in Payroll, Pensions & Reward PROFESSI NAL Official publication of The Chartered Institute of Payroll Professionals Issue 91 June 2023
Time to shine A team of leaders in the industry discuss how to elevate the payroll profession
TAMD?! What’s TAMD? Read all the payroll-related updates from tax administration and maintenance day
The generation game Does payroll need a rebrand to attract younger generations to the industry?
Payroll’s role in financial
well-being
CIPP UPDATE POLICY HUB PERSONAL DEVELOPMENT
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26
If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. Edmund Burke
Editor’s
comment
32
Sadly, recently a day hasn’t gone by when I’ve not heard reference to the cost-of- living crisis, whether that be in the media or during conversations with family,
friends or colleagues. There’s no denying that times are tough at the moment, with inflation still sky high and the economic impacts of the pandemic still being felt.
But rather than focussing on the negatives, let’s consider how we can all cope during this period of economic turbulence, which thankfully, won’t last forever. Payroll professionals are uniquely positioned to help individuals to boost their financial well-being. They deal with pay day in, day out, and it’s essentially their bread and butter. So, how can payroll help? Well, this entire issue is dedicated to answering that precise question. Hopefully you’ll get some food for thought as to how you can assist employees in your organisation. Turn to our feature topic on page 32, to read the thoughts of our panel of experts on ‘ payroll’s role in financial well-being ’. Further consideration of how payroll can assist employees with financial well-being is presented in a range of articles across the magazine, including on pages 26 and 40. Here, you can read some thought-provoking pieces which could cover areas you may not have previously considered. As the world of payroll never sits still, of course we couldn’t wrap this issue up without mention of tax administration and maintenance day (what a mouthful!). Flick to our hot topic article on page 56 to read all about the consultations and calls for evidence which could impact on the payroll profession and, of course, you, in your role.
40
Lora Murphy MCIPP (editor@cipp.org.uk) Editor
56
26 - How can employers ensure they provide financial support to all staff? By David Yewdall 32 - Feature article – payroll’s role in financial well-being By Jerome Smail 40 - Payroll: making an impact By Anna Buckle 56 - Hot topic – tax administration and maintenance day By Mathew Akrigg
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| Professional in Payroll, Pensions and Reward |
Issue 91 | June 2023
Chair’s
Chief executive officer Ken Pullar FCIPP CIPP board of directors Clare Warrington MSc FCIPPdip AFHEA Louise Gray ChMCIPPdip Stuart Hall MCIPPdip Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA (Hons) FCIPP Brendan Mulkern FCIPP Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP Cliff Vidgeon BA (Hons) CMA ACG ChFCIPP Editor Lora Murphy 0121 712 1018 | lora.murphy@cipp.org.uk Advertising Daniel Cull 07795 652645 | advertising@cipp.org.uk Design James Bartlett and Nicole Davis design@cipp.org.uk Printing Acorn Press Ltd
message
Here we are, in June’s issue, and the summer has started to arrive with lighter nights and warmer temperatures. The sun on our faces builds vitamin D and lifts our mood. As payroll professionals, we hold the responsibility for people’s pay and we need to get this right first time to help eliminate any anxiety for employees. Financial well-being is on the agenda in most organisations, as household bills rise and some of our employees struggle to provide the basics for their families. So our focus this issue is what payroll can do to support employees with well-being. From automation to technology, using less human intervention reduces risk of errors and gives back the time required to do more checking on the payroll. Time savings also help free resource to look at new incentives such as pay on demand functionality and educating our workforce on the well-being help available. Remember, as a member you have many benefits at your fingertips which can help you with new incentives, advice and networking opportunities.
