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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
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