new policy delivery will need to provide ample time recognising that for the majority of employers this data isn’t currently collected and will need to begin before the first reporting year. ● ● For a consistent approach to ethnicity pay reporting across companies, should a standardised approach to classifications of ethnicity be used and what would be the costs to your organisation? – Costs will vary enormously – a more detailed survey will be useful when a firm proposal is known. ● ● Please outline steps that should be taken to preserve confidentiality of individuals – There was broad support for the restrictions applied within the civil service workforce statistics, but this could have the result of organisations at the smaller end of the reporting size range should be more structured and better promoted
never reporting accurate results – which in turn would place a greater challenge on the narratives needed in order to move towards providing transparency. Confidentiality is of particular concern in geographical regions with low ethnic working populations. Publishing more examples of best practice by using employer case studies from those currently reporting on ethnicity could provide a wider range of examples over and above the civil service example. ● ● What size of employer (or employee threshold) should be within scope for mandatory ethnicity pay reporting? – Though a five-employee threshold for inclusion of an ethnic group was suggested in the consultation paper (including employers with less than 500 employees), this might result in there being insufficient people in many of the ethnic groups for them to be included in the reporting. Many felt that if ethnicity pay reporting is to be mandatory the threshold should be in line with that for GPG reporting. One of the comments received suggested that an ‘all or nothing approach’ is the only way to obtain true data. ● ● What support measures do you think would be useful for employers? – Learning from the delivery of GPG reporting, every step of the roll-out process should be more structured and better promoted. More accurate information needs to be shared at a much earlier stage and the Department for Business, Energy & Industrial Strategy will need to set out a clear and achievable timetable and deliver on it. Many employers don’t currently collect ethnicity data and so a much longer timeline for policy delivery will be needed; as a minimum an extra year will be needed for employers to begin collecting this data before they could then consider providing a report. This wasn’t a challenge presented with the delivery of GPG reporting. As a first step and before reporting requirements are considered, employers should be mandated to collect this data from their existing workforce. ● ● Lessons from GPG reporting – In addition to asking questions posed within the consultation paper, we also asked members for their thoughts on what lessons could be learned from the delivery of mandatory GPG reporting. ❍ ❍ There needs to be recognition by
| Professional in Payroll, Pensions and Reward | March 2019 | Issue 48 6
Policy hub
government that organisations try to automate reporting wherever possible, so lead time for software development must be included as a prerequisite to any new legislative changes in future. ❍ ❍ Information and legislation were delivered too late for a number of software providers and companies required to report. Delaying legislation meant many courses run by various companies could not provide the most accurate information as it was still in draft form until after the reporting dates. ❍ ❍ Unlike GPG reporting there will be a need to collect information from long-serving employees which has not previously been collected, so time will need to be factored in to allow for this. ❍ ❍ Guidance and information was not clear and still leaves large areas which can be misinterpreted. There was a lot of confusion regarding which pay elements to include/exclude.
and human resources (HR) professionals along with their software developers will be instrumental in ensuring that affected employers comply with mandatory requirements to report ethnicity pay gaps and achieve greater transparency. This is the first step in developing policy in this space and much more detail and discussion will be required before ethnicity pay transparency can be delivered. ...Rushed delivery will not achieve accurate outcomes
developers, payroll and HR professionals and so we recognise different methodology will be required. If government consider that the time is right to deliver another reporting obligation on employers, in the name of transparency, significant time and structured planning will be needed. Rushed delivery will not achieve accurate outcomes. Lessons need to be learned from the roll out of GPG reporting with government engaging in greater detail with all affected stakeholders as they continue to consult. Employers pay processes vary in size and complexity enormously and with the added challenges for gathering accurate ethnicity data, this adds further layers of difficulty. The CIPP policy team see this consultation as the start of a conversation and not the end of it and look forward to being involved in further consultation and discussion with government and stakeholders. n
From an administrative burden perspective comparability with the
methodology applied for GPG reporting would be preferred by our members. However, our members are pragmatic and recognise that this will not achieve the same results because of the different challenges presented by ethnicity classifications, yet value must be achieved through the efforts of the software
Conclusion and recommendations As with gender pay gap reporting, payroll
All consultation responses are available in the Policy hub on our website.