Clare Warrington MSc FCIPPdip AFHEA (clare.warrington@cipp.org.uk) Chair, CIPP
CEO’s
message The CIPP board recently met with the CIPP’s senior leadership team (SLT) to review the rolling strategic vision for the CIPP and its subsidiary, IPP Education. This was also to monitor the progress from strategic meetings held in earlier years, as previous actions identified as short-, medium- and long-
Useful contacts
Education education@cipp.org.uk 0121 712 1023 Events events@cipp.org.uk 0121 712 1013 General enquiries enquiries@cipp.org.uk 0121 712 1000 Marketing and sales marketing@cipp.org.uk 0121 712 1033 Membership membership@cipp.org.uk 0121 712 1073 Training training@cipp.org.uk
term are still in progress. This is carried out based on how we can continually improve our service offerings to the full membership base, considering what the world of payroll, pensions and reward will look like in the future. This is something we carry out annually and with some detailed preparation and input from the SLT and the board. This is helped with regular input from all levels of membership, through the Market Insight Survey , the Future of Payroll Survey and special interest group input. It can also be informally, direct from members, whose input contributes to the strategic direction of the CIPP. Key strategies set out in earlier years continue to be reaffirmed and in most cases are now standard ‘business as usual’ items for the various teams within the CIPP: l growing membership and brand awareness (membership) l leading innovation and engaging certified solutions (qualifications) l providing knowledge and skills to practitioners (training) l providing governance and advice to all payroll professionals (governance). A key focus for the CIPP is equality, diversity and inclusion (EDI). We’ve been working with an external agency over the last few months to assess where we currently are and to make recommendations to the board. The board has determined a direction of travel and communications will be issued over the coming months as to how EDI weaves across activity with the board, employees, members, students and the wider payroll, pensions and reward professional landscape. This is my final chief executive officer (CEO) message. I’m delighted to welcome your new CEO, Jason Davenport who will start on 1 July. I shall be around in a supportive capacity until autumn, as and when required by Jason. It’s been a pleasure serving as your CEO for the last seven years and has been a passion, not a job. I continue to wish Jason, the board and all employees of the CIPP the very best for an excellent future ahead. Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
0121 712 1013 cipp.org.uk @CIPP_UK
Articles Please support this magazine so that it can continue to be a part of your membership package. Trademarks The CIPP logo, the initials ‘CIPP’ and the words ‘Professional in Payroll, Pensions and Reward’ and ‘CIPP Consult’ are trademarks of the Chartered Institute of Payroll Professionals. Copyright: The Chartered Institute of Payroll Professionals 2023. The Chartered Institute of Payroll Professionals, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 Copyright This magazine is published by The Chartered Institute of Payroll Professionals in whom the copyright is vested. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. The views expressed in this publication are not necessarily those of the CIPP or the editor. The information and comment contained in this publication are given in good faith, their accuracy or completeness cannot be guaranteed.
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 2
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at cipp.org.uk
Contents June 2023
REGULARS 01 Editor’s comment 02 CEO’s and chair’s message 04 CIPP update News and developments, PAS accreditations 06 My CIPP Events horizon, On your behalf, Payroll news, Industry news, Advisory Q&As, A day in the life of…, Spotlight on 17 Personal development BePayroll 18 Compliance From examining the interaction between salary sacrifice and national minimum wage to how to combat payroll fraud
FEATURES
A day in the life of… the CIPP’s board members By Jeremy Montgomery, Justine Riccomini and Clare Warrington
Can you withhold more than 22% federal income tax on supplemental wages? By Sally Hilton
18
14
Salary sacrifice and the national minimum
Deciding whether a payment is a termination payment or a restrictive covenant By Justine Riccomini
19
20
wage – sacrificing common sense? By Gary Henderson
Understanding the tax and National Insurance implications of helping employees’ financial well-being By Beverley Gibbs CIPP public sector SIG: post-budget compliance update By Shaun Tetley, Elliott Mason, David Spencer and Anrika Thinju
How we can wage war on payroll fraud By Stewart Waddell
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24
online exclusive content
Employee assistance programmes or staff welfare counselling – have you got the tax treatment right? By Susan Ball and Lee Knight
28
30
online exclusive content
32 Feature topic
Time to look through the employee’s end of the telescope? By Don MacArthur
It’s time to shine By Samantha O’Sullivan
Read all about the theme of the current issue
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38
36 Reward
Tips on how payroll teams can help employees through the cost-of-living crisis and discussion of how to attract fresh talent to the payroll industry Pensions How should pensions administration be handled?
Attracting the next generation to the payroll industry By Ana Liau
Payroll and pensions: the frontier for supporting employees’ financial well-being By Emma Stockdale
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49 50 56
44
Technology How pay on demand could help to boost employees’ financial well-being
Voluntary ethnicity pay gap reporting guidance By Danny Done
What’s the latest in the world of employment law? By Nicola Mullineux
46
online exclusive content
48
Hot topic What did tax administration and maintenance day announce for payroll professionals to be aware of?
Should pensions administration centralise or move to the blockchain? By Henry Tapper
The rise of on-demand pay solutions: boosting employee financial wellness and engagement By Brian Sparling
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50
58
Payroll pets We say hello to some of your furry friends
CIPP special
online exclusive content
| Professional in Payroll, Pensions and Reward | 3
Issue 91 | June 2023
CIPP update
CIPP charity fundraising WE ARE delighted to announce that CIPP employees have raised £889 for the Warwickshire Wildlife Trust through several charity events, such as: l our summer sizzler, which took place in May l charity raffles l producing a charity calendar. Our donation to the Warwickshire Wildlife Trust could help to buy 45 bowsaws enabling volunteers to act in their local green spaces, three outdoor learning boxes for schools to use on their grounds to enhance children’s outdoor learning experiences, or fund a health and well-being officer to deliver three outdoor activities to support people in managing their mental health and well-being through nature. Reward Strategy’s Payroll and Reward Conference FROM 15-16 June, the CIPP team will be exhibiting at the Payroll and Reward Conference 2023, hosted by Reward Strategy. If you’re also attending or exhibiting at the Leonardo Royal London, St Paul’s, we’d love for you to pay us a visit, meet the team and hear about what the CIPP can offer you. For more information, please visit http://ow.ly/LuiJ50OoVjV.
