Professional May 2018

Official publication of The Chartered Institute of Payroll Professionals

in Payroll, Pensions & Reward

Issue 40 May 2018

Review of modern working practices

Termination payments Realignment

Safe and secure Advancing cyber security

Maintaining momentum Workplace pension impetus

CIPP update | Policy hub | Professional development

Our innovative cloud based payroll & HR solutions include software, consultancy, training and managed services which are quick to set up, with no need for installations, downloads or upgrades.

Comment is free, facts are sacred. Charles Prestwich Scott (1846–1932)

Editor’s comment

The above adage, which I discovered recently when reading The Guardian online, resonated with me for several reasons, one of which is that in payroll facts are essential. Well, imagine the effect of processing payroll – or calculating pension

There is also the matter of data security. Surely, data are also facts? Recent startling revelations about the accessing and use of Facebook members’ data for political campaigning raises concerns about organisations’ cyber security measures. Articles on cyber security can be found on pages 37–41. And then there are pensions…Might we soon see pensions being compared on websites such as Go Compare? To achieve meaningful comparisons, facts – values and money – will be essential. See page 35 for, well, the facts.

contributions and entitlement – using unreliable information. Another reason for the adage resonating is because of the evidence now emerging about the gender pay gap in the UK. This gap would have remained hidden were it not for the statutory requirement on certain employers to begin reporting annually details of pay differences. See pages 12, 26/27 for information and articles. Gender pay equality in the workplace is long overdue, so would transparency of each worker’s salary and remuneration swiftly progress pay equality in companies?

Mike Nicholas MCIPP AMBCS Editor

It’s that time of year when we’re all starting to look forward to our summer holidays and that rest and relaxation we all deserve; but before we take that break I want us all to look back at our achievements over the past Chair’s message

Later in the year at our AGM we will once again be asking all our members to vote for their new board members for 2019. At least two of the current board will be standing down, due to our rotation rules and we are looking for additional candidates from our membership to stand for election. I was delighted last year to receive so many applications from prospective board candidates, and we welcomed our three new directors onto the board in January this year. It would be great to see lots of new candidates again this year, and if you stood last year but were unsuccessful perhaps you should consider re-standing – after all, it took me two attempts before I was elected in 2008, so you never know.

year. I’m certain that there are many unrewarded individuals and teams around the UK, who really deserve recognition for their efforts and for going over and above what is normally expected. As part of our Annual Conference and Exhibition, the Annual Excellence Awards have been especially designed to recognise outstanding achievements. Nominations are now open and will remain so until 10 August 2018. You have plenty of time to browse the categories which include: newcomers, influencers, managers, teams, projects and service providers. If you think you or your team deserve that extra recognition, be sure to nominate and join us at one of the most prestigious events in the payroll calendar in the UK.

Eira Hammond ChFCIPPdip Chair, CIPP

I trust a successful year end has come and gone – or maybe there’s still some finishing work to complete? I’m reminded how essential and successful CEO’s message

So, this is where the Institute continues to support you as a member. Let me highlight for those new to the profession or seeking a refresher, the CIPP payroll technician certificate continues to excel in its field by providing the necessary education, training and practical experience and all delivered online. We’ve recently completed an in-depth survey on the ‘Future of Payroll’. The survey will be available to read in the resource library on our website https://www.cipp.org.uk/ . I was intrigued to read in the survey that one in four enquiries to the payroll department relates to tax coding issues. In this day and age of real time information and its aim of improving the operation of PAYE, it is apparent work and education is still required.

we are as an industry in supporting UK PLC. It’s worth reminding us all of the impact payroll has on the UK economy through contributing towards the £4.46bn collected through income tax and National Insurance. As I’ve remarked in the past, many people still take for granted the pushing of a button and their pay will just happen. And yes, technology has made the processing of payroll a more efficient process. However, there is still no substitute for being able to work out the gross to net payment and understanding all the legislative rules and processes that ensure we pay accurately, timely and compliantly. All of which ensures an accurate collection of income tax and National Insurance contributions by payroll professionals; quietly and efficiently.

