in Payroll, Pensions & Reward PROFESSI NAL Official publication of The Chartered Institute of Payroll Professionals Issue 85 November 2022
The rollercoaster ride It’s all change for the payroll profession, once again
The future of payroll How will the profession that never stands still develop in the years to come?
Taxes across the world Explore the tax systems of other countries around the world
The benefit of benefits
CIPP UPDATE POLICY HUB PERSONAL DEVELOPMENT
cipp.org.uk
What worry-free compliance feels like.
Software and services you can count on.
Making payroll & HR easy
Brains, like hearts, go where they are appreciated Robert McNamara
Editor’s
comment
Welcome to the November issue of Professional magazine. The theme for this month is ‘the benefit of benefits – an exploration of
expenses, benefits and reward’ . This is such a vast area, as there are always brand new benefits appearing, and more employers recognise that people are
16
no longer interested in just base salaries. They want more. They want a healthy work-life balance, private medical insurance to protect them in the event they fall ill and they want to be able to purchase or sell more annual leave. The subject of benefits packages is also particularly topical, given the current cost-of-living crisis. Employers may not be able to fund vast salary increases (as they are, too, feeling the economic pinch), but could explore a range of other ways to support their staff through these turbulent times. Flick to page 38 and learn what our panel of experts think about what the benefits of benefits are in this month’s feature article. Why not head to page 48 to discover more about cycle to work schemes? Or, if you’re interested in learning the rules surrounding living accommodation, then page 16 is the place for you. Maybe you’re considering offering trivial benefits (turkeys, anyone?) to employees this festive period – if so, make sure you’re aware of the potential pitfalls, on page 32. In wider news, the payroll profession seems to be grappling with almost constant change at the moment. Following former chancellor, Kwasi Kwarteng’s ‘mini-budget’ on 23 September 2022, we had a further emergency economic statement from current chancellor, Jeremy Hunt, on 17 October 2022. Turn to page 56 to see what the latest updates are (at the time of writing!), on the rollercoaster ride that is payroll.
32
38
48
Lora Murphy ACIPP (editor@cipp.org.uk) Editor
16 - Living accommodation: changes to the tax treatment for employees By Susan Ball and Lee Knight
32 - Anything but trivial? By Emma Rawson
38 - Feature – the benefit of benefits By Jerome Smail
56
48 - “I want to ride my bicycle” By Adrian Warren
56 - Hot topic – a rollercoaster ride for payroll professionals The CIPP’s policy and research team
1
| Professional in Payroll, Pensions and Reward |
Issue 85 | November 2022
Chair’s
message
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
In this month’s issue, we’re focusing on the topic of benefits – a vast area with so many different aspects to it. Provision of benefits within the area of payroll can differ greatly within organisations. However, in every organisation, whether they sit within human resources or payroll, teams should work together to ensure the organisation and its employees
receive the best benefits, which are as tax and National Insurance efficient as possible. The use of salary sacrifice schemes has reduced over the last few years, with HM Revenue and Customs (HMRC) reducing the benefits that can be included in such schemes. However, the use of payrolling of benefits is increasing, as it’s a more efficient way of processing benefits, with employees paying the tax liability in real time. Benefits provided as part of the total reward package can range from pet / health insurance to retail discounts, to a day’s birthday leave and much more. Some organisations will provide a small number of benefits, whereas others will have a large range of options for employees to choose from. Depending on the role, a company car / car allowance can be an attractive benefit. The company car provision should be reviewed on a regular basis, as the cost to the employer and benefit to the employee can be greatly impacted due to the many factors which affect the calculation, including: l list price l type of fuel l CO2 emissions Take some time out this month to review the benefits on offer within your organisation and consider if any change is required. l electric / hybrid l age of the car l accessories.
Chief executive officer Ken Pullar FCIPP CIPP board of directors Louise Gray ChMCIPPdip
Stuart Hall MCIPPdip Helen Higson ACIPP
Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA(Hons) FCIPP Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP Katie Sharpe MCIPPdip Cliff Vidgeon BA(Hons) CMA ACG ChFCIPP Clare Warrington MSc FCIPPdip AFHEA
Useful contacts
Liz Lay MSc FCIPPdip FHEA ACIPD (liz.lay@cipp.org.uk) Chair, CIPP
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
CEO’s
message
It was good to be back! After three years, how fantastic it was to meet so many of you face-to-face at our flagship Annual Conference, Exhibition and Excellence Awards Ceremony at the Celtic Manor Resort, Newport, in the beautiful Welsh countryside. What an
atmosphere, as friends, old and new, met and, more importantly, developed their knowledge and skills, as our conference continues to provide continuous professional development (CPD) through detailed legislative and topical workshops. The plenary sessions introduced our global visitors, a further reminder of the all-reaching effect of the payroll family. Very importantly on this educational theme, if you attended the conference, remember to maintain your membership with the CIPP and keep your knowledge and skills up to date through logging your CPD, so you can use your well-earned letters after your name. November is a further time for celebration as we hold our Graduation Ceremony this month at the fabulous Symphony Hall in Birmingham, for those who have successfully completed our university accredited qualifications. Well-deserved congratulations to all! I look forward to meeting and celebrating with you. Also, during this month, we’re encouraging members to consider putting their names forward to be considered as non-executive directors onto the CIPP board. This is your opportunity to help shape the future direction of the Institute. Applications will be reviewed by our nominations and appeals committee and followed up with an interview during December. Voting by members then takes place early in 2023, so prior to your vote being cast, carefully review the criteria of each board applicant to ensure you are ably represented by board members with an appropriate mix of skills, representative of our industry. Finally, after what will be nearly eight very enjoyable years at the helm of the CIPP, I am to announce my retirement during 2023. You will note an advert on page five for the position of chief executive officer. Applications are to be received by 9 January 2023.