Hear from the experts at our national forums Exclusive to CIPP members*, the national forums are a perfect opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation. This event will also provide an excellent chance for you to network with other CIPP members.
Available dates:
Bristol
London
2 May
13 June
Belfast
Newcastle
9 May
18 June
Manchester
London
16 May
10 July
Cardiff
London
22 May
11 July
Glasgow
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6 June
17 July
London
12 June
*applicable levels of membership only. Please be aware that lunch will not be provided.
Book online at cipp.org.uk/events , email info@cipp.org.uk or call 0121 712 1000 for more information.
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Issue 48 | March 2019
| Professional in Payroll, Pensions and Reward |
MEMBERSHIP INSIGHT
& Customs (HMRC) have provided a fact sheet (which can be found at this link https://bit.ly/2t1udDr) explaining that from April 2018 employees charging their own electric vehicle at work are not liable to pay tax on the value of the electricity used. Q: An employee who is currently absent on long-term sickness is in receipt of statutory sick pay (SSP). I have received a request for him to be paid statutory paternity pay (SPP), as his partner is expecting a baby. The birth is due in eight weeks’ time which is before the end date in his fit note. Can I process SPP whilst he is in receipt of SSP? A: When an employee is in receipt of SSP, the guidelines advise that you cannot process a payment for SPP for any period in which the employee is entitled to be paid SSP. You must send your employee a copy of the form in which he sent requesting the leave, giving the reason as stated above as to why this can’t be paid. However, as SPP can start on any day of the week, should the situation change – for example, the employee returns to work – then he may be eligible for SPP. You would need to look at the qualifying period to establish if he meets the criteria for it to be paid. Q: As you may know, a fee of not more than £65 would be payable by each EU national applying for settled status in the UK. My employer had decided to reimburse employees for this cost as it would enable them to carry on working here. How is this payment to be treated? A: Note that on 21 January 2019, the prime minister announced that the fee(s) for applying for settled status via the EU Settlement Scheme (https://bit.ly/2trb9PZ) would be scrapped when the scheme is rolled out in full, from March 2019. Anyone who pays or had already paid a fee will be reimbursed by the government. If your employer has reimbursed an employee for such a fee, the amount should be processed as a cash payment Employer Bulletin indicates that the cost of this tax charge could be met by the employer via either a PAYE settlement agreement or grossing up the payment so that the net amount payable to the employee is the cost of the fee. through the payroll. However, the December 2018 edition of HMRC’s
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: My question is about electric company vehicles. Where the employee has paid to charge their vehicle away from work premises, what rate would be paid for business mileage and would this be free of tax and National Insurance contributions (NICs)? A: This rate is now 4p per mile, and yes this would be tax- and NICs-free. Please see the following link: https://bit. ly/21tor7N. Q: Can you advise whether a salary sacrifice for pension can be deducted from statutory maternity pay (SMP) or occupational maternity pay (OMP)? The employee will receive 90% of full pay for the first eight weeks and then ten weeks at half pay plus SMP. A: I can confirm that you cannot take a salary sacrifice of any sort including pension from a statutory payment (including SMP) but, you can take it from contractual maternity pay (CMP) if this is payable. You will need to be careful during the first six weeks when SMP may be the same value as 90% of CMP. In this situation salary sacrifice for pension cannot be deducted. With salary sacrifice for pension the employee has given up in advance an element of pay in return for a higher employer pension contribution. Therefore, an employer must pay this higher contribution over to the pension scheme regardless of the sacrifice being taken from the employee. Also, these higher contributions must be based on the employee’s pay as if she were working