Ken Pullar FCIPP Chief executive officer, CIPP

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| Professional in Payroll, Pensions and Reward |

Issue 40 | May 2018

in Payroll, Pensions & Reward PROFESSI NAL

Also available online at payrollpensionsandreward.org.uk

Contents

May 2018

39

Mike Green shares advice to help HR and payroll teams Cyber security heroes

Features

16

18

14

ESC, TFC, BEA, CAN, OpRA, etc Jill Smith provides (almost) an ABC of childcare changes

Caught by PSD2? Alison Donnelly provides information and advice

Termination payments John Harling explains what is changing

26

30

25

Equal treatment, PCP, redundancy Nicola Mullineux reviews decisions in three cases

The value of rewards Neil Tonks sets out arguments for total reward statements

Gender pay gap reporting Diana Bruce reviews the first year

| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 2

34

32

Editor Mike Nicholas 01273 412 836 | editor@cipp.org.uk Advertising Jill Bonehill 0121 712 1033 | advertising@cipp.org.uk Design James Bartlett and Nicole Gumery design@cipp.org.uk Printing Warwick Printing Company Ltd

Pension risks Jonathan Watts-Lay provides information and advice

Informing uniformity Danny Done warns that practices may be unlawful

35

37

Chief executive officer Ken Pullar FCIPP CIPP board of directors

Jason Davenport ACIPP Suzanne Gallagher MCIPP Stuart Hall MCIPPdip Eira Hammond ChFCIPPdip Ros Hendren MSc FCIPP, Mgr, FCMIdip, FHEA Lizabeth Lay MSc FCIPPdip Karen Thomson MSc ChFCIPP, FHEA Cliff Vidgeon FCIPP Ian Whyteside MCIPP, FMAAT, ATT

Maintaining momentum Samantha Mann delves into the review of AE

Babies, baths and bathwater Henry Tapper takes a data-driven approach

43

40

Useful contacts Membership membership@cipp.org.uk 0121 712 1073 Education education@cipp.org.uk 0121 712 1023 Training admin@cipp.org.uk 0121 712 1063 Events events@cipp.org.uk 0121 712 1013 Marketing and sales marketing@cipp.org.uk 0121 712 1033 General enquiries

Counting the cost Lisa Gillespie contends HR must get involved in cyber security

Safe and secure Kavitha Sivasubramaniam looks at the role of employers

Regulars

01 Editor’s comment, and Chair’s and CEO’s message 04 Membership insight On your behalf, Advisory, Five minutes with 09 Events Horizon 11 Professional development Diary of a student, CPD 12 CIPP update New course, GPG reporting, CIPP short-listed 14 Payroll insight Review of modern working practices 23 Payroll news Events, news and developments

25 Reward insight 34 Pensions insight The last stagers – TPR 39 Feature articles Cyber security 44 Industry news 52 Confessions of a payroll manager

info@cipp.org.uk 0121 712 1000

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 2018. The Chartered Institute of Payroll Professionals, CIPP, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 Fax 0121 712 1001 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 retreival 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.

Additional online content 28 Mind the pay gap 29 Lifting the lid on discrimination 50 Relocation, USA 51 Global leadership training

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| Professional in Payroll, Pensions and Reward |

Issue 40 | May 2018

MEMBERSHIP INSIGHT

On your behalf

Policy team update The CIPP policy team provides an update on two key issues

Taxation of employee expenses “If your employee has a meeting away from their normal workplace and they pass their workplace en route to the meeting, do they claim the mileage from home to the meeting or just from their workplace to the meeting?” This was the question we asked through our website quick poll during the second half of January and the first half of February. We received 956 responses in total: l 77% said they claim from the workplace to the meeting l 21% said they claim from home to the meeting, and l the remaining 2% do not claim at all. HM Revenue & Customs’ (HMRC’s) policy used to be that if the employee passed their normal workplace to go to a meeting then they could only claim the business mileage from the workplace and not from home. Did you know that HMRC’s rules changed so that as long as the employee didn’t go into the workplace and do work en route to the meeting (they can pick up work papers etc) then the whole journey is viewed as business mileage? The excerpt ‘Passing work on the way to somewhere else’ from the 490 Employee travel – A tax and NICs guide for employers (https://bit.ly/1pdCBLY) confirms this. However, It was identified by a CIPP member that HMRC’s Employment Income Manual (see https://bit.ly/2pMxDbz) does not reflect the guidance in the 490. We contacted HMRC about the inconsistencies in their guidance and we have been assured that they will be looking into this as part of their work to improve guidance on expenses. The government announced at