RIP, Carmel Walsh WE HAVE received the sad news that one of our members has passed away. Carmel Walsh was an associate member of the CIPP for eight years and completed the Payroll Technician Certificate in 2016. We would like to extend our heartfelt condolences to Carmel’s family, friends and colleagues.
2023 Memcom Excellence Awards IN MAY, we were thrilled to learn we’d been shortlisted for two awards at the Memcom Excellence Awards 2023, taking place on September 26 at Hilton Bankside, London. We’ve been shortlisted for the ‘Best Professional Membership Organisation’, and our chief executive officer (CEO), Ken Pullar, who will be retiring later this year, has been shortlisted for ‘The Memcom CEO Leadership Award’. With 34 awards being up for grabs in six different categories, we’re delighted to be shortlisted, gaining recognition from the industry. For more information on Memcom’s Excellence Awards, visit: http://ow.ly/ pGyJ50OoVqH.
4 | Professional in Payroll, Pensions and Reward | June 2023 | Issue 91
MY CIPP
Payroll Assurance Scheme (PAS)
The prestigious gold standard accreditation for your payroll processes and people Developed in partnership with HM Revenue and Customs and launched in 2012, the PAS is the only industry kitemark to ensure your payroll processes and people are compliant and robust. Examining over 60 facets of your payroll operations, the scheme is consistently evolving and not only shows that lifelong learning and development is planned and encouraged, but that you’re dedicated to compliance and best practice in payroll, a huge accolade for staff, as well as ensuring procurement is much easier.
Every issue we want to recognise and celebrate those organisations which have successfully achieved, or retained, their accreditation. This month we would like to congratulate:
l University of Lincoln l North Bristol NHS Trust l Phase 3 Consulting Ltd.
Our chief executive officer, Ken Pullar, said, “We’re very proud to support so many organisations in attaining this best practice kite mark. It’s crucial every payroll organisation shows they have robust payroll processes, to give your teams confidence day to day but, ultimately, to ensure you’re compliant. Congratulations to you all on this fantastic achievement.”
TESTIMONIALS Hear from a few of our accredited organisations, on how PAS has benefited them.
AWS Accountancy:
Moorepay:
“At AWS Accountancy, the payroll department are overjoyed by the success of gaining the PAS accreditation. We’re pleased the hard work and dedication has allowed the department to be recognised on a national scale. The feedback from the assessor, Pete Statham has inspired and given us the confidence to shout about the payroll profession. Hearing the feedback has enhanced the pride in what we do. “The accreditation not only enhances our business status but has opened the door for new services to be offered to payroll clients.”
“We're delighted to have held the CIPP's PAS accreditation since it was first launched back in 2012. To be re-accredited yet again is testament to our people and our processes, and we're really proud of both! Moorepay promises worry-free compliance and the PAS accreditation is a crucial proof point for our customers, as it shows our payroll team is operating at the highest standard. A big thank you to our industry partner, the CIPP, for being by our side over the years – your feedback and support have been invaluable.”
Tom Spencer, data and compliance manager
Emma Watson ACIPP, payroll manager
To find out more, visit our website or contact our PAS team: www.cipp.org.uk/PAS compliance@cipp.org.uk
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| Professional in Payroll, Pensions and Reward |
Issue 91 | June 2023
Event horizon
Your guide to upcoming events and training
Full details of events and training courses can be found at cipp.org.uk or you can email info@cipp.org.uk for more information.
Last call for early bird prices to our Annual Conference and Exhibition That’s right. You still have time to join us at the CIPP’s Annual Conference and Exhbition in October 2023, at a reduced price, as we’re offering early bid prices until 30 June 2023 We have such an amazing line up for you, and we want to engage with as many of you as possible, to make this our biggest, best conference yet. Ensure you don’t miss your opportunity to attend. You can find more information here: http://ow.ly/bXgI50Oq2Hr.
Training courses Please note, there are other dates and locations and training courses available. Please visit http://ow.ly/iVfT50MU7yr.
BeKnowledgeable: taking control of payroll risk 18 July 2023 Maria Mason, partner at BDO LLP, will be guiding us through why payroll can be seen as a high-risk activity for an organisation. Maria is an experienced partner who specialises in providing quality outsourced payroll and human resource solutions and services to a wide range of UK and international clients. With over 30 years’ experience, Maria can ensure that a high-quality service is always delivered by payroll. By leveraging technology to improve efficiencies, Maria ensures that the professional and efficient service required for the provision of payroll is achieved and risk is minimised. Maria will discuss how you can appropriately control the risk elements while ensuring both the team and payroll operations aren’t constrained, enabling you to deliver and grow a successful and valued service. Book your place today at http://ow.ly/3noH50Otblp.
Course
Date
Location
Off payroll working and other employment status considerations
21 June
Online
24 July
Online
09 June
Online
Overpayment recovery workshop
12 July
Online
Payroll for educational establishments
03 July
Online
05 June
Online
This is the first face-to-face course since December 2022!
