MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q: When parental leave is shared between both parents, must both parents be employed by the same company to be eligible to shared parental leave? A: No, the employees do not have to work for the same employer as eligibility for shared parental leave (SPL) and shared parental pay (ShPP) is tested independently for each employee. If the parents will share responsibility for the child at birth and meet the criteria to be entitled to either statutory maternity leave, statutory adoption leave or statutory paternity leave (as applicable), they can choose to request SPL and ShPP. Requests should be made in writing to each of the affected employers, and there is no requirement to communicate with the other employer involved to check the entitlement of your employee’s partner. For reference, see: https://bit.ly/3kICvMl. Q: Our company office has relocated following the closure of our current site as we could not maintain running costs due to the pandemic. As the office is located a further 38 miles away, we would like to reimburse the cost of the additional travel to assist staff with the relocation. Is there a time limit on how long we can assist the employees with this additional cost, and can we make the payment tax and National Insurance (NI) free? A: If an employer chooses to reimburse this additional cost to employees, in all cases, it would be subject to tax and NI contributions (NICs), as it would be regarded as ordinary commuting. In effect, the employer would be providing employees with a travel allowance which is processed via pay as you earn (PAYE) as earnings.
Q: My client has asked what the implications are for giving their
one if they believed a refund was due. For reference, see: https://bit.ly/3zMFNTl and http://ow.ly/WqNf30rZiOV. Q: Please could you clarify the following? If an employee is on a zero- hour contract, are they entitled to 5.6 weeks holiday per year irrespective of the hours they work? The employee in question has only worked ten hours a week for eight weeks in the full twelve- month period. Please can you advise on the correct calculation? A: Where there are no contractual hours of work and an employee remains on the payroll for a full leave year, they are entitled to 5.6 weeks’ holiday regardless of the hours they work. As this employee has no normal hours of work, entitlement cannot be expressed as anything other than weeks and they are entitled to 5.6 weeks’ worth of pay at their normal remuneration levels. The Working Time Regulations 1998 refer the calculation of a week’s pay for the purpose of annual leave to sections 221- 224 of the Employment Rights Act 1996. Essentially, a week’s pay is the contractual remuneration due to an employee for working their normal working hours in a week, however, special rules apply for those employees who do not have a normal working week, such as employees on zero-hours contracts. An employer must base the rate at which holiday pay must be paid upon the average pay received in the previous 52 weeks, as per the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 No 1378. Please see: https://bit. ly/3icfK1Q. If there is no pay in a week, an employer must ignore that week and bring in an earlier week, up to a maximum reference period of 104 weeks. If the employee
employees either a cash payment of £50 or a voucher worth £50 as a thank you for all the work they have completed during the pandemic. Can you advise on both methods? A: There is only one option where a cash payment is made, and that is to treat it as earnings and process through payroll for the purposes of tax and class 1 NICs. If you provide a non-cash voucher this is classed as a benefit, however, the amount is a reward for the employee’s performance so it will not be eligible for the trivial benefits exemption. Non-cash vouchers must be reported for tax and class 1 NI as follows: ● report the value on the P11D for tax and collect the class 1 NICs through the payroll at the time the voucher was provided ● if registered for payrolling benefits prior to 6 April 2021, add the cost of the vouchers to the employee’s earnings for tax and class 1 NI. Alternatively, the employer could settle the tax bill on behalf of the employee via a PAYE settlement agreement (PSA). For reference, see: https://bit.ly/3EUKVII. Q: An employee is due to begin a period of unpaid leave. Our payroll provider has told us we need to put this employee on hold to prevent any tax refunds being paid. Should we be paying the tax refund? A: This question can be answered by referring to Regulation 63 (1) and 63(2) of the Income Tax (Pay As You Earn) Regulations 2003. Here, it confirms that, if an employee were on a cumulative tax code, they would not be automatically entitled to a tax refund, but the employee or their personal representative could request payment of
| Professional in Payroll, Pensions and Reward | November 2021 | Issue 75 6
Made with FlippingBook - Online magazine maker