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an employee needed to apply for state funded sickness benefits, they would look at when SSP began. This should be from the start of the sickness period, taking into consideration waiting days etc. The fact that they’ve returned to work wouldn’t make a difference. If you look at last month in isolation, review what should have been paid, versus what was paid, and pay the difference this month.
pension scheme providers will require the employers to keep records longer under the terms of that scheme, as they quite often revisit past years to calculate their benefits. You will need to check with the pension provider to see if they have requested records be kept longer when the employer joined the scheme. See: https://ow.ly/aYgP50T4HcZ.
How long should records be kept?
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How can sick pay amounts be corrected?
Holiday pay calculation Q: What’s the best calculation for holiday pay? My staff receive a salary, and some do overtime. Do I work out the additional holiday hours due on the overtime then pay them at an average hourly rate over the past 52 weeks? A: The employee is entitled to 5.6 weeks per annum, the calculation of which is dependent on the contract of employment. So, it will be in hours, days or weeks, over the previous 52 weeks average. This will collate any overtime or regular pay the employee has received, that is intrinsically linked. If the employee is on a salary, they have already received the holiday pay; therefore, the consideration is only the holiday pay top up based on the overtime. Calculate the overtime earned in the previous 52 weeks / 52 this will give the weekly normal pay averages of the overtime and the employee’s salary will need to be topped up with that averaged amount. For any week where no pay was received then the employer must disregard that week and extend the reference period back another week. The maximum reference period is 104 weeks, and if less than 52 weeks of data exists then employers should use what they have and divide by those number of weeks to achieve an average. The HMRC legislation can be found here: https://ow.ly/RYpy50T4Hlh. n
Voluntary payrolling benefits Q: With mandatory payrolling benefits coming in from 2026, can companies sign up to this sooner? A: Yes, a company can register for payrolling benefits through its HMRC online account. The registration deadline is 5 April, so you wouldn’t be able to payroll benefits in 2024/25 but could register in time for the 2025/26 tax year. Record retention Q: How long do we need to keep paper versions and / or any scanned copies of our drivers’ timesheets? A: There are different rules for retention. The retention period under The Income Tax (Pay As You Earn) Regulations 2003, states you must keep pay as you earn (PAYE) records for three tax years after the end of the year to which they relate but HM Revenue and Customs can ask to go back six tax years. This includes all PAYE records. See: https://ow.ly/rMKu50T4kwc. There are slightly different rules regarding records for NMW, which is six years. See: https://ow.ly/jCbx50T4kJK. The Pension Regulator states that pension records regarding contributions paid to the pension scheme must be kept for at least six years. However, other types of records must be kept if they remain relevant for the scheme to operate. Some
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| Professional in Payroll, Pensions and Reward |
Issue 104 | October 2024
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