MEMBERSHIP INSIGHT
This piece of legislation now means that regardless of an employee’s age and if all of the eligibility requirements for SSP are met then SSP would be paid and processed in the same manner as an employee regardless of whether they had reached SPA. Q: I would like clarification on the following. There used to be a rule whereby when a new employee gave their employer form P45 from their previous employment; the procedure required a manual check had to be performed that the tax deducted was accurate for the taxable earnings. If there was a discrepancy you were to use the correct tax deducted figure that you had calculated instead. Is this still the case? A: Yes, I can confirm that this is still the correct procedure: you would need to check the P45 and amend the figures if they are incorrect. HMRC state (see https://bit.ly/2NkBxDa) that you should “Use your employee’s P45 to work out their tax code and update their details in your payroll software. If your employee left their last job after 5 April 2018, you should also update both the ‘total pay to date’ and ‘total tax to date’ fields in your payroll software for the first week you included this information. If your software finds errors, update the fields with the correct figures.” Q: An employee who is currently on statutory adoption leave (SAL) and statutory adoption pay (SAP) has informed us that she is no longer the carer of the adopted child. Can I assume that I would need to end the adoption leave from the date the adoption ended or is it similar to maternity leave and pay and the SAL and SAP continue for the full 39 weeks? A: I can confirm that the HMRC guidance states that if the child ceases to live with the adopter during the SAP period, the pay period will end eight weeks after the end of the SAP pay week in which the child stops living with the adopter, if it wasn’t due to end earlier. Therefore, in the situation you describe, the employee’s SAP would end eight weeks after the date the child was removed out of the adopter’s care. Q: We have an employee who left our employment back in March 2018 and is now due their backdated bonus
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Advisory
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Q: We have an employee who is going on a business trip and the company would like to pay the cost of the spouse accompanying this employee on the trip. Would this be a reportable benefit in kind? A: Where the spouse/partner does not contribute to the business trip (i.e. only going for a holiday) then it will be a reportable benefit in kind against the employee. Tax relief can occur where the spouse has practical qualifications directly associated with the purpose of the business trip, or if the employee’s health was so poor that it would be unreasonable to expect them to travel alone. Q: My colleague and I have recently read that class 1 primary and secondary National Insurance contributions (NICs) are payable on mileage payments when they exceed the 10,000-mile threshold set by HM Revenue & Customs (HMRC). Is this correct? A: The 10,000-mile threshold refers to the amount that can be paid under the mileage allowance payments exemption. The tax rules provide that if the business mileage exceeds 10,000 only 25p can be paid tax-free, so if you pay the employee more you would have to report the excess per mile in the P11D return for tax purposes at box E. However, the NICs position is different: if no more than 45p per mile is paid (even if the mileage exceeds 10,000) no NICs will be due on the payment. If 45p is exceeded you would pay the excess through the payroll as NICs could be calculated and deducted from this.
Q: My question is regarding post employment notice pay. We have an employee who will cease employment on 31 July 2018 with no contractual notice period. Their pay period runs from the first to the last day of the month. They will receive normal salary for July but my question is regarding the ‘P’ element in the statutory formula: will the P equal 31 days for July, as their last pay period; or is P 30 days for June, as this was their last pay period? A: The ‘P’ is the number of calendar days in the employee’s last pay period ending before the trigger date. If there is either a contractual or statutory notice period, the trigger date would be the last day of employment, and you would use the number of days in the June period. Please find below links to GOV.UK which may be of further help to you. ● https://bit.ly/2MwVzxQ, which provides details on P calculation ● https://bit.ly/2NnGXNH, which provides an example of a termination payment that includes different elements e.g. redundancy, compensation, bonus or pay in lieu of notice. Q: Can you please help with a debate we are having over statutory sick pay (SSP) when an employee is in receipt of state pension. My understanding is that if an employee has reached state pension age (SPA) they are not entitled to receive SSP. Is this something you can confirm? A: I can confirm that there used to be an upper age limit of 65 for the receipt of SSP but this was removed several years ago when the Employment Equality (Age) Regulations 2006 were introduced.
| Professional in Payroll, Pensions and Reward | October 2018 | Issue 44 6
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