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 2022. 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.
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
| Professional in Payroll, Pensions and Reward | November 2022 | Issue 85 2
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at cipp.org.uk
Contents November 2022
REGULARS
FEATURES
01 Editor’s comment 02 Chair’s and CEO’s message 04 CIPP update Events, news and developments 06 My CIPP On your behalf, Payroll news, Spotlight on, Advisory Q&As, Meet the board 14 Personal development BePayroll 16 Compliance From global taxes to living accommodation to pecuniary liability
Say hello to the board! By Liz Lay
Finally! Payroll integration with benefits and discounts made easy By Daniel Cookson
12
15
What is the future of payroll?
Tax time By Tim Kelsey
23
By the CIPP’s policy and research team
19
Payrolling of benefits – the interesting stuff By Tim Bridgett
What does PAS accreditation mean to you? By Samantha O’Sullivan
28
online exclusive content
26
The return of the face-to-face public sector SIG
What’s yours is mine: how to identify a pecuniary liability By Fiona Smith
38 Feature topic
34
Read all about the theme of the current issue
online exclusive content
30
42 Reward
Learn all about cycle to work schemes and helping employees in the current economic climate
Met Police case tests basic PAYE principles By Justine Riccomini
Discrimination, TUPE, unfair dismissal
50 Pensions
36
42
Read all about the potential impacts having a new pensions minister could have
By Nicola Mullineux
56 Hot topic
Hold on tight, on the payroll rollercoaster!
Supporting staff through the cost-of-living crisis By Danny Done
Let’s talk benefits By Julie Lock
44
46
58 Payroll pets
We say hello to some of your furry friends
online exclusive content
Is the new minister for pensions and growth going to grow automatic enrolment? By Henry Tapper
50
| Professional in Payroll, Pensions and Reward | 3
Issue 85 | November 2022
CIPP update
Financial well-being webinar – 8 November TO SUPPORT Talk Money Week from 7 – 12 November, as part of our BeKnowledgeable event series, our policy team will be hosting this session. They’ll be joined by a fantastic panel of employers from Nestle, John Lewis & Partners and DEFRA. We’ll be discussing what they’re doing to promote financial well-being within their workplaces, as we grapple with the current cost-of-living crisis. To register, visit the events page on our website – http://ow.ly/ f6Oa50LbI5R. Join us at the Payroll Services Summit (PSS) this November ON 10 NOVEMBER, we’ll be joining forces with PayDashboard and Experian to bring you the biggest and best PSS to date. This year’s event will be held at The Science Museum, London and will feature a fantastic line-up of speakers, including: l Maria Mason MCIPPdip l Barry Matthews
Training partnership IT’S BEEN agreed that, further to a successful trial with The Payroll Centre delivering several CIPP payroll courses in Scotland and Wales, this will become a permanent agreement for face-to-face training. This will allow us to deliver across more locations for our members and, as such, we shall continue to deliver CIPP face-to-face training courses in England and Northern Ireland, as well as offering online and in- house training. For further details, or to book a training course, please visit our website or contact us at enquiries@cipp.org.uk.
l Adam Flight l Andrew Guy l Fiona Hill ACIPP
l Damon Tunnicliffe l Kevin Waller ACIPP l Mathew Akrigg ACIPP. The speaker sessions start at 13:00, with the drinks and networking session at 17:30. To register for this free event, visit http://ow.ly/2VO250LbJZH. We look forward to seeing you there.
THE CIPP’s Payroll Assurance Scheme (PAS) is designed to test payroll processing and compliance, along with people skills and development opportunities. One of the most crucial elements is ensuring business continuity plans are in place and effective, should they be required. Congratulations to all organisations that have achieved this accreditation and been able to put those plans into action. Special congratulations to our recently accredited organisations: l Cornwall Payroll Bureau l IPSA (Independent Parliamentary Standards Authority) l Portsmouth City Council . Ken Pullar, CIPP chief executive officer, said: “Congratulations to those organisations that have attained PAS accreditation. They’ve clearly demonstrated their sound payroll processes, knowledge and skills. This is imperative in the payroll profession,
as reacting quickly to ever-changing legislation and guidance is crucial.” The PAS is still operating, with assessments currently operating virtually.
