MEMBERSHIP INSIGHT
occupation under schedule 1 of the Apprenticeships, Skills, Children and Learning Act 2009 and studying one of the courses within the framework, or ● where the individual is an athlete who has completed an elite sports framework in respect of a sport specified in schedule 2 of the Regulations with a view to participating in the olympics, winter olympics, paralympics, or commonwealth games. Q: Does an employer include the earnings of an employee who is under age 16 years when calculating the annual pay bill for the apprenticeship levy? Also, how would you approach the situation when the employee turned 16 part-way through the pay period? A: Firstly, the employer would not include earnings for employees who are under 16 years old, and if an employee is paid monthly, then it is dependent on when the employee reaches 16 as to whether the earnings should be included. If on payday the person is 16 years of age, the whole earnings will attract Class 1 NICs which means they would be included in the employer’s pay bill calculation. If the employee is not 16 years old on payday then no NICs are due on these earnings and they will not be included in the calculation. Further guidance can be found in the software developer’s guide on the apprenticeship levy which can be found via the following link: https://goo.gl/kShkfG. Q: We are a private/independent school and we would like to know if the new salary sacrifice legislation will affect us as we currently offer an arrangement for school fees. A: Yes, these changes will affect all employers; but if a salary sacrifice agreement is already in place as at 6 April 2017 for school fees, then the arrangements will be ‘grandfathered’. This means that any employee who has already entered into an agreement to salary sacrifice for school fees prior to 6 April 2017 will be able to benefit from the tax and NICs advantages until renegotiation, revision or renewal, or by 6 April 2021 whichever is the sooner. A summary of responses to the Government consultation and changes on salary sacrifice and provision of benefits can be found via the following link: https://goo. gl/CmPAbr.
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m.
to 4.30p.m. on Fridays. It is free to all CIPP members * , students and attendees of approved CIPP courses and conferences in the last six months. Call 0121 712 1099 , email advisory.service@cipp.org.uk or visit cipp.org.uk for frequently asked questions.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: An employee (the partner) has requested shared parental pay and leave (SShPP/SShPL). The mother is self-employed and although she is taking 27 weeks of maternity leave, she is not exercising her right to claim maternity allowance (MA). The employer has informed the employee that he is not entitled to SShPP, only SShPL, but the employee is disputing this. Can you offer advice? A: The legislation covering SShPP and SShPL is found in the Statutory Shared Parental Pay (General) Regulations 2014, the Shared Parental Leave Regulations 2014 and section 35(3A) of the Social Security Contributions and Benefits Act 1992. For the partner (the employee) to be eligible to receive SShPP s/he and, in this case, the mother must satisfy all relevant criteria. Where the mother is self- employed, one of the criteria is that she must be receiving MA. It isn’t enough that the partner has satisfied the earnings test; the mother must curtail her payment of either statutory maternity pay (SMP) or MA for her partner to have any entitlement to SShPP. By curtailing her right to SMP or MA the mother would pass that right to the partner; therefore, the partner is only entitled to SShPL and not SShPP. As a self-employed person the mother would need to satisfy the earnings test, which is that she must have been an employed or self-employed earner in Great Britain for a total of 26 weeks (not necessarily continuously), in the period of 66 weeks leading up to the week in which the child is due, and must have earned an average of £30 a week in thirteen of those
26 weeks (not necessarily consecutively). HM Revenue & Customs (HMRC) have published further guidance which can be located via the following link https://goo. gl/b6pRSx. Q: Can you confirm whether salary sacrifice would reduce the earnings subject to Class 1 National Insurance contributions (NICs) which are used when calculating the apprenticeship levy? A: We confirm that the apprenticeship levy is based on the total amount of the employee’s earnings subject to Class 1 NICs. So, if an employee’s salary or wage is reduced by the employee entering into a salary sacrifice arrangement then yes the NIC-able pay will be reduced when calculating the apprenticeship levy. Q: We run a payroll bureau and a client is asking whether an apprentice can be self-employed. Please advise. A: An apprentice cannot be usually self- employed unless the individual comes under the Apprenticeships (Alternative English Completion Conditions) Regulations 2012 (‘the Regulations’); otherwise the individual would have to be an employee. The apprenticeships common funding rules and paragraph B9 in particular explain that normally funding is only available where an apprentice is an employee. To access the apprenticeship common funding details please use this link: https://goo.gl/m5YS2X. To check whether the Regulations should be applied for your apprentice please refer to this link: https://goo.gl/ ox95Br. The Regulations apply: ● to individuals who were in a specified
| Professional in Payroll, Pensions and Reward | March 2017 | Issue 28 8
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