business to Birmingham and back. He drives directly from home to Birmingham but stops off at his office to pick up some papers. His stop is incidental to his business journey. His business journey is from his home in Southampton to Birmingham and back. Tax relief is available for the cost of his journey from his home to Birmingham and back. Example Andrew drives each day between his home in Gloucester and his office in Bristol. One day he is required to attend a training event in Bath. Rather than travelling directly to Bath from his home he has to stop off at his office in Bristol to take part in a telephone conference about a project he has been working on. After the telephone conference has finished he drives to the training event in Bath. As Andrew has stopped off at his workplace to carry out substantive duties on the way to the training event in Bath the first part of his journey between home and Bristol is ordinary commuting. Tax relief is available for the cost of his journey from Bristol to Bath, and from Bath back to his home address as this is travel to a temporary workplace. In mid-February this year HMRC’s Software Developers Support Team (SDST) provided information to make software developers aware of minor drafting errors in the EXB Schema for 2017–18 and the FPS Schema for 2018–19. The errors relate to the P11D return and payrolled benefits in kind (BiKs) only, and specifically to cars (note the P46(Car) return is unaffected). SDST said that the optional remuneration Errors in the EXB and FPS Schema for company cars

Autumn Budget 2017 that it will work with external stakeholders to explore possible improvements to the guidance on employee expenses, particularly on travel and subsistence, and the process for claiming tax relief on non-reimbursed expenses. ...explore possible improvements to the guidance on employee Please keep feeding to policy ( policy@ cipp.org.uk ) any inconsistencies or issues you may find with guidance. Passing work on the way to somewhere else 3.48 An employee may pass a permanent workplace on the way to or from a temporary workplace. If the employee stops and performs substantive duties at the permanent workplace then there are two journeys – ordinary commuting between home and the permanent workplace and a business journey between the permanent workplace and the temporary workplace. Tax relief will be available for the cost of the second of these journeys – but not the first. 3.49 Where the employee does not stop at the permanent workplace, or any stop is incidental to the business journey, all of the journey is business travel. Example Darren drives each day between his home in Southampton and his office in Winchester. One day he has to travel on

| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 4

Policy hub

arrangements (OpRA) legislation for cars ‘allows’ for a negative value for the car benefit in kind, but this was not included in the original Schema. This occurs in a very small number of situations (less than 200 in total) such as where an employee has made a capital contribution for a car and the car is held for a short period of time. In view of the very small number of cases affected by this error SDST decided not to revise the Schema. The negative figure should be suppressed in line with the Schema. SDST advised employers that to ensure the right tax outcome, they should either: l file the P11D return as normal with a zero figure (in line with the Schema) and submit an amendment to the P11D return noting the negative value (the amendment should be in writing), or l submit the P11D return on paper with the negative value. Whilst it is very unlikely that this would arise in a real time information submission, SDST said again that the negative figure should be suppressed in line with the Schema. Data item 41A (Taxable pay in this employment including payrolled benefits in kind – Year to date figure) should be

reported as the net figure (cash less any negative payrolled (BiKs); followed by “there is no reason for employers to contact HMRC in these cases”. ...CIPP continue to request at least an eighteen-month lead time from HMRC... Following SDST’s publication about the errors, several members contacted the Policy team with concerns about the legislative irregularity. The CIPP arranged a conference call between representatives of HMRC and the CIPP, summarised as follows: l HMRC confirmed that its guidance to return a negative P11D value in the particular circumstances involving capital contributions would stand and will apply for the 2017–18 and 2018–19 tax years. Where the company car benefit is being payrolled then the payrolled benefit will be a negative value resulting in the employee’s taxable pay being reduced.

l HMRC further confirmed that an affected employee’s tax code would be increased (as opposed to the decrease that usually results from a P11D submission) and that employers would be able to reduce the amount on which Class 1A National Insurance contributions are calculated by the negative P11D / payrolled value. l HMRC were pressed as to why tax year 2019–20 would be the earliest point at which a more satisfactory resolution of the problem could be reached. HMRC stated that primary legislation, not secondary legislation, was required to resolve the matter. This being a taxation issue, the necessary primary legislation is a Finance Bill/Act. This is yet another prime example of how important it is that consultation with stakeholders happens well in advance of an implementation date. And if primary legislative changes are required then this should be identified early in the consultation process. The CIPP continue to request at least an eighteen-month lead time from HMRC, primarily to ensure that payroll software developers can update their products in a timely manner. n