Introduction to payroll
03 July
Online
National Payroll Week 2023 Payroll professionals work tirelessly all year round, ensuring employees are paid accurately and on time, and constantly striving to keep up with ever-changing
17 July
London
PAYR LL NATIONAL WEEK 2023
12 June
Online
P11D expenses and benefits
25 July
Online
15 June
Online
guidance and legislation. This is why we love National Payroll Week so much. This is your week of the year to shout about the invaluable work you do, and to celebrate the industry we all love so dearly. National Payroll Week takes place from 4-8 September 2023, so ensure you mark it in your calendar and start thinking about making preparations for this hugely important week. Keep an eye on the website to find out more details of this huge celebration of all things payroll, here: http://ow.ly/ eW6C50Oq309.
13 July
Online
Payroll update
24 July
Birmingham
31 July
Online
26 June
Online
Termination payments
17 July
Online
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 6
POLICY HUB
On your behalf
As the saying goes, ‘April showers bring May flowers’, and with those flowers came a handful of bank holidays. Many of us were fortunate enough to have some time off last month, however the May bank holidays didn’t hold up the CIPP’s policy and research team. Here's what they got up to... Policy team update
feedback the policy team gathers will be used to respond to the consultation on behalf of payroll professionals and the wider industry. Editor of Professional magazine, Lora Murphy was joined by Susan Ball, tax partner at RSM UK and President of the Chartered Institute of Taxation and Lee Knight, director at RSM UK. This was for a BeKnowledgeable session discussing the complexities of the construction industry scheme (CIS), focussing on how payroll experts can handle the nuances of the scheme. The aim of the session was to help identify who needs to register, as well as how to operate the scheme and which payments are caught. More specifically, the following key points were addressed: l purpose and background of the CIS l importance of establishing employment status and off payroll working / IR35 l scope of the scheme – what’s in, what’s out? l difference between mainstream contractors and deemed contractors l verification process and compliance requirements l paying of subcontractors and processing the deduction of tax l consequences when mistakes are made, including the penalties for getting it wrong l registration and cancellation of registration. Policy lead, Samantha O’Sullivan represented the CIPP at Accountex London, delivering a valuable 2023/24 legislative update. This event brought together over 250 top fintech companies and updated professionals with all the latest knowledge and information regarding industry products and trends. Sam also presented at the Shared Services Forum UK, who held a collaboration week in May. The event included a legislative update, covering
relevant case law and helpful reminders to ensure businesses, intermediaries and professionals remain compliant. Sam also hosted an event for the payroll services specialist interest group (SIG). This was the second event for the SIG, covering the latest consultations and HMRC changes, also incorporating a session on hiring payroll apprentices within a bureau. In addition, the policy team hosted an event for the Institute of Chartered Accountants of Scotland on expenses and benefits, which was delivered by the CIPP’s payroll training manager, Fiona Smith. The session aimed to keep the audience up to speed with the rules following the abolition of paper P11Ds and P11D(b)s to HMRC in 2023, and payrolling benefits.
Events Policy and research officer, Meena Salhan began the month by facilitating two think tanks in relation to the recent Low Pay Commission (LPC) 2023 consultation on national minimum wage (NMW) rates for 2024. Next year is set to be a year of big change for the national living wage (NLW) in particular, as it will become applicable to anyone aged 21 and over (currently it applies to anyone aged 23 and above). NLW rates can have a substantial impact on those who are low paid, but any labour market implications of an increase or expansion of the rate also need to be carefully considered. The LPC is keen to understand what effects the proposed change could have and the impacts of recent changes to the NLW. The think tanks were led by LPC representatives and attended by stakeholders from a range of different sectors. Our other policy and research officer, Mathew Akrigg conducted a think tank on the consultation titled, ‘ Simplifying and modernising HMRC's income tax services through the tax administration framework ’. This was led by a representative from HM Revenue and Customs’ (HMRC’s) tax administration framework (TAFR) simplification team and proved to be highly popular with CIPP members. With the closure of the Office for Tax Simplification, HMRC now has a responsibility to ensure it considers simplification in its processes. Within this consultation, HMRC is seeking views on improving pay as you earn processes and self-assessment criteria. Such a review is bound to create movement in the payroll profession. This is incredibly important for the CIPP, as the
Watch this space… Following the government’s
announcements on ‘tax administration and maintenance day’ (TAMD), the policy team have been working at full speed. This has involved arranging sessions and doing plenty of reading, to ensure we respond to consultations which impact the payroll profession. This will allow members to have their say, and the team will be releasing quick polls and surveys, while also holding think tank sessions. Be sure to keep a look out for notifications, which will be published through the CIPP’s various social media accounts. Also, flick to our hot topic article this issue to find out more about TAMD. n
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| Professional in Payroll, Pensions and Reward |
Issue 91 | June 2023
4-5 October 2023 | Celtic Manor Resort, Wales
The CIPP’s Annual Conference and Exhibition is the largest independent payroll conference in the UK, and brings together top payroll professionals, thought leaders and solution providers from across the UK. Whether you’re a seasoned payroll expert or just starting your journey, the Annual Conference is designed to empower and elevate your payroll skills and knowledge. DON’T MISS OUT ON THE PAYROLL EVENT OF THE YEAR!