To find out how the PAS can benefit your organisation, email compliance@cipp.org.uk .
| Professional in Payroll, Pensions and Reward | 4 November 2022 | Issue 85
Exciting opportunity available
Chief Executive Officer Chartered Institute of Payroll Professionals Competitive salary + benefits
This is an exciting and challenging opportunity for a dynamic and outcome focussed professional to drive forward and lead a successful membership organisation. The role involves working flexibly, requiring time to be divided between working from home, travelling (including some overseas travel) and managing a busy central office located in Solihull. The new Chief Executive Officer will head a Senior Leadership Team and work with the CIPP Board to implement the Institute’s vision, strategy, and ambition. Key to the role is the ability to work collaboratively with partners and stakeholders to deliver business growth whilst maintaining both the financial health of the organisation and the highest standards in the services it provides. The CEO has oversight in the areas of policy, finance, people, education/training, membership and operations and will be required to ensure that CIPP business is conducted efficiently, and that effective governance processes and procedures are followed. The position also involves an important ambassadorial role to ensure that the CIPP’s high reputation is maintained.
Candidates will need to provide evidence that they are confident in debating and presenting to a range of audiences, particularly on payroll related topics, and can communicate well with others including peers, staff, members of the Institute and external stakeholders. They will need to be proactive, inspirational and have the energy and enthusiasm to drive strategy, as well as exercising sound judgment in leading the organisation in an appropriate and credible direction. It will be essential to demonstrate a track record of having grown and nurtured organisations and led effective staff teams, as well as to show a sound understanding of issues affecting payroll and related professions in the UK. Candidates should have a keen interest in organisational design and productivity and best practice in organisations and leadership.
A detailed role specification and timeline can be found at: https://www.integratedresources.co.uk/jobs
Closing date for applications: 9th January 2023
To apply for this role, please send your current CV and covering letter detailing your interest and suitability for the post, together with details of your current remuneration to karen.boffey@cipp.org.uk .
POLICY HUB
On your behalf
Find out what the the CIPP’s policy and research team, Samantha O’Sullivan, Mathew Akrigg and Lora Murphy have been up to over the past few weeks, and what's coming up shortly Policy team update
Annual Conference, Exhibition and Excellence Awards Ceremony What an amazing event the Annual Conference, Exhibition and Excellence Awards Ceremony was, at the luxurious Celtic Manor, in Wales. Held over two days, on 5 and 6 October 2022, it was a great way to meet with payroll professionals on a face-to-face basis, following a two-year hiatus. The policy team were delighted to deliver a plenary on day two of the conference, which covered the mini- budget, but also gave an insight into the work the policy team carries out on behalf of the wider payroll profession. Samantha then gave an overview of the policy team’s overarching strategy. Read all about the conference and awards in the ACE supplement, which is available now. Get in touch! The policy team
On 17 October 2022, Jeremy Hunt delivered the news that the majority of announcements made in the mini-budget will be reversed. This means the basic rate of tax will no longer reduce from 20% to 19% and the off payroll working reforms will remain in place. The planned abolition of the increase to National Insurance rates of 1.25 percentage points, from 6 November 2022, however, will go ahead as planned. Payroll pets We’re once again asking for you to show us your pets! We’ve had an overwhelming response so far, but we still want to see more of your furry and feathered friends! If you’d like to share your payroll pets, please email Lora, at editor@cipp.org.uk , with a picture of your payroll pal, along with their name and a bit about how they brighten up your day, plus your name and organisation. We can’t wait to see your animal snaps! n
We act as the policy and research team but no longer work in operational payroll departments, so we value your experiences and knowledge from the frontline. We’d love to hear from you, so get in touch, at policy@cipp.org.uk . Consultations update Lora responded to the consultation published by HM Revenue and Customs (HMRC), Improving the data HMRC collects from its customers , and the full response can be located here: http:// ow.ly/Sshs50La4LR. You can also access a range of other official CIPP consultation and call for evidence responses in the same location. Mathew hosted a think tank in relation to the Office of Tax Simplification (OTS) consultation that explored hybrid and distance working. It was an extremely well-attended and useful session, so thank you to all who attended and to the representatives from OTS who joined. The consultation closed at the end of October, and the response will be available on the CIPP website shortly. Government news At the time of writing, the news had just broken that chancellor of the Exchequer, Kwasi Kwarteng, had been removed from post. Jeremy Hunt was appointed as the new chancellor, and committed to delivering the 'medium-term fiscal plan' on 31 October 2022.
wants to hear from you, our members, about those things that are working well and those areas in which
things aren’t going as smoothly, from a payroll perspective. We sit on a range of government consultation forums, and aim to voice the feedback of our members, and the payroll profession, when we attend.
| Professional in Payroll, Pensions and Reward | November 2022 | Issue 85 6
PAYROLL NEWS
Payroll news
New real living wage rates announced
Businesses with fewer than 500 employers now classed as SMEs IN A press release, it was announced that any businesses with fewer than 500 employees will now be classed as small and medium enterprises (SMEs) for certain business regulation exemptions. The European Union (EU) defines businesses up to 249 employees as SMEs; however, the government has taken the step to increase this to 499. The new threshold was appliable from 3 October 2022 and applies to all new regulations that are under development and review, including retained EU law. The press release did stipulate, however, these are not blanket exemptions and may be overridden in some cases. The government intends to consult and expand the threshold up to businesses with 1,000 employees once the impacts of this initial expansion are understood. Read the press release in full here: http://ow.ly/5Sli50L9SA3.