Your Institute needs you

CIPP board of directors - positions available

Board directors should possess the following: l Knowledge and understanding of the objectives and range of activities of the CIPP l Ability to think at a strategic level, understanding both the process of development and implementation of policy and the implications of strategic and policy decisions on the CIPP’s resources l Ability to understand budgets and the financial wellbeing of the CIPP l Analytical understanding and a logical approach to problem solving l Ability to see the external environment objectively l Ability to promote the CIPP internally and externally in a positive and constructive way l Leadership ability, influencing others and taking decisions as necessary l Understanding of a team member role, so as to listen/work constructively with others l Specific skills to enhance professionalism including presentation (technical and practical), oral communication (including summarising) and interpersonal skills

The role involves a commitment to attend four quarterly board meetings, plus occasional ad-hoc meetings (some of which will be by telephone or video conference), as well as representation at a number of Institute events and conferences. During a year the total commitment is expected to be around 8–12 days. All applicants will be required to submit a candidate statement of no more than 400 words which will be submitted to the appointments committee for review in accordance with the role specification. Candidates who meet the criteria outlined in the role specification will be voted for by the CIPP members at the Annual General Meeting. For details on what should be included within the candidate statement visit cipp.org.uk/agm . Being a member of the board of directors is a serious commitment; please only apply if you have the time to dedicate to the CIPP and payroll, pensions and reward professions. Office is held for a minimum of three years and a director may stand for re-election.

Board directors must be either a current associate, full, fellow or Chartered member of the CIPP.

Apply online at cipp.org.uk/agm or email info@cipp.org.uk for more information . The closing date for applications is 31 August 2018 and the appointments committee is meeting in September.

cipp.org.uk @CIPP_UK

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| Professional in Payroll, Pensions and Reward |

Issue 40 | May 2018

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

This qualification sets out to ensure an in-depth understanding of payroll, and the complex payroll legislation involved, and also provides management skills including performance, time, project and operational management Foundation Degree inPayroll Management Join over 15,000 * qualified payroll professionals in the UK

Policy hub

Q: I am seeking guidance regarding employees who have earned over the income limit for the personal allowance. For example, if an employee commences employment on a salary of £110,000 and completes a new starter declaration with box B ticked, should we automatically put them on a 0T code or the emergency code? A: You would use the normal emergency/ personal allowance on a month-one basis. You cannot change this to ‘0T’ even though you know they will earn over the £100,000 income limit for the personal allowance. If the employee gives you a form P45 and this states a different code than the standard personal allowance this can be operated, otherwise you will have to await a P6 notice of tax code change direct from HMRC. Q: Early in 2017, we acquired two new businesses into our group and successfully merged the employees from these businesses into our main PAYE scheme. Some employees from the new business were and still are in receipt of benefits in kind and we currently report our benefits in kind via a P11D return. Do I need to complete a single P11D return for the whole tax year on the new PAYE scheme or will there be two P11D returns: one under the old PAYE scheme and one under the new PAYE scheme? A: The number of P11D returns you produce will depend on the type of change your business has experienced. If your business has undergone a PAYE submit two P11D returns for each relevant employee: one under the original PAYE reference for the period up to the merger date and one for the new PAYE reference from that date. If you contact HMRC and are told your business has undergone a succession, you must submit one P11D return under the new PAYE reference for each employee in receipt of company benefits. This must contain the total information to be reported for both PAYE scheme references. If you have not contacted HMRC to advise them of business succession and your employees continue to receive company benefits, you must submit two P11D returns for each employee: one under the original PAYE reference for the period up to the succession date and one under the new PAYE reference from that date. n scheme merger and your employees receive company benefits, you must

so. You can find information on what HMRC would consider as not reasonably practical at this link https://goo.gl/2UDnJE. If HMRC accept that you should work out NICs for each employment separately, the employer will be able to continue as normal. In the second scenario, it will depend on whether the companies are deemed to be businesses working in association or not. If the companies are not deemed to be working in association then you would calculate NICs separately. It is only if the companies are deemed by HMRC to be working in association that you would aggregate the earnings for NICs purposes. HMRC explain the definition of working in association in this link https://goo.gl/ Q6R55s. Q: Until recently we had a group of companies that had a total wage bill of less than £3,000,000, so we did not report for the apprenticeship levy. We have recently employed a senior employee whose salary has taken us over the threshold, so I have applied the levy to the payroll from this month (December 2017). Will this incur a charge backdated to April 2017? A: The apprenticeship levy is an annual charge, applicable for the whole tax year. This means it will backdate to April 2017 through to December 2017. Below is a direct link to HMRC’s Apprenticeship Levy Manual on GOV.UK website, which provides examples of how to calculate the levy. Please refer to example 5 as this gives guidance relevant to your situation (https:// goo.gl/pcLHXc). Q: We have a new client who only has casual employees on the payroll. They only work a few hours a week, including weekends, and all employees are earning below the LEL. Will the client need to set up and run a payroll scheme or is it the employee’s responsibility to inform HMRC of any extra income? A: A PAYE scheme must be requested if any of the following applies to one or more employees: l you’re paying them at or above the PAYE threshold l you’re paying them at or above the LEL l the employee already has another job l they are receiving a state, company or occupational pension l you’re providing them with employee benefits.

