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in September 2018. They were paid this as a payment after leaving (PAL). However, in June 2018, when the employee reached SPA, we processed the PAL bonus payment and applied class 1 NICs under category A. The ex-employee has been in touch and queried this. Should we have applied category C, instead? If so, should we refund the difference in primary NICs to the former employee? A: If you have verified the employee’s date of birth (DoB) and can clearly see that they were at SPA when the payment was processed, then yes you should correct the NICs position in the next available full payment submission and generate a NICs refund for the ex- employee. The key here is that category C NICs were due as on pay day they were above SPA – so you should have changed the NIC category in the payroll at the time of processing. Q: In our organisation we pay six months’ sick pay at full rate, followed by six months’ sick pay at half rate. We have an employee who has been sick for seven months; so has used all their full pay entitlement and some of their half pay. I didn’t send a form SSP1 after 28 weeks as we didn’t pay SSP as such because the employee was receiving full pay. When should the SSP1 form have been sent? A: Regardless of whether you only pay SSP or company sick pay and this incorporates the SSP element, you should still have sent a form SSP1. It is issued at weeks 23/24 in anticipation of them receiving 28 weeks of SSP. The following link may be helpful https://bit.ly/2wnl1Lg. Q: An employee will be seconded to a temporary role for approximately eight months so will fall under the temporary-workplace-for-a-limited- duration provision. The temporary workplace is a long way from where they normally live and work and it’s not a commutable distance. For the company to put them in a hotel is proving to be very expensive, so therefore we are looking into a short-term property rental. Please can you advise the implications of this arrangement, as I
have looked on the HMRC website and cannot find enough information about this subject/scenario? A: HMRC’s Employment Income Manual states that this is an allowable element if the employer provides an employee on secondment at a temporary workplace with furnished or unfurnished living accommodation. This guidance explains what limits should be placed on the relief under section 338 of the Income Tax (Earnings and Pensions) Act 2003 for the cost of living accommodation. The main criterion is that the cost should be accepted as reasonable where the total cost of providing accommodation does not exceed the cost of hotel accommodation of an appropriate standard. The guidance can be found here: https://bit.ly/2wqwppH. Q: An employee has had their corporate credit card stolen. Contractually the onus is on this person to repay any amounts charged to the credit card, which now means our employee owes the credit card company a significant amount. As the employer we would like to assist as much as we can and wondered whether we could process a loan of £1,500 via the payroll which the employee can repay over a six-month period from their net pay. Would this be deemed as an interest free loan similar to that of a season ticket loan as it is under the threshold of £10,000? A: Yes, this is perfectly acceptable, as the employer can lend an employee money so long as the value or combined values of other loans do not exceed the £10,000 limit set by HMRC. If this limit were exceeded, it would be a beneficial loan and reported in a P11D return. n
Payroll Assurance Scheme Don’t wait until it’s too late
With penalties for non- compliance of up to £10,000 per day, can your business afford not to be CIPP Payroll Assurance Scheme accredited.
For more information: Visit: cipp.org.uk/PAS Email compliance@cipp.org.uk Call: 0121 712 1000 Live chat with us
cipp.org.uk @CIPP_UK
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Issue 44 | October 2018
| Professional in Payroll, Pensions and Reward |
*correct at time of publication
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