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
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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
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