Spring enrolments now open

Delivered in conjunction with

For more information or to enrol: Visit: cippqualifications.org.uk Email education@cipp.org.uk

Call: 0121 712 1023 Live chat with us

cipp.org.uk @CIPP_UK

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Issue 40 | May 2018

| Professional in Payroll, Pensions and Reward |

*correct at time of publication

MEMBERSHIP INSIGHT

5 minutes with…

Lizabeth Lay MSc, FCIPP, FHEA, ACIPD Board director, CIPP

education, membership and recognition’. I have always been extremely passionate about raising the profile of the payroll profession and more recently the pension profession. Having been an ambassador for the CIPP for a good number of years I will now be able to represent them at various events and meetings reaching out to members and potential members. From the knowledge and skills that I have gained, I will be able to contribute constructively to the strategic direction of the Institute What does the future hold for the future of payroll, pensions and reward? Payroll, pensions and reward is an ever- changing landscape and impacts on the financial affairs of a business as well as the human resource management. Payroll needs more and more to support business in the quest to be compliant, continually reviewing policies and procedures, contributing to total quality management, delivering best practice and providing relevant data to support areas such as gender pay gap reporting and the apprenticeship levy, to name but a few. With the first prosecution by The Pensions Regulator, automatic enrolment and re-enrolment are likely to keep the profession busy. Technology continues to move at a fast pace, with artificial intelligence now on the agenda, continually changing the way we work and supporting the increasing movement of global operations. n

Tell us about your career and background in payroll I have had quite a diverse career in payroll, falling into it in my first job working for a sheet-metal engineering company. I then worked for a company where I provided payroll advice to various organisations, ranging from accountants and one-man companies through to multi-nationals. I covered every aspect of payroll, alongside writing articles for payroll magazines and proofreading payroll publications. The next phase of my career was as a payroll trainer before being promoted to associate director of professional learning. I managed the training function, conferences, events and developed the Payroll Quality Partnership Scheme. More recently I became a consultant working with a credit union. I continue to work on the Payroll Quality Partnership Scheme, alongside working on the Payroll Assurance Scheme and as an apprenticeship assessor. Throughout my career, learning has been a passion as has sharing my knowledge and experience with others. When did you first become involved with the CIPP? It was 1998 when I started working for

the company where I was providing payroll advice. I was given a half-day’s training by the lady I was taking over from – we immediately became friends and kept in touch. As I had studied payroll and business management with Payroll Alliance, she talked me into taking the additional module with the then IPPM in order to become a tutor. Tell us about your role at the CIPP My main role currently is as a tutor on the now Foundation Degree in Payroll Management (FDPM) and the Masters Degree in Reward and Business Management. I am also a moderator for the FDPM and occasionally invigilate exams and deliver training. What does being appointed to the CIPP board mean to you and what can you bring to the CIPP’s future strategy?? I was overwhelmed when told I had been appointed and felt extremely proud that the membership had the confidence in me to work with the board to take the CIPP forward in its mission to ‘Lead payroll and pension professionals through

| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 8

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. Events Horizon Scottish National Conference and Exhibition 5-6 September 2018

National Forums Exclusive to CIPP members*, the national forums are an excellent opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation and the impact GDPR may have on payroll and HR. This event will also provide an excellent networking opportunity with other CIPP members.

As the only payroll conference in Scotland, it provides the perfect opportunity to hear the latest legislative changes, meet a range of exhibitors and network with like-minded professionals. Why should I attend? ● Learn about the key changes to payroll and pensions legislation ● Network with other local members ● Ensure you are on the right track to achieve your CPD

Available dates

Bristol PM Belfast PM

Newcastle AM

3 May

28 June 17 July 19 July

Birmingham PM

10 May 17 May

Manchester PM

Online webinar AM

Glasgow PM

5 June

If you are an affiliate, trial, web user or student member and you’re interested in attending a national forum, please login to ‘My CIPP’ at cipp. org.uk where you can upgrade your membership; or email membership@ cipp.org.uk for more information on how to upgrade.