Visit cipp.org.uk/ACE for full details and to book your place
Watch the video
“THE CONFERENCE IS ALWAYS AN EXCELLENT OPPORTUNITY TO ENSURE YOUR KNOWLEDGE IS CURRENT, LOOK AT WHAT IS NEW AND NETWORK .” Ian Nicholson MCIPP, head of HR operations & reward, QIC Global Services Ltd
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 8
Why should you attend?
ENLIGHTENING KEYNOTES SESSIONS Gain insights from leading payroll practitioners, industry experts and HM Revenue and Customs (HMRC) officials who will share their knowledge and experiences. Dive deep into the latest payroll trends, legislation updates, compliance strategies and best practices. INTERACTIVE WORKSHOP SESSIONS Participate in a wide range of interactive workshops and thought- provoking discussion groups led by industry experts. DISCOVER NEW SOLUTIONS Discover the latest payroll technologies, services and products from our diverse range of exhibitors. Engage with providers from across the industry to find solutions that will transform the way you manage your payroll.
PERSONAL AND PROFESSIONAL DEVELOPMENT Develop new skills and explore new perspectives, and gain valuable updates to boost your professional development and career prospects. CELEBRATE EXCELLENCE Attendance at the full conference includes a ticket to attend the CIPP’s Annual Excellence Awards 2023; the largest UK payroll awards ceremony celebrating excellence in the profession. NETWORKING Speak with like-minded professionals and grow your personal network.
Featured sessions
QUALITY OVER QUANTITY: HOW TO USE MICROLEARNING
WHAT’S IN THE TOOLBOX TO ENHANCE YOUR PAYROLL CAREER?
CIPP BITESIZE TRAINING: PAYROLLING BENEFITS
Polly Sinclair MSc FCIPPdip MSET Programme tutor, West Suffolk College
Karen Thomson MSc ChFCIPPdip FHEA UK payroll director, AAB
Fiona Smith MCIPPdip Training manager, CIPP
In this session, Polly will explore the concept and benefits of microlearning and how you can adopt it into your learning and development strategy.
This session will explore the tools you can use to help employees achieve their aspirations and excel in their payroll career.
In this session, Fiona, will provide a bitesize update of payrolling benefits and what you should know.
Don’t forget to nominate
Taking place on 5 October 2023 as part of the CIPP’s Annual Conference and Exhibition; the Annual Excellence Awards are the longest running, independent awards in the industry.
Nominations for the CIPP’s Annual Excellence Awards 2023 are closing on 31 July so make sure you get your submission in soon.
Visit cipp.org.uk/awards for information and to submit your nominations
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| Professional in Payroll, Pensions and Reward |
Issue 91 | June 2023
PAYROLL news
The Retained EU Law Bill makes a U-turn THE GOVERNMENT has tabled amendments to the Retained EU Law (Revocation and Reform) Bill (REUL Bill). Originally, the intention was to mass delete EU-era laws at the end of the year, but now a new direction has been decided.
Former ministers say SSP reform is needed FORMER HOME secretary, Priti Patel and former lord chancellor and justice secretary, Sir Robert Buckland have called for changes to the current statutory sick pay (SSP) system. They said it should be altered so it helps ill people “get back on their feet and back to work”. It’s estimated that two million people in the UK aren’t eligible for any sick pay at all. In addition, another ten million individuals are eligible for SSP only, but due to the current rules, don’t receive any sick pay for the first three days of absence. A consultation which looked at potential reforms to SSP, ‘ Health is everyone’s business: proposals to reduce ill health-related job loss ’ considered making it so that employees who didn’t earn at or above the lower earnings limit would also be eligible for the payments. 75% of respondents to the consultation supported this move but the government confirmed no changes would be made in this space, stating “now is not the right time to introduce changes to the sick pay system”. The consultation can be found here: http:// ow.ly/2rSY50OpZ3q.
Instead of automatically repealing all retained EU law before the end of 2023, it’s now expected that approximately 600 pieces of legislation will be revoked. The Bill can be viewed here: http://ow.ly/5Qxs50OpYiw.
The recent changes have been made due to feedback received from businesses and other organisations, and this new approach will aim to replace the ‘sunset clause’ in the Bill with a list of all the EU laws intended to be revoked under the Bill at the end of 2023. The government states this will provide certainty for businesses and other organisations by highlighting which regulations will be removed from the statute book. The government has also published a paper, entitled, ‘ Smarter regulation to grow the economy ’. This is the first in a series of publications on how sectors across the UK economy are being reformed. It provides details of an ambitious programme of reform to reduce overall regulatory burden, maximise innovation / growth and support UK businesses and consumers. This report can be located here: http://ow.ly/J7m950OpYhs. The government has already reformed or revoked over 1,000 pieces of REUL, and around 500 laws covering financial services have been exempted from the deadline, as they’re due to be repealed by a separate Bill making its way through the Commons. The same is expected for EU legislation impacting value added tax (VAT) and customs.
