MEMBERSHIP INSIGHT
staff payroll – 70% ❍ new payroll but with the same PAYE reference as the main staff payroll – 20% ❍ new payroll with a new PAYE reference – 10%. If this subject has somehow missed your radar, and it affects your role, again all the relevant information can be found hourly pay entitlement – The Low Pay Commission (LPC) recommended in its National Minimum Wage Low Pay Commission Report Spring 2016 (http:// bit.ly/2jYU4Jb) that the Government review the current obligations on employers regarding provision of payslips and consider introducing a requirement that payslips of hourly-paid staff clearly state the hours they are being paid for (see ‘Enabling Enforcement and Improving Awareness – Better Hours Information’). The report said that a cross‑cutting problem impeding workers bringing national minimum wage (NMW) cases, and HMRC enforcing the minimum wage, is uncertainty regarding the hours for which they are being paid. This issue was raised in written and oral evidence and during the LPC visits around the UK in 2016. According to previous research, under-recording of hours is a particular issue in NMW compliance for apprentices (in relation to recording training hours) and in social care (in relation to travel time). At oral evidence, UNISON argued for clearer pay statements, so that workers could be assured they had been paid at least the national minimum/living wage. This statement would set out information on how pay had been calculated – especially the critical area of hours – and demonstrate how it was NMW compliant. Both UNISON and the GMB highlighted section 12 of the National Minimum Wage Act 1998 and urged the Government to use its provisions. UNISON called on the Government to make regulations as provided for under that section requiring employers to provide their workers with a statement demonstrating compliance with the NMW. The GMB said employers should provide workers with a written NMW statement in order to assist the worker to determine whether they have been remunerated at a rate equal to or above the NMW. However, in our CIPP Policy News Journal . ● Payslips should contain hours worked for easier calculation of
case you may not have been focussing on the detail of the consultation because you do not enter in to salary sacrifice arrangements. The draft Finance Bill 2017 refers to such arrangements (including salary sacrifice) as ‘optional remuneration arrangements’, and whilst a technical consultation is ongoing, it is clear that where there is an element of choice between cash or a benefit in kind (BiK), it is likely to be captured under the new rules due to begin from 6 April 2017. A common example could be the provision of a company car, but the employer offers a cash allowance in the event the employee chooses to provide their own car for business purposes. Where the cash allowance is taken there will be no impact as a result of the new rules; however, once the new rules take effect the taxable value of the benefit will be the higher of the current value of the BiK or the cash foregone. At the time of writing guidance is expected to be published by HMRC at the end of January to help us all to understand how these new rules will be applied. If you have any views, thoughts or concerns that you would like us to raise, please contact Samantha Mann at policy@cipp.org.uk. If you have been overlooking this subject because you don’t operate salary sacrifice, but you do offer a cash alternative to some/all BiKs, you might want to review all current publications; full details are available through the CIPP Policy News Journal (http://bit. ly/2jdXT9e) under ‘General expenses, benefits & reward news’. CIPP quick polls ● If you could choose your Christmas reward…what would it be? – Our poll revealed that the majority would opt for a taxable cash equivalent of a Christmas party/meal. We ran a festive poll in the lead up to Christmas where we asked what would you choose if you were given a choice of the following: christmas party/meal, taxable cash equivalent payment, or equivalent donation to charity. There were 648 respondents. Only 14% opted for a donation to charity, whereas 56% went for the taxable cash equivalent – bah humbug, or just plain practical? Is the staff Christmas event not
as popular as it once was with just 30% choosing this option? But then some employers aren’t necessarily in a position to provide any reward at all. ● How are you planning on processing your IR35 workers? – Originally announced at Budget 2016 and then at Autumn Statement 2016 and following consultation over the summer, the Government will legislate in Finance Bill 2017 to reform the off-payroll rules (often known as ‘IR35’) in the public sector from 6 April 2017. The rules remain unchanged for the private sector. ...taxable value of the benefit will be the higher of the current value of the BiK or the cash foregone Responsibility for operating the off- payroll working rules, and deducting any tax and National Insurance contributions due, will move to the public sector body, agency or other third party paying an individual’s personal service company (PSC). The 5% tax-free allowance for general business expenses, available to workers currently applying the rules, will be withdrawn for PSCs working in the public sector. This will simplify administration and reflects the fact that PSCs no longer have responsibility for applying the rules. Public sector bodies will be responsible for determining whether or not the rules apply and will be required to share this information with agencies in order for them to operate the rules correctly. To address concerns about acting in good faith on incorrect or false information, transfer of liability provisions will be introduced to provide protection. Public sector bodies in scope are those subject to the provisions of the Freedom of Information Act 2000 and the Freedom of Information (Scotland) Act 2002. In light of these changes we ran a poll in January asking public sector payroll professionals how they are planning to process their IR53 workers. At the time of writing the poll was still running but the results showed as follows: ❍ adding IR35 workers to the main
| Professional in Payroll, Pensions and Reward | March 2017 | Issue 28 6
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