and earning normally and for the whole of the paid maternity leave. This is usually 39 weeks but could be longer if the occupational element of the maternity pay is for, say, 52 weeks. Q: We are in the process of introducing some salary sacrifice schemes and we are unsure as to whether we should be using the pre-sacrifice salary or the lower post-sacrifice salary for pension contribution calculations. Could you please advise us? A: Whether an employer uses the pre- salary sacrifice pay or the post salary sacrifice pay is a decision for the employer to make and you should consult with your human resources team on this. Guidance found on GOV.UK (https://bit. ly/1UPWLs3) is reproduced below. “Effect of salary sacrifice on payments and benefits – Earnings related payments – Employers usually decide how earnings- related payments such as occupational pension contributions, overtime rates and pay rises are calculated. Such payments can be based on the notional salary or the new reduced cash salary, but this must be made clear to the employee.” Q: My employer is looking at providing electric charging points in its car park for staff to use. The chargers would be for staff who have their own electric cars and are used for personal use including commuting. Can you clarify whether this is a taxable benefit? A: There is no reportable benefit in kind in this situation and HM Revenue
| Professional in Payroll, Pensions and Reward | March 2019 | Issue 48 8
ENROLMENTS NOWOPEN
Policy hub
Certificate inPensions Administration
Q: For reporting the chief executive officer pay ratio which tax years are to be used? A: It depends on when the financial year commences for a company as to which tax year you would need to take the information from. So, if the financial year commences on 1 April 2019, you would gather information from tax years 2018–19 and 2019–20. If the financial year runs from 1 January, then you would use tax years 2017–18 and 2018–19. Q: We are looking at putting in place fuel card usage for our company car drivers. We operate a monthly payroll, so the first opportunity we’d have to make good the private fuel for 5 April each year would be in the April 2019 payment. As this would be in the new tax year would this be ok? A: If the employee makes good the private fuel by 6 July then it will not be reportable. This link to GOV.UK provides guidance: https://bit.ly/2RHwlzx. Since the 2017–18 tax year the latest date for making good the cost of all fuel provided for private use when calculating the fuel benefit charge is 6 July following the tax year in which the private fuel is provided. Q: I am looking for advice on operating an attachment of earnings order (AEO) in respect of a fine in Northern Ireland which was introduced in 2018. How should I calculate the deduction if the employee has been paid holiday paid in advance? A: You should use the same guidance as for direct earning attachments which can be found here: https://bit.ly/2AXOoXu. Where the amount to be paid to the employee on any pay-day includes an advance in respect of future pay, the total amount to deduct is determined by dividing the whole amount of net earnings by the number of pay periods, calculating a single deduction amount and then multiplying this by the number of pay periods. Q: One of my client’s employees will receive a bonus this month which will be taken into account when calculating the student loan deduction. The person has requested that we amend the
deduction to not include the bonus figure. Is it legal to do so? A: The bonus must be included in the calculation for the student loan deduction as the bonus is liable to class 1 NICs. Therefore, if you exclude it from the calculation it would be illegal. Bonuses and fees are classed as being earnings for student loan purposes. Q: As we operate a lunar payroll there appears to be fourteen pay periods this tax year. Can this be changed to happen next tax year? A: Unfortunately, you cannot determine or change the tax periods to suit the company or employees. If the employer makes a payment which is week 52, and then has to pay again on or before 5 April it will be considered as week 53/54/56. Please see these links: Q: A couple of our employees do not qualify for SMP due to earnings being below the lower earnings limit for class 1 NICs or not satisfying the employment test. We are going to pay them occupational maternity pay. Are we able to claim the 92% back from the government via the employer payment summary? A: If the employee is not entitled to SMP the employer cannot recover the 92% back as she is being paid OMP not SMP. The employer should issue a SMP1 form and return the MATB1 form to the employee, retaining a photocopy of each. The employee could potentially be entitled to maternity allowance (MA) from the Department for Work and Pensions. If provided for in the OMP scheme the amount of the OMP could be reduced by the MA. This link to GOV.UK provides technical guidance on maternity benefits available to employees taking maternity leave: ● ● GOV.UK – https://bit.ly/2DuLETl ● ● Income Tax (Pay As You Earn) Regulations 2003 – https://bit. ly/2HvuUPQ.