Accommodation and networking dinner is provided on Wednesday 5 September.

CIPP Alumni event 13 June 2018

Taking place 13 June 2018 in central London, the CIPP Alumni event is a unique opportunity for Foundation Degree and Diploma students to come together and network; as well as hear BA and MSc graduates share industry insights from their dissertations.

For more information please call 0121 712 1013 , or to book your place please visit payrollevents.org.uk or email events@cipp.org.uk

Training courses

Course

Date *

Location

General Data Protection Regulation Global mobility key payroll issues Payroll and HR legislation update

Can’t find a date or location for your needs?

Online

4 June

Manchester

31 May

Let us know by visiting cipp.org.uk/trainingreg . New dates and locations may be added if there is

London Solihull

5 July

6 June 7 June 30 May

Bristol

Manchester

Payroll for Scottish employees

London

6 June

Have you considered in-house delivery of training courses?

Solihull

P11D,expenses and benefits

11 June 20 June

London

Salary sacrifice and other optional remuneration arrangements

In-house delivery can be very attractive for organisations as they can train large numbers of employees at a reduced rate, without the additional associated costs, such as travel and ‘lost time’.

London

19 June

* Eligible grades of membership only / Dates are subject to change

The full list of CIPP training courses can be found at cipp.org.uk/training

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| Professional in Payroll, Pensions and Reward |

Issue 40 | May 2018

PROFESSIONAL DEVELOPMENT INSIGHT

Diary of a student…

Claire Treadwell MCIPPdip Senior bureau manager, IRIS and Cascade Payroll Managed Service

Did the fact that the CIPP is Chartered or recognised within the industry influence your decision to enrol with the CIPP? And were there any particular modules which were of interest prior to enrolling? Yes, it did influence my decision. There isn’t any other qualification available at this level. It was important to me that I did a course through an organisation that my peers and clients knew, so that they could recognise the level of attainment. I was particularly interested in the benefits module. Benefits in kind are always an area of contention and with new legislation coming in I thought it would be really interesting to find out more. I really enjoyed the module that reviewed payroll processes as it gave me some sound ideas that I have used in my current role. For someone who is thinking about studying for a CIPP qualification, what would your advice be to them? Think carefully about what you want to get out of the course and be determined to achieve that. I started the course with the determination that I was going to do my best and I got great results. I would also say never give up. There are times when it is hard; and you need to overcome that and look at what you are trying to achieve. Always look at what you are aiming for as it makes the course go smoother. Ask for help. Your peers and people around you will have loads of great ideas or may have even done the course themselves. My best results came from asking those around me for ideas. n

Can you give us a brief background into your life? I moved from Yorkshire ten years ago and now live in a village on the outskirts of Newcastle. I love baking, gardening and visiting the local attractions. Can you give us an insight into your career and qualifications? I studied business management at university and discovered I had a talent for computer software. Since leaving university in 2000, I have always worked for human resources and payroll software companies. I have had various roles, ranging from an implementation consultant to a software product manager. The fact I have worked in various roles gives me a real insight into how a project can run, end to end. Why did you choose to study the Foundation Degree? When I first started the Foundation Degree, I was a senior product manager which involved looking after the IRIS product suite for IRIS payroll software. I felt the Foundation Degree qualification would give clients confidence in my knowledge and understanding of the payroll industry. I also believed it would improve my understanding of the complex legislation when dealing with our business analyst team.

How important is this degree in relation to your career? The degree has been invaluable and steered my career in a completely different direction. When I started my degree I was a senior product manager but as the Foundation Degree progressed an opportunity arose for a senior bureau manager within the same company. The position was to grow two payroll bureau teams and increase business. After completing the Foundation Degree and gaining great results, I was asked if I was interested in this role. I subsequently applied and was successful. I can honestly say that without the experience and knowledge gained from the Foundation Degree in Payroll Management I would not have applied for the role. How did you cope with the work-life balance and your study? I am a busy person by nature. I have a demanding full-time job and a family, all who deserve time and attention. I chose to work every evening after my little boy went to sleep. I found working most evenings meant that I had the weekend off and was able to enjoy the much- needed family time. It was hard work but well worth it as I had the time to relax and, of course, drink the occasional gin. More importantly, my little boy did not actually miss any time with me or even know I was studying.

| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 10

Professional Development Insight

How healthy is your payroll?