The Tips Bill gains Royal Assent and becomes law THE EMPLOYMENT (Allocation of Tips) Bill has become an Act of Parliament (law) by gaining Royal Assent on 2 May 2023. The Bill makes it unlawful for employers to withhold tips from staff and is expected to come into force in 2024. It’s been reported that more than two million workers across the hospitality, leisure and services sectors will have their tips protected. They’ll also be able to view an employer’s tipping records. An estimated £200 million a year will go back into the pockets of hard-working staff who will retain tips which would have otherwise been deducted. Business and trade Minister, Kevin Hollinrake said: “As people face rising living costs, it is not right
for employers to withhold tips from their hard-working employees. Whether you are pulling pints or delivering a pizza, this new law will ensure that staff receive a fair day’s pay for a fair day’s work – and it means customers can be confident their money is going to those who deserve it.” Through the Act, a new statutory code of practice will be developed to provide businesses and staff with advice on how tips should be distributed. Workers will receive a new right to request more information on an employer’s tipping records, enabling them to bring forward a credible claim to an employment tribunal. Businesses should act now to ensure they’re compliant in time for when the new conditions come into force. An audit of current practices is advisable, to ensure 100% of tips and service charges are being allocated the correct workers within the period required. The Bill can be accessed here: http://ow.ly/IBI050OpYw9, and the associated press release can be found here: http://ow.ly/ RiLe50OpYx8.
Diary dates
5 July
Last day of tax month 3
6 July
First day of tax month 4
Last day for submitting a real time information employer payment summary to apply to tax month 2 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method
19 June
22 June
Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method
5 August 6 August
Last day of tax month 4 First day of tax month 5
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 10
LOOKING TO MAKE A DIFFERENCE IN YOUR ORGANISATION?
INDUSTRY news
The CIPP, in partnership with Loughborough University, offers experienced managers the opportunity to gain a recognised university qualification in Strategic Leadership, with the benefits of part-time learning to fit around their schedule. This qualification will help organisations to retain and develop talent, build management and leadership capability and bring an extra dimension to existing professional development within their organisation. MSc in Strategic Leadership
Portfolio Payroll establishes new C-suite and director team RECRUITMENT COMPANY, Portfolio Group, has welcomed the new financial year with a wave of promotions, creating a new C-suite management team. This is complemented by the promotion of three associate directors into director roles. The Portfolio Group is celebrating its 35th year in business with ambitious expansion plans. The first overseas office is now open in Toronto, Canada, starting with its payroll division, with plans for expansion into further global markets. Danny Done, who founded the business in 2003, will step up from managing director to chief executive officer (CEO). Anthony Macey is being promoted from director to chief operating officer (COO) and Charlotte Turner from director to chief growth officer (CGO). CEO, Danny Done, says: “This is an exciting time for the Portfolio Group. We’ve just had a record year in terms of both total fees and company profit. It’s now time for our management team to take on a more strategic role, helping us grow and expand into new markets. Creating a C-suite is the first step in this process. The newly appointed directors will pick up more of the day-to-day operations management of Portfolio Group with ambitious goals. We’re confident they’re the right people to take Portfolio Group to the next level.” There are also three director appointments, with Gemma Creamer, Patrick Day and Mark Davis all moving up from associate director roles, managing the permanent, executive and temporary / interim division respectively. COO, Anthony Macey, says, “Gemma, Patrick and Mark have played a crucial role in the growth of the business. We’re all delighted to celebrate their well-deserved promotions. Not only is this the right step in establishing a strong core team who know and share our business values and ethics, it also demonstrates a clear platform and pathway for others to grow and develop into management positions in the future.” Charlotte Turner, CGO, adds; “Now is the right time for us to move to a C-suite model, with the launch of The Portfolio Group Canada. We’re building a business with the potential for rapid growth over the coming years. Who knows where we’ll conquer next.” Ceridian launches Dayforce Accelerate in the UK and Ireland CERIDIAN IS a proven partner driving organisational transformation for enterprise customers through a modern approach to human capital management (HCM). But in today’s dynamic work world, many organisations require a faster path to compliance, anchored by clear outcomes. To meet the needs of this critical audience, Ceridian has launched Dayforce Accelerate in the United Kingdom and Ireland. Dayforce Accelerate is a focussed solution, bringing together the most frequently used Dayforce components, including: l core HCM l payroll l time and attendance l recruiting. The solution enables customers to access mission-critical functionality required to move their business forward, compliantly, accurately and rapidly. Importantly, Dayforce Accelerate is built around an organisation’s unique needs and data, built to scale and implemented in as little as 12 weeks. “In this new world of work, employers are looking to deliver modern cloud experiences that drive value to the business and its employees,” said Wendy Muirhead, managing director and regional leader, Europe, the Middle East and Africa, Ceridian. “Organisations of all sizes can now benefit from the power of Ceridian’s people-focussed technology to modernise their workforce and pay processes, enhance compliance and take advantage of additional Dayforce innovations as their business needs evolve.” In addition to faster deployment and implementation timelines, Dayforce Accelerate offers predictable price points and access to Ceridian experts who provide guidance every step of the way. Dayforce Wallet, Ceridian’s on-demand pay solution, was recently announced in the UK and is also available to Dayforce Accelerate customers. Muirhead also said: “What’s particularly interesting for the mid-size market, is Dayforce Accelerate has zero impact on an organisation’s capital expenditure which makes it more accessible to a broader spectrum of companies to better support their people.”