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| Professional in Payroll, Pensions and Reward |
Issue 48 | March 2019
*correct at time of publication
CIPP update
First Chartered members of 2019 announced FOLLOWING THE Chartered Member panel review on 24 January 2019, we are delighted to welcome two new Chartered Members: Chartered membership demonstrates the highest level of professional membership in the industry, and recognises those individuals who have worked hard to raise the profile of payroll and their professional standing through education and continuing professional development. It demonstrates to employers that you are committed to keeping up to date and raising the standards of best practice within the industry. To become a Chartered Member, or find out more, visit cipp.org.uk or email membership@cipp.org.uk . ● Olivia Dunham ChMCIPPdip ● David Sullivan ChMCIPPdip
Payroll Assurance Scheme
BOTH THE Parliamentary and Health Service Ombudsman and Bishop Fleming Payroll Services Limited have successfully achieved the prestigious Payroll Assurance Scheme accreditation. Ken Pullar, CIPP chief executive officer (CEO), said: “We are thrilled these organisations have joined the ranks of those achieving this respected accreditation. It is imperative that organisations comply with government legislation and the Payroll Assurance Scheme is designed to help them do just that.” Visit payrollcompliance.org.uk or email info@cipp.org.uk to find out more about the Payroll Assurance Scheme.
CIPP announced in Sunday Times Top 100 Not-For-Profit Organisations to work for FOR THE third year, the CIPP has been named in the Sunday Times Top 100 Not-for-Profit Organisations to work for. This prestigious award acknowledges excellence in workplace engagement and is judged purely on a staff survey – with only the highest level of overall employee engagement qualifying for the top 100. Ken Pullar, CEO of the CIPP, said: “The CIPP is committed to delivering quality and excellence in everything that we do, aligning us with The Sunday Times Top 100. It is only through achieving excellent employee engagement that we are able to deliver quality and excellence in our services to members.
The fact that our employees have been engaged enough to respond to the survey and are motivated and committed to the CIPP mission and values speaks volumes, and I thank them for their hard work and dedication. We could not have achieved this accreditation without them.” The best-companies-to-work-for lists have been recognising excellent employee engagement for almost twenty years. The accreditation programme was modelled on the Michelin Guide star system which means it stands for quality and excellence. At the time of writing, the CIPP is awaiting the Best Companies Awards on 21 February to find out our position within the 100. This will be announced in News Online once known. Global payroll complexity index THE CIPP is proud to be supporting NGA Human Resources in producing the 2019 Global Payroll Complexity Index (GPCI) and we invite you to provide your invaluable input into the GPCI. Why? Because as a professional, instrumental in ensuring the success of your organisation’s payroll process, no one understands the on-going challenges of maintaining its accuracy and compliance better than you do. The GPCI report, published by NGA Human Resources and in association with the CIPP and other leading international payroll associations biennially, highlights significant changes in payroll legislations and laws since the last Index. It also ranks countries in order of complexity, highlighting those that have changed position and why this is. Over the past decade, the GPCI has become the go-to resource for payroll professionals needing to ensure absolute payroll compliance in one or more countries or regions. It is regularly referenced in the business case planning for organisations looking to simplify existing multi-country payroll process or that are expanding into new countries. As a member of the CIPP you will have received notification of the survey, with a link to complete via News Online . To thank you for your valuable contribution, we will forward you a complimentary copy of the 2019 Global Payroll Complexity Index on publication.
| Professional in Payroll, Pensions and Reward | March 2019 | Issue 48 10
CIPP update
2019 future of payroll report THE CIPP Future of payroll report 2019 is now available and can be accessed online at https://bit. ly/2CZhJkC. Now in its second year, the report has delved further into trends and technology enhancements which could impact on the future of our profession.
Future of payroll Research survey report 2019
TheCIPPs future of payroll report has beenmade possible through the collaboration of a high number of payroll professionalswithin the UnitedKingdom, and the support ofDatagraphic andWorkday.