THE LIVING Wage Foundation has announced the new hourly rates for the real living wage. This will sit at £10.90 (marking a £1.00 rise) across the UK, and at £11.95 in London (which is an uplift of 90 pence). This increase is the largest in the Foundation’s history (at 10.1%) and places the hourly rate at £1.40 higher than the
national living wage of £9.50 for those who are 23 and above. Ordinarily, the announcement of these rates is made in November, but due to the current cost-of-living crisis, this was brought forward to September. The Foundation calculates the rate based on the real cost-of-living factors facing workers across the UK. More than 11,000 employers currently pay at the real living wage rate, so the changes should impact more than 300,000 living wage workers. Katherine Chapman, Living Wage Foundation director, said, “With living costs rising so rapidly, millions are facing an awful ‘heat or eat’ choice this winter – that’s why a real living wage is more vital than ever. Today’s new rates will provide hundreds of thousands of workers and their families with greater security and stability during these incredibly difficult times.” The announcement can be accessed here: http://ow.ly/MHgE50L9Tiv.
The PLSA recommends five steps for better pensions THE PENSIONS and Lifetime Savings Association (PLSA) has recommended five reforms to government to help millions of savers better prepare for their retirement. Despite the success of automatic enrolment (AE), research highlights that more than 50% of savers won’t meet retirement income goals. There’s additional concern for under-pensioned groups, including those who take time out to care for others, the self-employed and gig economy workers. The PLSA has released a report which makes the following recommendations for reform: l national objectives l state pension reform l reform of AE to include more savers and prompt higher savings l supporting under-pensioned groups l industry initiatives to achieve better pensions. The PLSA’s calculations predict that, with the reforms, a median earner could increase their
retirement earnings from £15,000 to £19,000 per year (approximately 25%). The report, Five steps to better pensions: time for a new consensus , can be found here: http://ow.ly/OCrN50L9TSE.
Diary dates
5 November 6 November
Last day of tax month 7 First day of tax month 8
Last day for submitting a real time information employer payment summary to apply to tax month 7 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method Deadline for payment of PAYE and NICs under a PAYE Settlement Agreement (PSA) by non-electronic method Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method Deadline for payment of PAYE and NICs under a PSA by electronic method
19 November (this is a weekend date)
22 November
5 December
Last day of tax month 8
6 December
First day of tax month 9
7
| Professional in Payroll, Pensions and Reward |
Issue 85 | November 2022
Don’t wait until it’s too late
Payroll Assurance Scheme Can you afford penalties of up to £10,000* per day for non- compliance? Make sure your people and processes are working, and get ahead of any nonconformities before they become a problem.
Visit cipp.org.uk/PAS to see how we can prepare you.
cipp.org.uk
* Correct at time of publication
MY CIPP
Spotlight on...
Ken Pullar FCIPP, chief executive officer (CEO)
Tell us a little about your career and background.