Continuing professional development

Payroll Assurance Scheme The CIPP payroll assurance scheme aims to ensure that your payroll people and processes are up to date and compliant.

M ake the most out of your CIPP membership with our continuing professional development (CPD) tool and stand out amongst other payroll professionals. From boosting your confidence to strengthening your professional credibility, CPD can accelerate your career development and make working life that little more interesting. This membership benefit allows you to highlight your contributions as you progress in your profession. Why is CPD important? CPD is a combination of approaches, ideas and techniques that will help you manage your own learning and development. This is an important aspect of your career as it demonstrates to yourself and your organisation that you are developing as an individual and as an employee. To be able to demonstrate your growth through your CPD portfolio is highly valued by both our members and employers. Start logging your CPD sooner rather than later to ensure you have an accurate and beneficial log of your learning activities. Please note, in order to renew your membership, we do require that all members actively record their learning by logging at least one piece of CPD.

What can I log as CPD? Any form of learning or development that benefits you in your professional environment. If you have learned something new, then this is CPD. Examples include: l using the CIPP’s Advisory Service l taking part in on the job learning l reading News On Line , Professional in Payroll, Pensions and Reward or another publication l networking with new or existing contacts l attending training courses and/or events. How do I log CPD? 1. Log into the members’ area of cipp.org. uk ‘My CIPP’. 2. Find ‘My CPD’ on the drop-down options. 3. Click on the blue box ‘add a new record’. 4. Complete the form, record your activity and click ‘submit’. n

For more information: Visit: cipp.org.uk Email compliance@cipp.org.uk Call: 0121 712 1000 Live chat with us

Contact us If you require any help with your CPD please email membership@cipp.org. uk or call 0121 712 1073.

cipp.org.uk @CIPP_UK

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Issue 40 | May 2018

| Professional in Payroll, Pensions and Reward |

*correct at time of publication

CIPP update

Gender pay gap reporting – the first year through the lens of the payroll industry

CIPP’s Annual Excellence Awards short-listed for the Awards Awards WE ARE delighted to announce that our 2017 Annual Excellence Awards have been shortlisted in the Award Awards 2018 within the following categories: l Best Awards Event Alongside a Conference l Best Awards Event by an Association. The Awards Awards is produced by GCN Events which bring together professionals from the conference, venue and association sectors through events and training. The ceremony takes place on 27 April 2018 and we will notify members of our position at the event through News On Line . THE CIPP has updated our terms and conditions relating to membership and how we communicate with you and use your personal data. To view the terms and conditions, visit the About Us pages within cipp.org.uk . To change your contact details and/or preferences, login to My CIPP within cipp.org.uk . CIPP launches NMW and other worker entitlement training course THIS ESSENTIAL training course will enable delegates to identify recommendations for improvements, which could reduce the organisations risk of non-compliance and the financial and reputational costs. It will ensure that delegates return to their workplace with the confidence to audit current procedures and pay systems. The course covers: l Who is eligible to be paid the minimum wage, including the implications of recent worker status cases l What pay and hours to include and what to exclude l How to make the calculations l How the processes vary for different types of work l How to apply annual rate increases, including the implications of pay increases on pay structures l How deductions can affect the calculations l Interaction of the minimum wage with aspects of the Working Time Regulations l Compliant record-keeping l Penalties compliance and HMRC’s enforcement powers l Tips on avoiding the most common errors To book, visit cipptraining.org.uk or contact us on 0121 712 1000 to find out more. CIPP update to terms and conditions

THE CIPP has released a research report discussing the experience of gender pay gap reporting to date of employers, specifically from the perspective of the payroll professional who serves the reporting employer. The aim of our research was to uncover how the first reporting of gender pay gap

GENDER PAY GAP REPORTING The first year through the lens of the payroll industry

results has delivered and to look at the positives, the negatives and the lessons learned; which for some will provide for a smoother process in the second year.

