MEMBERSHIP INSIGHT
for working rule agreements (WRAs). An employer must decide what the tax position is primarily, because the NICs position (https://goo.gl/3JbFBM) should mirror that. This link – https://goo.gl/t444NG – to GOV.UK website sets out how an employer should deal with WRAs for site-based employees; the employer can only apply the WRAs if they strictly apply all the conditions. You may need to check the reason the other bureau has applied NICs to the payment – they may have received a ruling from HMRC in this case; or you may wish to seek a ruling from HMRC yourself. The rates of payment which can be paid under the strict arrangements can be found on GOV.UK website here https://goo.gl/ Hp6Hh4. Q: We have a director who has now left the company and was given shares. The director has asked whether the company has informed HMRC under ‘section 91’. To what is ‘section 91’ referring? A: I believe the former director may be referring to Regulation 91 of the Income Tax (Pay As You Earn) Regulations 2003 (https:// goo.gl/JhYSLd). This covers the situation where an employer has made a termination payment that is a mixture of cash and benefits above £30,000 which as part of a termination agreement must be reported to HMRC, although usually the shares should go through the payroll. For further guidance please look at the CWG2 Employer Further Guide to PAYE and NICs (https://goo.gl/ aVJQDR) and the 480 Expenses and Benefits a tax guide (https://goo.gl/e6GvKU). Q: I have recently started working in payroll for a football club. We have employees who work on a full-time contract and they also work as a casual on match days on a separate contract, with both contracts paid under the same PAYE reference. We also have employees who work for us on a full-time contract, but also have a second job working elsewhere. Currently we treat both situations as separate employments and payroll records. The payments for the second employment don’t reach the lower earnings limit (LEL) and as such no class 1 NICs are paid. However, should we be aggregating the earnings, or is it correct to calculate NICs for each employment? A: In the first scenario, you should aggregate the earnings if it is practicable for you to do
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m.
to 4.30p.m. on Fridays. It is free to all CIPP members * , students and attendees of approved CIPP courses and conferences in the last six months. Call 0121 712 1099 , email advisory.service@cipp.org.uk or visit cipp.org.uk to live chat.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: I am enquiring as to whether it is compulsory for public sector bodies to charge a trade union an administration fee for providing a ‘check-off service’ for the employees regarding collection of their union fees? A: Under section 116B (1) of the Trade Union and Labour Relations (Consolidation) Act 1992, as inserted by section 15 of the Trade Union Act 2016 (https://goo.gl/ PiUHhE), a public body can only assist the employee in making a payment of union fees to the union in certain circumstances which are: the employee has the option to pay union fees in other ways, and the union makes a payment to the public body as an admin fee for carrying out the check-off service. The administration fee should reflect the true cost to the employer for providing the check-off service. Q: We have been informed by our human resources team that we should include mileage payments in addition to overtime when calculating the average for holiday pay. Is this correct? A: This link from the website of the Advisory, Conciliation and Arbitration Service (https://goo.gl/luoZhQ) shows that potentially you may need to include it. This extract from the guidance says that “Work- related travel can have a number of different meanings but for most employment matters this will usually mean any travel that is made for work purposes that is not a part of a worker’s commute to their usual place of work. On 4 November 2014, the Employment Appeal Tribunal issued a judgment in a case joined to Bear Scotland v Fulton which covers how holiday pay
should be calculated in relation to work- related travel. Where payments are made for time spent travelling to and from work as part of a worker’s normal pay, these may need to be considered when calculating holiday pay.” Q: Where employees are Scottish tax payers will these new Scottish tax brackets have any impact on how many childcare vouchers (CCVs) someone can have? A: The threshold limits on how many CCVs are available to an employee without there being an income tax and 1 National Insurance contributions (NICs) liability is based on legislation for the whole of the United Kingdom (UK) and has not been devolved to Scottish legislation. You only use the thresholds for basic, higher and additional rates of income tax in the case of CCVs which apply to the whole of the UK. HM Revenue & Customs’ (HMRC’s) Employment Income Manual , which explains this, can be viewed at https://goo. gl/3L9P4o. Q: I have a potential new client who has approached me to provide a payroll service for them. They have employees in the construction industry and pay fares to site-based employees. Should I deduct class 1 NICs from fares paid under the Construction Industry Joint Council (CIJC) agreement? Tax is not usually deducted as per the CIJC agreement, but the previous payroll bureau has deducted class 1 NICs but not income tax under pay as you earn (PAYE). A: You need to consider the position
| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 6
Made with FlippingBook - Online magazine maker