since October 2016, how have you seen the company, and the payroll profession itself, grow over time? Since my association as an associate member way back in 1982 with APSA, through its various incarnations to the CIPP today, myself and predecessors, particularly on the board have set an agenda and roadmap in tune with the requirements of payroll professionals. As an example, to see payroll professionals (particularly during the pandemic), be identified as ‘key workers’, able to move from the office literally overnight, administer furlough and keep their organisations paid is a tremendous testament to our industry and, I think, with credit to the CIPP. What does the future hold for the CIPP? The more observant readers of this issue of this magazine will see an advertisement for the role of CIPP CEO from July 2023. I’ve tried retirement once, and now it’s a second time to give it a go for real! The CIPP is in a great place – an established growing membership base, timely and educational training events, a range of qualifications with no equal, from the Payroll Training Certificate to the Certificate of Pensions Administration, through to our industry standard Foundation Degree, as well as BA and MSc. All underpinned by passionate, knowledgeable and superb staff. The appointed CEO will lead the board and senior leadership team on a strategic ten-year plan to revitalise our education offerings in keeping us relevant and fit for purpose in supporting our wonderful payroll industry and professionals. n
what a career journey. Working my way to payroll services director, I had responsibility for providing payroll services, looking after 12 payroll centres the breadth and length of the UK. This role encompassed full profit and loss and management responsibility for the delivery of full payroll administration services for approximately 120 customers, paying some 270,000 employees, through a total payroll administration service. And that payroll journey continued – now in the global arena as global operations director, where, for the next ten years, up to 2012, I was actively involved in business process outsourcing in all aspects of payroll and human resource functions within the UK and offshore. Pause for breath – what a journey and life the payroll industry has given me, and I’ve loved (almost) every minute of it. Planned retirement in 2015 didn’t last long and in February 2016, I was delighted to join the CIPP as operations director, before being appointed to the role of CEO in October 2016. What does your role mean to you? If I could have chosen a particular role, with hindsight, it’s the role that I currently have as CEO at the CIPP. Why? Because it’s not a job, or a role – it’s a passion. All I’ve ever known in my career is the payroll industry, and to be with an organisation with a superb team that live and breathe how to help educate, train and encourage membership of the only Chartered body for payroll in the UK is, and has been, a great pleasure. Your association with what is now the CIPP began with a membership of the Association of Payroll and Superannuation Administrators (APSA) back in 1982. Now CEO of the CIPP
I’m not sure after 45 years in payroll there’s only a ‘little’ to tell of my background and career! Following the advice of a careers teacher that, “you are good at numbers”, I embarked on my introduction to the payroll world in 1977, on a gas terminal being built in the north east of Scotland. This was the era of clock cards and watching the men ‘clock in’ and ‘clock out’, with my desk and window conveniently situated overlooking the clocking in machine. Then calculating hours worked, completion of timesheets, calculation of bonus payments (based on a measure of work completed onsite each week), then making up and distribution of cash packets. And soon to learn the men knew ‘to the penny’ what their pay should be – that kept you on your toes. After three years of an ‘on the job’ payroll apprenticeship (as it were), and the site close to completion, I moved back to England, and started my local authority career as a payroll officer with North Yorkshire County Council. I was then promoted and moved to Cambridgeshire County Council. In retrospect, I now realise, having engaged with many payroll professionals over the years, that the complexity and knowledge gained from working in a local authority payroll is perhaps only second to that of working on a National Health Services payroll. It was certainly an asset as my payroll career developed. The world of payroll outsourcing introduced itself to Cambridgeshire County Council in 1992. Although IT outsourcing had been in place for a while by this time, for payroll this was something new, and the forerunner of many well-established payroll outsourcing organisations in play today. And during the 12 years until 2002,
9
| Professional in Payroll, Pensions and Reward |
Issue 85 | November 2022
MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Concurrent direct earnings attachments (DEAs) Q: What is the process regarding applying two individual DEAs to an employee’s payroll record? Could you advise if it’s possible for two orders issued for the same person to run concurrently? A: The first DEA should be deducted, which will reduce the amount of attachable earnings. The second DEA can be taken, providing the employee still has 60% of their net earnings left. It could be the case that the full amount of the second order cannot be taken, so a partial deduction can be made up to the protected earnings level. The protected earnings rule applies even where there’s instruction to apply a fixed DEA deduction rate. The maximum amount which can be deducted for a DEA is 20% of the net earnings if deductions are being taken at the standard rate, or 40% if deductions are being taken at the higher rate. For further information, refer to the Direct earnings attachment: a more detailed guide (http://ow.ly/tg8450L8yh8). Holiday purchase and national minimum wage (NMW) Q: We’re considering new benefits for tax year 2023/24, and one of the options is holiday purchase. Some employees’ pay would fall below the NMW if they participated in the holiday purchase schemes, so could we take net deductions of holiday purchase from them if they were to opt-in to the scheme? A: If employees are earning the NMW rate
What qualifies as a business expense? Q: An employee is working on a project to move a science lab from one building to a newly constructed one. During this time, he’ll be staying in a nearby hotel, as he’ll be expected to work long hours, starting early in the morning and working late into the evening. Even though it’s near his place of work, will this expense be classed as a business expense, rather than having to be recorded on a P11D, due to the long unsociable hours? A: To qualify under Section 336 of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003, the expenditure needs to be incurred wholly, exclusively and necessarily in the performance of the duties of the employment. The responsibility for justifying these tests have been met is on the employer. This type of expenditure qualifies for an exemption or a deduction where it’s part of the cost of travel necessarily incurred in the performance of the duties, or for necessary attendance at a temporary workplace. In general, payments by an employer for an employee’s accommodation and subsistence when staying away from home overnight on business aren’t taxed. Please see: http://ow.ly/F5sU50L8R3q for further information. Paying above the approved mileage rate Q: We’re considering paying more than the approved mileage rate to our employees. For example, if paying 50p per mile (5p above the approved rate),
of pay, or just above, any salary sacrifice arrangement will likely reduce their pay below the NMW rate and create a potential compliance issue. In answer to your question, no, the holiday purchase value cannot be deducted from net pay. A salary sacrifice is a contractual arrangement in which an employee forfeits gross salary, in exchange for a non-cash benefit, which then reduces pay before tax and National Insurance contributions (NICs) are calculated, and, therefore, cannot be a net deduction.