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| Professional in Payroll, Pensions and Reward |
Issue 91 | June 2023
MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Q: If an employee draws down a lump sum from their occupational pension, can this be taken as instruction that contributions are to stop? Or should contributions continue to be deducted and paid into their pension until they opt out? A: By drawing down a lump sum from a defined benefit pension scheme, the individual may have triggered the money purchase annual allowance (MPAA). However, that lump sum must be more than 25% of the pension fund value. It’s the individual’s responsibility to inform you if the MPAA has been triggered. If it has, their annual pension allowance is reduced from £60,000 (effective from 06/04/2023) to £10,000 (effective from 06/04/2023). If the individual has triggered the MPAA, any pension contributions paid into the fund which exceed the limit will incur a high tax charge. You may wish to speak to your pension scheme administrator and finance director in scenarios such as this, as employees are normally paid a cash compensation via the payroll to limit the employer pension contributions that would normally be paid over to the pension fund. Neonatal leave and pay Q: We have an employee who has given birth to premature twins at 24 weeks. We started her statutory maternity pay from the date the babies were born, sadly one has passed away and the other is in neonatal care. How does the additional 12 weeks’ leave for babies in neonatal care work alongside maternity leave? Presumably, the father would also be entitled to this from his employer? A: The entitlement to any neonatal statutory leave and pay hasn’t passed all stages in Parliament yet. It’s still going through the parliamentary process before it becomes law. The Bill can be located
Backdated pay award: tax and class 1 NICs will be due at the time payment is made, as there would have been no entitlement to payment before then. If it was a contractual bonus payment: if crossing tax years, Section 18 of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003 could apply if the employee should have received payment in the previous tax year. However, NICs would be due at the time payment is made. The only time you could use a previous tax year’s NIC thresholds is if no pay had been paid in the pay period or the employee’s benefits had been affected (e.g., pensions credits). Again, this would probably be when an employee hadn’t been paid. Equal Pay Act 1970: arrears of pay due under this law: Again. Section 18 of ITEPA 2003 can apply to tax but NICs must be due at the time payment is made, unless there was no pay in the pay period in question or the employee’s benefits were affected. Please see the following links for further information: l The Social Security (Contributions) Regulations 2001: http://ow.ly/KIty50OpUXY l Employment Income Manual (EIM)02530: http://ow.ly/LwFp50OpV5h l National Insurance Manual (NIM)09810: http://ow.ly/uvKu50OpV8w.
What is the snapshot date for gender pay gap reporting purposes?
Gender pay gap reporting ‘snapshot date’ Q: We’re a limited company. For gender pay gap reporting, will the snapshot month we use be April? A: Yes, I can confirm that the snapshot date for gender pay gap reporting is the 5 April for private companies, and you use the earnings in the month in which the snapshot date falls. To assist with this, please follow the guidance here: http:// ow.ly/172S50OpUCF. “Snapshot dates The snapshot dates are: l 31 March for most public authority employers l 5 April for private, voluntary and all other public authority employers You should base your gender pay gap calculations on payroll data taken on your snapshot date.” Applying National Insurance (NI) to retrospective earnings Q: If an employee has two contracts with the same employer, and then claims for retrospective earnings on one of the contracts, how is the NI calculated on the retrospective earnings? A: If this is general backdated pay, then, tax and class 1 NI contributions (NICs) will be due at the time payment is made, as there would have been no entitlement to payment before then. Below is further information which might be useful in the future:
What happens to employer contributions after an employee cashes out their pension?
