MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Attachable earnings and statutory payments
A: A Northern Irish citizen can be added to a UK payroll as you would for any of the other home countries. The tax and National Insurance (NI) treatment would be the same as if the person lived in England, with no ‘special’ tax codes like there are for Scotland and Wales. There are, however, some devolved areas for NI, such as the reference period for holiday pay (12 weeks used for average weekly earnings instead of 52). Critical illness cover Q: Does critical illness cover count as a benefit in kind (BiK)? I believe so as the employer is paying the premium on behalf of the employees. Also, the employer has already registered to payroll healthcare benefits. Would this be included in that, or would they need to register again for critical illness? A: If an employee receives something from an employer which isn’t ‘cash’, and the only reason they receive this is because of their employment, it would be a BiK. Therefore, the critical illness cover would be a BiK. If the critical illness cover is offered separately to the healthcare benefits, you would need to register separately for the critical illness cover.
Charity contributions and NMW Q: Are there are any implications we should consider in setting up a regular monthly deduction (net deduction) from employees’ pay to collect donations for a business chosen charity? We sometimes have ad hoc charity events where raffle tickets are bought via deduction from salary. Should this deduction be included in the national minimum wage (NMW) calculation? A: As this would be a deduction to a business charity, it could be deemed a deduction for the employer’s own use or benefit, which would reduce NMW pay for calculation purposes. To ensure you remain compliant, view the legislation here: https://ow.ly/ cSJq50T3Hz6. This guidance may also be helpful: https://ow.ly/PfnS50T3HzU. Showing SSP on a payslip Q: An employee who received SSP while off sick has exceeded their sick allowance. They have returned to work and management has now informed me that they should have been paid in full while off. Can you please advise how I correct / reverse the SSP payment? Should I just change the absence record in our payroll system? A: If this person was still absent, but just due full pay, keep the sickness in the absence record and then calculate what ‘top up’ they need to take them to full pay. You would always keep the SSP element of sickness, even if company sick pay pays 100%. This is because, if the absence was to run long term and
Q: A female employee is starting maternity leave this month and she has a Child Support Agency (CSA) attachment on her wages. Am I correct in thinking we can’t deduct the CSA payment from the statutory maternity pay (SMP), but can deduct from the company maternity pay that we pay from week seven to week 12? Would the CSA deduction only be deductible
on the amount that we, as the company, top her wages up by?
A: : Your thinking is spot on! Contractual maternity pay is attachable, but SMP is not. The only statutory payment that counts as earnings for attachment of earnings is statutory sick pay (SSP). Please see the following guidance: https://ow.ly/ umx550T3Hhq. Your software should be configured not to include SMP in the CSA payment calculation.
How should CSA payments be deducted from maternity pay?
Employees in Northern Ireland Q: Can citizens of Northern Ireland be payrolled onto a UK payroll as though they lived in England, Scotland or Wales?
Does critical illness cover a BiK?
| Professional in Payroll, Pensions and Reward | October 2024 | Issue 104 8
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