How would holiday purchase salary sacrifice schemes interact with the real living wage?
| Professional in Payroll, Pensions and Reward | November 2022 | Issue 85 10
ONLINE LEARNING
POLICY HUB
Payroll for non-payroll professionals
Money purchase annual allowance (MPAA) Q: If an employee informs the company that the MPAA now applies to their pension contributions, is it correct that contributions (employee and employer) are now capped at £4,000 per year? A: Yes, if someone has accessed their pension fund for the first time, the MPAA is triggered, and the individual can then receive tax relief on a maximum of £4,000 of contributions a year. A pension scheme administrator should be contacted for further guidance. Details for inclusion on employee payslips Q: Please could you confirm specifically what details should be included on employee payslips? A: Guidance from HMRC states: “Your payslip must show: l your earnings before and after any deductions l the amount of any deductions that may change each time you’re paid, for example tax and National Insurance l the number of hours you worked, if your pay varies depending on time worked. Employers must also explain any deductions fixed in amount, for example repayment of a season ticket loan. They can choose to do this either on a payslip, or in a separate written statement. This separate statement must be sent out before the first payslip. Employers must update this every year.” The guidance on employee payslips can be located here: http://ow.ly/ qORv50L8zbI. n
Duration Two consecutive half days
This course gives a high- level overview of the day to day obligations of the payroll function, including the fundamentals of payroll, statutory and voluntary payments, and deductions.
What can be classed as a business expense?
what would be the requirements in terms of tax, National Insurance and P11Ds? A: HM Revenue and Customs (HMRC) guidance confirms that if more than the approved amount is paid, the excess should be included on form P11D, or payrolled (if the company is registered to payroll taxable benefits). If the excess is recorded via form P11D, class 1 National Insurance contributions (NICs) must be collected via payroll. If the excess is payrolled, the relevant tax and class 1 NICs should be collected through the payroll. Where the exact amount is paid, there’s no requirement to notify HMRC. If the employee is paid less (or nothing), they’re entitled to a deduction for the shortfall as mileage allowance relief. For further information, please go to: http://ow.ly/ HY0950L8SrX.
Visit cipp.org.uk/training to book your place
Non-members price: £449.00 + VAT Members price: £349.00 + VAT
What details must employers include on employee payslips?
11
| Professional in Payroll, Pensions and Reward |
Issue 85 | November 2022
MY CIPP
Say hello to the board!
Liz Lay MSC FCIPPdip FHEA ACIPD, chair at the CIPP would like to introduce you to the CIPP’s board
The past year has been particularly busy within the payroll industry, with so many changes affecting our day to day lives. As chair of the CIPP, I felt that now would be a good time to reaffirm the current board of directors and what we, as a board, are trying to achieve on behalf of our members. First and foremost, the board of directors are volunteers. They represent the interests of their fellow members by providing financial oversight, setting the strategic direction and establishing policies for the organisation. For example, an important area of focus is, of course, on education, and the CIPP has established strong links with the establishment and is lucky to have Helen Higson as a board member. Helen is a highly respected academic, and a professor of higher education learning and management at Aston Business School. Having people like Helen on the board enables the CIPP to maintain an up-to-date understanding of how further education is developing.
Liz Lay MSc FCIPPdip FHEA ACIPD, chair: Liz has many years of experience in payroll and various leadership roles, has ran her own business and provides a wealth of knowledge and experience to the board. On a personal level, Liz enjoys running and cycling.
Ken Pullar FCIPP, chief executive officer: Ken’s career speaks for itself – global outsourcing roles, heading up business process outsourcing (BPO) operations, strategic operational delivery of BPO services and various service director roles. Ken’s outside interests include genealogy and the upkeep of war commission graves in Cornwall.
Clare Warrington MSc FCIPPdip AFHEA, vice chair: Clare’s career spans the human resource (HR), payroll and pensions industries, and she currently heads up compensation and reward at Gist, an international logistics company. Clare is a highly respected tutor and holds many academic qualifications herself. Clare’s passion is undoubtedly her horse, and she spends as much time with him as she can.
Stuart Hall MA PGMdip MCIPPdip: Stuart is currently an independent payroll consultant and a non-executive director on several boards. His career in payroll spans over 40 years, recently selling his very successful payroll bureau, Employer Services. He also provides a broad experience in sales, accounting and operational experience. Stuart’s passion is his music, from jazz to opera, and he will happily talk music with anyone.
Lou Gray ChMCIPPdip: Lou is a great communicator and enjoys helping others to develop and grow. She has extensive payroll knowledge and, over the years, has built strong relationships with governmental bodies. Lou’s passion is definitely food, and she loves going out to eat and trying different cuisines.
