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lasting no more than two nights, or if the director only attends one meeting and the duration is no more than two weeks, then the payment would be exempt from NICs. Q: Please can you confirm that the £29.00 statutory guaranteed pay only relates to Northern Ireland, and that the rate for England, Scotland, and Wales remains at £28.00? A: A limit of £29.00 per day applies to the whole of the UK from 6 April 2019. These following links are to the legislation applicable to England, Scotland, Wales and Northern Ireland. ● ● http://bit.ly/2YZJvHi (The Employment Rights (Increase of Limits) Order 2019) ● ● http://bit.ly/2KiiScb (The Employment Rights (Increase of Limits) Order (Northern Ireland) 2019). Refer to the Schedule in each piece of legislation. Q: Can a couple choose to take statutory shared parental pay (SShPP) and statutory shared parental leave (SShPL) in a scenario where the woman would work two days a week and the man works three days a week? Also, for the first six weeks of pay (which is at the higher rate) can they elect this to be the man’s wages rather than the woman’s? A: Shared parental pay and leave are weekly rather than daily entitlements, and the parents can only take leave in blocks of weeks. They could both be on leave at the same time but couldn’t take it in the way that has been suggested in the question. The payment for SShPP is a set rate of the lesser of £148.68 or 90% of average weekly earnings. To receive SShPP the mother has to curtail SML and SMP; therefore, if she does this after two weeks of SML and SMP the further weeks would be at the applicable SShPP weekly rate only. Q: Would pay as you earn (PAYE) apply to drawdown pension payments? For example, a one-off payment (i.e. not all the pension pot withdrawn) has been taxed on a monthly frequency and not all the income tax personal allowance applied, resulting in the pensioner paying a large amount of income tax under PAYE. A: The PAYE regulations apply to pension
flexibility payments as they are classed as taxable income. There are three situations that could occur: ● ● the individual withdraws all the pension pot and is in receipt of state pension ● ● the individual withdraws all the pension pot and has other pension income or employment income ● ● the individual does not withdraw all the pension pot. If the individual thinks that too much tax has been taken in respect of the drawdown payment, s/he would need to contact HMRC at the end of the tax year. One way of accessing a tax refund is by using form P55 in cases where not all the pension pot has been withdrawn. Q: Our company are finalising our P11D returns for the tax year 2018–19 but there has been some confusion over those employees who earn less than £8,500 per annum for whom we need to report a benefit in kind. Is the employer exempt from paying class 1A NICs on these benefits? A: The £8,500 threshold for P9D returns was removed from April 2016, so this exemption no longer applies (except for ministers of religion). The result is that all employees provided with any benefit in kind that is not payrolled must have the benefit reported in a P11D return. So, irrespective of the level of the employee’s earnings, and regardless of whether a benefit in kind is payrolled or not, class 1A NICs are due. Q: An employee who turns 21 on 15 July will be paid earnings on 26 July. At what point does the class 1 NICs category change? A: The relevant trigger is the employee’s age on payday. In your example, the employee turns 21 before payday, so the NI category should be changed from H to A and class 1A NICs applied for both the employee and the employer. n
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| Professional in Payroll, Pensions and Reward |
Issue 52| July/August 2019
*correct at time of publication
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