Payroll professionals experience the demands of gender pay gap reporting from several different standpoints, namely but not exclusively: software development; in-house payroll professional; specialist payroll bureaux; accountants, bookkeepers; training and education; technical author. Our focus was to include employers that have a mandatory obligation to report but also to those employers that have reported their gender pay gaps on a voluntary basis or are considering doing so. In every area of payroll work there are consequences delivered in the form of one enforcement agency or another, so enforcement proposals from the Equality and Human Rights Commission in their consultation paper, together with the fears and concerns of professionals (real or imagined) of the consequences of getting it wrong, also feature in our research. Some of the findings from our research include: l many calls for a review of the elements of pay and reward that can be included within the average hourly rate l significant concerns raised by the potentially misleading results, caused due to the exclusion of the value of salary sacrifice amounts l regulations need to be finessed to match non-statutory guidance – where the average hourly rate will distort the results and the hourly rate is clearly known during the snapshot period l guidance would benefit from the inclusion of more examples. Many factors will need to change in order to achieve full transparency, diversity and inclusion, but what this research has shown us through survey results and in face to face interviews and discussions, is that all sectors within the payroll profession have – as they do with all other new mandatory requirements – engaged wholeheartedly to ensure the successful delivery of gender pay gap reporting. Our full report is available to read through https://bit.ly/2Ig4Sf3. For further details of and to book on any CIPP course visit cipp.org. uk/training or email info@cipp.org.uk .

| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 12

PAYR LL NATIONAL WEEK 2018 Keeping the UK paid

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PAYROLL INSIGHT

Caught by PSD2?

Alison Donnelly, director at fscom and lead for the Emerging Payment Association’s Project Regulator and Association of Professional Compliance Consultant’s PSD2 Working Group, provides information and advice

Y ou may not have noticed, but the second Payment Services Directive (PSD2) was implemented in the UK on 13 January this year. For those outside the payment services industry, the most notable change so far has been the end of credit card surcharges, which has either been a joy or nightmare depending on which side of a card transaction you sit. Otherwise, as an individual, unless you’ve had an unauthorised transaction on your current account you probably have had no call to consider that providing payment services is a regulated activity and has been since 2009. However, as payroll professionals, the payment services regime and the activities that are inside and outside the regulatory perimeter should be of interest, even if just to confirm when changes arise that your business model has not strayed over the boundary line. What is in scope? The European directive is implemented in the UK by the Payment Services Regulations 2017. It defines regulated payment services as any of eight activities listed in Schedule 1, when carried out as a regular occupation or business activity, as long as one of the fifteen exemptions, also listed in Schedule 1, does not apply. The in-scope activities involve the movement of funds – either because the provider has taken possession of the funds or because the provider has given an instruction for funds to be moved – and the aggregation of data from payment accounts. These latter two activities – payment initiation services and account information

services – are new, having been introduced by the second Payment Services Directive. Under the first payment services regime, unless a firm took possession of the funds they would not fall within scope. This meant that payroll processors that simply calculated the sums and set up the payments from their client’s account without handling the funds themselves were not impacted by the legislation. However, under the new regime, firms may be providing payment services even when they don’t touch the funds. ...under the new regime, firms may be providing payment services... Under the new legislation, a payment initiation service is defined as “an online service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider”. While consumers in the UK are relatively unfamiliar with payment initiation services, they are much more common elsewhere in the European Economic Area – they initiate 55% of payments made in The Netherlands. Their value comes from enabling merchants to accept credit transfers for payment for goods or services, because they can confirm payment was initiated and that funds are on their way, thereby providing a competitively priced alternative to payment by card. Below, I provide a payroll processor use case, which may be in scope.

Likewise, account information service providers do not touch the funds but pull account information from one or more payment accounts to present it to the payment service user. I don’t intend to give a use case for this activity here, but payroll providers should, of course, consider whether any of their activities fall within this definition. Where a provider holds funds on account, the Electronic Money Regulations 2011 may apply. Most people think of prepaid cards when they think of ‘e-money’ but the legislative definition allows for current account products, like the one into which your salary is paid, except that instead of the funds being held as a deposit, they are held as e-money. All that is necessary are that the funds represent a claim on the issuer, will be used for the purpose of making payment transactions and that they are accepted by someone other than the issuer. There are two exemptions listed in the Electronic Money Regulations 2011, both of which are included in the payment services exemptions. payment initiation and are working with CIPP to document the various business models to present to the FCA. Please get in touch with me, in confidence and without obligation, if your business model might be impacted. The information here is a general summary of advice – not a complete or definitive statement of the law. We would like to help payroll providers obtain fundamental clarification on

| Professional in Payroll, Pensions and Reward | May 2018 | Issue 40 14

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