Dianne Hoodless MSc ChFCIPP FHEA: Dianne has been in payroll for over 30 years and is always looking for new challenges. She has been a tutor for the CIPP for over 15 years and has been able to pass on her wealth of knowledge. Dianne gives a lot to the payroll profession and this takes up a considerable amount of her time, but when she gets a chance she loves to spend time with her dogs.
| Professional in Payroll, Pensions and Reward | November 2022 | Issue 85 12
My CIPP
Cliff Vidgeon BA (Hons) CMA ACG ChFCIPP, director and Institute secretary: Cliff is responsible for modernising and improving the CIPP’s governance structures. His career background has been in the education sector, and he is currently chair of the Universities Superannuation Scheme’s Advisory Committee (the largest private pension fund in the UK). Cliff has many interests, including cricket. He can confirm he is a direct descendant of the man who accidentally invented blotting paper.
Helen Higson OBE DL ACIPP: In addition to what’s already been said about Helen, she’s a principal Fellow of advance HE and a national teaching Fellow, as well as a qualified executive coach. In 2011, Helen was awarded an OBE for services to higher education. In September 2020, she was appointed Vice Lord-Lieutenant of the West Midlands. When she has time for a social life, Helen’s revolves around her cat, Harold, and his many postings on Twitter, where he has quite the following.
Katie Sharpe MCIPPdip: Katie is a director at Mazars and the head of UK payroll services. Her career has encompassed all areas of payroll, specialising in outsourcing. She’s a people person and prides herself in being able to think outside the box. Katie is a passionate user of LinkedIn and uses her platform to engage with future payroll professionals. Katie’s time outside of work is mostly taken up by her daughters, and she also volunteers at weekends with her local homeless helper organisation.
We need you
Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP: Justine is the newest board member. Her tax career started after she moved back to the UK from Spain and joined HM Revenue and Customs as a direct entrant, then subsequently moved into private practice and then the Office of Tax Simplification. Justine has worked in tax policy at the Institute of Chartered Accountants of Scotland since 2016, where she’s widely respected as a tax and HR expert. Having managed several payroll teams over the years, she’s well versed in all aspects of payroll. Justine is a trained opera singer and also enjoys hill walking.
Jeremy Montgomery BA (Hons) FCIPP: Jeremy’s had a long and varied career, starting in local government, dealing with teachers’ through to dustmen’s payrolls. He moved to PricewaterhouseCoopers in 1989, where he developed an interest in international payroll and has continued this while working in various roles. He has a long association with the CIPP and was a tutor for over 15 years. Jeremy’s interests are fishing and hockey. Although he recently retired from playing hockey, he still has an interest and now takes up umpiring appointments throughout Kent.
I would like to finish by saying that I’m pleased to advise that the CIPP is now looking to appoint another two directors to the board for a three-year term and are welcoming applications. We’re particularly encouraging applications from those with pensions knowledge and experience. This is an exciting opportunity to become involved in the workings of the CIPP and play a major part in formulating payroll and pension strategy over the next few years and for the future. n
Members that were able to attend the recent annual conference had an excellent time and came away the richer for it. They were also able to meet many of the board of directors in attendance, to ask all those questions that had been on their minds.
13
| Professional in Payroll, Pensions and Reward |
Issue 85 | November 2022
PERSONAL DEVELOPMENT
# Be Payroll Emma Watson ACIPP, payroll manager at AWS Accountancy Limited, discusses why she became a member of the CIPP and how it has helped in her payroll career
Why did you choose to become a member of the CIPP?
as I wanted to gain a deeper understanding of government legislation and how to create contracts. Continuing my CIPP membership throughout, I completed the Foundation Degree Access Course in April 2021 and I’m currently in year two of the Foundation Degree in Payroll Management. What are your hopes for your future career? My hopes are to complete my Foundation Degree in Payroll Management late next year to complement my payroll management role. I hope that, as well as running a payroll bureau, I can introduce the option of payroll health checks to clients who process their own payroll, as I enjoy meeting people and helping them with their business needs. I’m currently working across both the payroll and tax department, so gaining tax knowledge is also important to me. We’re currently working towards achieving the CIPP’s Payroll Assurance Scheme accreditation. This would be a fantastic boost to the team and would mean receiving recognition for the dedication and hard work we put into our roles. I hope to keep gaining qualifications and experience to become the best I can within my role. Do you have any plans to study any CIPP qualifications or training course? I hope to complete the Certificate in Pensions Administration with the CIPP to gain all-round knowledge of payroll, HR and pensions. What advice would you give to those new to the payroll profession, who are just starting out in their careers? No two days are the same when you work in payroll. I’ve found, over the years, it takes certain skills to work confidently within a payroll bureau. You must be organised and have good time management and communication skills, but most importantly of all, you must be up for the challenge! It’s important to keep up to date with legislation, as this has a direct impact on the payroll department. Use all available resources to find your answers and be prepared to play detective when required. n