Technology is advancing quickly, and payroll is embracing the advancements. People coming into our businesses have different attitudes towards pay, and that is influencing the way we pay people and the solutions we are looking to in order to automate payments. Terms such as ‘pay on demand’ and the ‘gig’ economy are becoming widely used and accepted, and this is challenging the traditional pay system. Whilst these things won’t change things overnight, they are certainly providing payroll with food for thought and ways of making their pay and reward package more attractive to the new employees entering the workforce. The changes to technology will also lead to changes in the skillset required of payroll professionals. Whilst software will enable more automation, the number of enquiries coming into the payroll department will not decrease, and payroll professionals will need to understand the calculations and legislation behind the software to answer these queries. The future of payroll will become more people focussed, and those working in the department will need to be educated, skilled and knowledgeable so that they can answer queries and support their organisation’s employees in understanding their pay and reward. Thank you to all of the payroll professionals who took the time to respond to this survey; your feedback and views have helped to shape the report and provide some context around the predictions. Thank you also to our sponsors, Datagraphic and Workday, who have provided their own insights into the future of payroll, specifically aligned with technology and payslip distribution. And a final thank you to Chartered Member Glenn Jones MSc FCIPD ChFCIPP, our contributing author, who has taken the time to analyse the results and provide insight to them. THANK YOU TOOUR SPONSORS
To appear on this page contact editor@cipp.org.uk
ACTIVPAYROLL APPOINTS LAWSON BRACKPOOL TOBOARD
ALEXANDERHOOTON ACIPP SPREADSHIS WINGS ALEXANDER HAS recently moved to a new payroll manager role at L3 Commercial Aviation which is a world leading pilot training provider based in Sussex for 600+ employees spread over several locations. With an energetic and hands-on approach, and keen to turn payroll from a function into a service for employees,
THE GLOBAL payroll and tax compliance specialist, activpayroll – which is headquartered in Aberdeen, Scotland – has appointed Lawson Brackpool to its board of directors. Lawson, who joins as group financial director based in activpayroll’s Edinburgh office, is a chartered management accountant with over 25-years’ experience in a variety of roles
and sectors, including energy, mining, media and publishing. The appointment comes after his crucial role in the group’s continued global expansion journey and helping with the opening of various international offices. Alison Sellar, chief executive officer of activpayroll, commented: “It is with great delight that we welcome Lawson to our Board of Directors. Lawson has already played a key role in the business and has helped the business achieve some big goals. Lawson shares our vision and drive for further growth and I look forward to seeing what the future holds with his seat on the board.”
Alex is looking forward to process analysis with a view to slim line, but most importantly to help current members of the payroll team develop their payroll careers. Prior to his new role, Alex spent eighteen months in a payroll manager role for leading pension software company Aquila Heywood, based in Redhill, Surrey. In addition to processing several manual payrolls for 200+ employees on a sole basis, he also provided support and guidance on the company pension schemes and benefits.
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| Professional in Payroll, Pensions and Reward |
Issue 48 | March 2019
Events Horizon
Full details of events and training courses can be found at cipp.org.uk or you can email info@cipp.org.uk for more information.
Scottish National Conference and Exhibition 2019 5 September 2019 | Dynamic Earth, Edinburgh We are delighted to announce the return of the CIPP’s Scottish National Conference on 5 September 2019. This prestigious event will be held at Dynamic Earth, a venue superbly located in the heart of Edinburgh’s World Heritage Site. Join us for a day full day of interactive and engaging workshops and seminars. This is your opportunity to hear from our guest speakers and learn all about the latest changes and developments in payroll, pensions and reward. In the evening you are invited to meet with other payroll professionals and celebrate National Payroll Week at a drinks reception in the Dynamic Earth galleries. To view the programme and book your place please visit www. cipp.org.uk/events or email us at events@cipp.org.uk .
National forums Exclusive to CIPP members*, the national forums are a perfect opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation. This event will also provide an excellent chance for you to network with other CIPP members.
Available dates:
Bristol
London
2 May
13 June
Belfast
Newcastle
9 May
18 June
Manchester
London
16 May
10 July
Cardiff
London
22 May
11 July
Glasgow
Birmingham
6 June
17 July
London
12 June
*applicable levels of membership only. Please be aware that lunch will not be provided.