Pension contributions when an employee draws down a lump sum from their occupational pension
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 12
POLICY HUB
P11D, EXPENSES AND BENEFITS TRAINING COURSE COLLECTION
What must legally be included on payslips? Q: An employee has queried why employer pension contributions aren’t showing on their payslips. We operate a salary sacrifice pension scheme, and only show employee additional contributions on the payslips. Is this correct, or should employer contributions be shown? A: The legal requirements regarding what must be included on payslips is covered by the Employment Rights Act 1996, with the minimum requirements being that one must be given to an employee each time they’re paid, and it must include details of: l total gross pay l an individual listing of all statutory deductions (tax, NICs, etc.,) l voluntary deductions (no requirement to show these separately – but if you don’t then you must ensure a breakdown is provided on an annual basis) l net pay l method of payment. Where the amount of wages or salary varies by reference to time worked, there are further requirements, which can be located here: http://ow.ly/jxMv50OpUmb. So, as per the legislation, no, employer pension contributions don’t have to be shown, though good practice would be to include them on payslips. n
here, where you can also track its progress: http://ow.ly/OkI350OpTaT. The employee may, however, be entitled to statutory bereavement pay and leave for up to two weeks. Treatment of retirement payment Q: Our employer has instructed us to pay an employee a retirement gift of £1,000. We have been asked to pay this as an ex-gratia payment into his bank account. Can this be done, and is it subject to tax and NI? A: Section 7 (3) (a) and Section 62 of ITEPA 2003 (http://ow.ly/fSOq50OpTEJ) can help to answer this, as per below: “Meaning of ‘earnings’ For tax purposes, the word ‘earnings’ in relation to an office or employment means: l any salary, wages or fee l any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth l anything else that constitutes an emolument of the employment.” This payment will, therefore, be subject to tax and class 1 NICs via the payroll. The days of ‘golden handshakes’ upon retirement are gone. You could consider, with prior approval of course, grossing this up so the employee receives the full £1,000 net.
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As per the Employment Rights Act 1996, what should employers be including on employee payslips?
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| Professional in Payroll, Pensions and Reward |
Issue 91 | June 2023
Prices correct at time of publication
MY CIPP
A day in the life of a CIPP board member In the first of a summer series of articles, we want you to get to know the CIPP’s board members, so we invite you to take a glimpse into a typical day in each of their lives…
mixed portfolio of work. I divide this into three buckets and do a bit of everything every day so I can keep on top of things. 1 . I write technical articles, opinion pieces and thought leadership papers about UK employment taxes (including payroll) and devolved taxes (which encompasses all taxes (national and local), which are devolved to Scotland, Wales and NI). These appear on the Institute of Chartered Accountants of Scotland (ICAS) website but also in other sector publications. 2 . I deliver webinars, speak at conferences and events, lecture postgraduate tax and accounting students and volunteer at schools attended by underprivileged children to talk about careers in tax and accounting. 3 . I attend many meetings. I co-chair four different forums with HM Revenue and Customs and two with Scottish Government / Revenue Scotland. I have meetings with: l Ministers and senior civil servants l tax experts who volunteer to be on ICAS tax committees l ICAS members l other tax professionals to discuss problems businesses and employers are facing. I need a reality check because it’s over a decade since I worked in practice, so although I know the legislation and policy back to front, I need people to tell me how that’s affecting the real world of doing business and the labour market, outside of the policy bubble. I tend to try and push for meetings in the mornings, and I like to do my writing in the afternoons. I prefer to deliver my webinars in the mornings when I’m fresh too. Sometimes this means I’m in back- to-back meetings for four or five hours.
Writing usually involves lots of technical research and reading time, so I like to be able to relax when doing that. I don’t like to interrupt my writing work with meetings because the ‘flow’ is lost. I like to think about what would happen if you turn X, Y or Z on its head and consider things in a different way. It comes in handy when working in tax policy. It’s important to consider that something shouldn’t be changed for the sake of it: but some things shouldn’t stay the same either, just because they’ve ‘always been done like that’. As you know, I’m a board member at the CIPP, which is an honour and a privilege, and complements what I do at ICAS very well, as they’re both Institutes, regulators, educators and examiners. I find the board meetings very rewarding, and I like to find a balance between unfettered ambition and realistic expectation in terms of where we’re trying to steer the CIPP. I love working with my fellow board members – it’s very challenging and simultaneously fulfilling to think that the Institute is going from strength to strength due to the sound decision making of the senior leadership team, the chief executive officer and the board. I’m very proud of the CIPP – it has a special place in my heart. I tend to work until around 6.30pm and then it’s power walkies for an hour and cooking / relaxing with the hubster. Not a bad balance overall. I never work at weekends unless I’ve missed a day or part of a day due to other things happening, such as a visitor arriving. That’s flexibility for you – a great thing and essential for work / life balance. By the time Question Time comes on the telly, I’m starting to nod off. I am getting on a bit you know!
Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP My day usually starts at about 6:30am, when I get up walk my dog, Reggie. He’s a Cockapoo puppy and my office companion number one. We’re always out in the fields above our home in the Pennines of West Yorkshire, to get a few thousand steps in before breakfast. Then it’s home for a cuppa with my hubster, Alessandro, and a bowl of porridge. After my shower, I head upstairs to my office, which is a huge attic room running the full length of the house. It’s divided into my ‘girl cave’ and a den. My hubby works from home three days a week and I allow him to share my girl cave, but I’m a full-time remote worker. So, I’m either at home or travelling to meetings in Westminster, Holyrood or the Welsh Government in Cardiff. I start work at 8am to get a few things done before the email traffic cranks up. My days are often long because I get embroiled in work and there’s always so much going on. But little Reggie needs his walks so it’s a good excuse to break and get some fresh air. As the head of employment and devolved taxes at the oldest professional accounting body and regulator in the world, there’s lots going on and I have a
| Professional in Payroll, Pensions and Reward | June 2023 | Issue 91 14
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