After joining the payroll department, I was curious about which qualifications were available within the profession. The CIPP came up top in my search engine, being the leading body for payroll professionals. I became a member of the CIPP to complete my Payroll Technician Course in 2018, to help keep my knowledge up to date with the constantly changing payroll world. How has your membership helped in your career? Membership with the CIPP has definitely helped in my career, and I couldn’t recommend it enough. The Advisory Service is a fantastic tool – the staff are very friendly and answer every query they receive. The monthly magazine advises on all the changes in payroll, as do the webinars and tools that are on offer. I love knowing that no question sounds silly and that the staff at the CIPP will support you to find your answer. What membership benefits have you used or enjoyed the most and can you give me some examples? I really enjoy keeping up to date with the daily news articles on the CIPP’s website, as well as receiving the monthly magazine. The Advisory Service was a lifesaver when we were calculating furlough pay. I also find it very useful receiving the Payroll Reference Book each year, as this is a great resource I can rely on to find answers to queries. Can you describe your payroll journey to us so far? I started my career in payroll in 2016 with no previous experience and began with on-the-job training. After a year and a half of watching webinars and reading documents from the Advisory, Conciliation and Arbitration Service, HM Revenue and Customs and The Pensions Regulator, I joined the CIPP, and started my Payroll Technician Course. This was a fantastic boost to my confidence as it confirmed my knowledge and understanding of the role. I really enjoyed getting my teeth into manual calculations and understanding the background behind certain tasks. I then completed a Level 3 human resource (HR) support qualification
| Professional in Payroll, Pensions and Reward | November 2022 | Issue 85 14
ADVERTORIAL
Finally! Payroll integration with benefits and discounts made easy
Daniel Cookson, marketing director at Moorepay : “We’ve made big changes to our integrated benefits and discounts offering, supporting your employees’ financial wellbeing when they need it most”
To keep your employees happy (and give them the very best deals), we offer hand-picked discounts that are continually benchmarked against industry competitors. While our comprehensive benefits package ticks all the usual boxes, and then some, when it comes to variety. So, how do we make it so Keeping track of benefit vendors is hard enough, but pair that with setting up new employees and staying on the right side of payroll legislation. Let’s not get started on worrying if a gym membership has pushed your new starter below minimum wage – benefits aren’t always easy. darn easy? Easy to use We’re passionate about lightening the load for payroll professionals. Our cloud- based software keeps track of everything for you, including: l shutting down enrolment windows automatically l running reports to check minimum wage impact l automatically calculating employer and employee tax and NI contributions. All of this is wrapped up with Implemented successfully, a benefits and discounts platform will help you attract and retain talent, reducing your recruitment costs and keeping turnover low
The labour market as we know it We don’t need the Office for National Statistics (ONS) to tell us unemployment is at the lowest it has been for 50 years, anyone searching for talent has already notified us. Gone are the days when a favourable annual salary is enough for employees. With the ever-looming cost-of-living crisis, employees are demanding attractive rewards packages. But those of us in payroll know when it comes to implementation, it’s easier said than done. With manual deductions from payroll, complex reporting and strict minimum wage legislation, navigating the world of benefits and discounts can be tricky, with even the savviest of payroll professionals wincing at the thought of getting benefits wrong. Benefits: friends not foes Providing non-financial benefits for employees has never been more prevalent, or easy. Implemented successfully, a benefits and discounts platform will help you attract and retain talent, reducing your recruitment costs and keeping turnover low. While human resources might be hurtling towards benefits and discounts with a fire in their belly, they can have us payroll professionals reaching for the red tape. Of course, our focus is getting our people paid right and on time. Adding benefits into the mix can make this more challenging, with complexity from all angles, like tax, National Insurance (NI) contributions, take home pay and payslip production. That’s exactly why we built our benefits and discounts platform, to minimise the impact on running and processing payroll.
comprehensive reports and super speedy implementation time; there’s not a lot not to like. Easy to access Whenever shiny new software is introduced, perhaps there’s a little nagging voice in your mind saying, ‘extra payroll administration.’ Well, not with us. Employees can quickly access benefits and discounts through single sign-on, via self- service, with a quick view of active benefits, available discounts and schemes they can enrol onto. Love it or hate it, employees will see benefit deductions on their payslips, with a view of their total deductions in the benefits module – meaning they can quickly see all the associated costs. With all their information accessible 24/7 at the touch of the button, you won’t need to worry about extra payroll queries. We’ve modularised our software too, so whether you’re on a tight budget, already have something in place or fancy one module and not the other, we’ve got you covered. Easy to trust It goes without saying, trust is a huge part of payroll. We pride ourselves in processing payroll for thousands of people up and down the country, considering complex variances in pay, benefit selections and of course, legislation. With our cloud-based software, backed by the latest Microsoft Azure technology, we make processing payroll and legislative compliance worry-free. Plus, we’ve got lots more planned for our benefits and discounts modules – you can expect a wider range of suppliers, access via our mobile app and much more. If you’d like to find out more about our benefits and discounts and the technology that backs it up, we’d love to hear from you. q
We’ve made sure our software takes care of pay adjustments, calculations and contributions, making the whole implementation thing a doddle.
15
| Professional in Payroll, Pensions and Reward |
Issue 85 | November 2022
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62Made with FlippingBook - Online magazine maker