COMPLIANCE
What’s yours is mine: how to identify a pecuniary liability
Fiona Smith MCIPPdip, training manager, at the CIPP discusses the peculiarity of the pecuniary liability
Introduction When we consider reporting employee remuneration, it can be easy to concentrate on just the cash payments that payroll departments are aware of, and not to form a full picture of all reportable earnings. Any benefit to an employee, or anything that has direct monetary value, can also be considered earnings. How employers need to report these earnings to HM Revenue and Customs (HMRC), and the implications for tax and National Insurance (NI) will depend on the method of provision and whether what has been given can be considered to have ‘money’s worth’. One way of providing ‘money’s worth’ to employees that may not be so
obvious as cash salary or wages is where an employer settles their employee’s ‘pecuniary liability’. What is a pecuniary liability? When an employer pays for something that the employee had a legal liability to pay, such as a mobile phone contract or a fuel bill, then this is what’s known as a pecuniary liability. To understand how this situation can be identified it can be useful to think of three different scenarios for paying for an employee’s mobile phone: 1) the employer arranges a contract with a mobile phone provider to give each of their employees a handset and a monthly
One way of providing ‘money’s worth’ to employees that may not be so obvious as cash salary or wages is where an employer settles their employee’s ‘pecuniary liability’
| Professional in Payroll, Pensions and Reward | November 2022 | Issue 85 34
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