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regard to GPG reporting? A: The definition includes the following elements: ● basic pay ● allowances including payments for duties that are ‘ancillary’ to the employee’s main duties, such as for the role of fire warden, the employment’s location, the purchase, lease or maintenance of a vehicle or other item, recruitment or retention of the employee ● pay for piecework, means pay for work that is calculated by reference to the number of pieces made or processed, or tasks performed, rather than the number of hours worked ● pay for leave, which means annual leave, child-related leave (maternity, paternity, adoption, parental and shared parental leave) and sick leave, and includes ‘special leave’, which forthcoming guidance may explain in more detail ● shift premium pay, which is the difference in pay between basic pay and any higher rate paid for work carried out at different times of the day or night. Q: My question relates to a male employee who reached state pension age (SPA) on 26 May, which would have been his usual pay day. However, as the 26th falls on a Saturday in May the pay day would be moved to the 25th. In this situation what NI category should be used for the May salary: category A or C? A: The change of pay day will affect the NI category, as pay day is Friday 25th and he is not of SPA, NICs will be due on any pay earned in May, therefore you cannot change the NI category until the June payroll run. It is always the age the employee is on pay day that drives the NIC category. Also remember there will be a new sliding scale for men (and woman) reaching 66 for SPA. So for men it will be the age of 66 for birthdays from 6/12/53 onwards; please see the following: https://bit.ly/2tKHuBz. Q: We have four employees currently resident in and paid in the UK who will be moving to work in Canada for another entity of our business. They will no longer be classed as UK residents as they will sign new contracts for our company based in Canada and be paid on the Canadian payroll. I am seeking
clarification on their eligibility for relocation costs and if so whether there a limit applicable to them? A: As your employees will no longer be UK residents and are emigrating to another country to both live and work, this cannot be called a true relocation. As the employees will no longer be UK residents, they will no longer have any liability to income tax or NICs. Therefore, as this is not relocation, there will be no relocation allowance awarded to them. The following is an extract from the guidance and a link: “If there is a continuing liability for UK NICs in respect of a person who relocates abroad, any relocation allowances paid remain subject to the same conditions as an employee relocating within the UK.” (https://bit. ly/2A7vO18) Q: Can you offer some guidance on how intercompany transfers should be treated within an organisation? A: If a company runs several Pay As You Earn (PAYE) schemes and an employee moves from one scheme to another, they are technically (and in the eyes of HMRC) starting a new employment with a separate legal entity. This is because each PAYE scheme is its own legal entity in its own right. If an employee had an internal move which meant that they were now paid on a different PAYE scheme they would have to become a new employee on the new PAYE scheme. You would also have to make them a leaver on the old PAYE scheme, producing a P45 form and advising HMRC that they are no longer employed by this PAYE scheme. If after leaving there are any monies owed, this would be processed as a ‘payment after leaving’ on the old PAYE scheme. Another issue to be aware of when transferring a person between PAYE references (in a non TUPE situation) is that continuity of earnings history might be lost which could affect, for example, entitlement to statutory payments. The employee may have a continuation of service for the ‘company’ itself, but as far as HMRC are concerned by moving from one PAYE to another they are in fact starting a new employment. There are no links that support this as HMRC see things very simply, you are employed under one PAYE, if you move PAYE you have left that ‘company’ and have started employment with a new one. n
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Issue 43 | September 2018
| Professional in Payroll, Pensions and Reward |
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