Training courses
Course
Date *
Location
Course
Date *
Location
3 April
London
19 March
NEW – CEO pay ratio reporting
Employment status and modern working practices
All online
1 May 5 June
Bristol
22 March
Birmingham
4 April
Edinburgh
25 March
15 April
NEW COURSE – Computerised payroll level one
Belfast
26 March
Payroll and HR legislation update (50% off for members)
All online
15 May 14 June
London
2 April 5 April
Cambridge Edinburgh
15 April
10 April
NEW COURSE – Computerised payroll level two
15 May 14 June
All online
London
8 April
Manchester
12 April
P11D, expenses and benefits
Birmingham
15 April
London
12 March
Salary sacrifice and other optional remuneration arrangements
Birmingham
18 March
Dates are subject to change. More dates are available at www.cipp.org.uk/payroll- training-listing
Edinburgh
21 March
Can’t find a date or location for your needs? Let us know by visiting cipp.org.uk/trainingreg . New dates and locations may be added if there is enough interest.
Have you considered in-house delivery of training courses?
The full list of CIPP training courses can be found at cipp.org.uk/training
| Professional in Payroll, Pensions and Reward | March 2019 | Issue 48 12
Career development insight
Achieving full potential
Giulia Remondino, managing director of Genius in 21 days UK, discusses what you can do I f every individual who works with you was able to show their full potential,
is that a lack of clarity of thought doesn’t just appear in presentations and exams, but also in every task in which we know we will be judged. So many people have shared how anxious they feel when they need to write an email to someone more senior, or when they need to take care of part of a project where a manager will have the chance to assess them. When we are in front of someone who could examine our work, our confidence reduces because we feel more exposed. Promoting a culture in which people feel comfortable making mistakes – even though we initially may feel resistant to it – will create an honest environment in which employees will not be afraid to show their own talents and add value to the team, rather than fearing judgement and only doing what is extremely easy or comfortable. See tip 2. ...create an environment where any seed can bloom Managers but not leaders When someone takes on a leadership role, this usually occurs because of the competence they have shown in their previous role, but the skills required to lead a team are not the ones that are required to be promoted. It may sound obvious, but the number of managers who struggle managing a team shows that too little time is allocated to train them as leaders. There are many investments in hard-skill training (updates, regulations, information required, etc), and while these are important, they shouldn’t become the reason not to invest
in soft skills training. Becoming a good leader requires more than just a few hours – it’s a journey. If companies understood the business advantage in creating a company of leaders, rather than managers, I am sure they would spend time every week to raise the leadership level of their employees. See tip 3. n Tip 1: Use the Pomodoro technique. Break your work into sessions of 25 minutes of intense work followed by a break of 5 minutes. Once this has been repeated four times, allow yourself a longer break (30 minutes). This will keep your mind on the work you need to do, while allowing you to recharge during the breaks. Focus on keeping breaks ‘intense’ too – switch off 100% so it’s forbidden to think about work. Tip 2: When you receive feedback on your work, instead of getting upset or sad, focus on the fact that you can become better by learning from it. The only way to speed up your growth is to be ready to receive as much feedback as possible. On the other hand, if you are giving feedback, make sure you talk about the work and not about the person, so that the individual will not feel attacked and will be more prepared to take on your suggestions. Tip 3: If your company doesn’t invest time in leadership training, read a number of books about it, apply and try on your own until you find the style that suits you. You could observe whether people bloom or regress when you manage them; be open-minded and ready to change if need be.
your business would flourish. The reality is that there are many underlying issues often overlooked; below are three of the most important ones that need addressing. It is challenging to implement all these aspects, but at the end of every challenge lies a reward and to get it we need to be willing to adjust the culture in order to create an environment where any seed can bloom. Ineffective time management We often hear things like: “I have too much stuff on my plate”, “I am behind”, “I’ll stay late to meet this deadline” and so on. Actually, we hear it so often that it becomes normal. But it shouldn’t be the norm to be exhausted by too much work; to have so many things that require our attention that we don’t know where to start; to go home thinking our day hasn’t been productive; and keeping our mind on work when we are spending time with our loved ones. How can you prioritise tasks and maintain a clear vision of the big picture whilst being aware of all the little details, avoiding distractions and keeping your eye on the ball, even when tired or bored? Learning how to plan strategically is the first step. Being able to raise your efficiency whilst working on each deadline is the second. Learning how to remove distractions in order to be completely focused on what you are doing will complete the circle. See tip 1. Fear of making mistakes Most people fear presentations because of the nervousness they will feel when in front of the audience. The interesting thing
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Issue 48 | March 2019
| Professional in Payroll, Pensions and Reward |
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