Official publication of The Chartered Institute of Payroll Professionals
in Payroll, Pensions & Reward
Issue 49 April 2019
Payroll software implementation
Anti-money laundering Enables protection
Taking steps to drive digital Focuses on strategy
Flexible paydays Empowers payees
CIPP update | Policy hub | Career development
TRUST Frontier Software with your payroll
processing Accurate, secure and reliable
0845 370 3210 sales@frontiersoftware.com www.frontiersoftware.com
OFFICES IN AUSTRALIA, INDIA, MALAYSIA, NEW ZEALAND, PHILIPPINES, SINGAPORE AND UNITED KINGDOM
“Implementation is the sincerest form of flattery.” L Peter Deutsch (1946–)
Editor’s comment
Do you vividly recall your first time implementing a payroll system,
requirement from this month to report on payslips hours worked has meant new systems, software, policies and procedures being introduced? For some employers and, of course, payroll service/product suppliers this will have been – and perhaps continues to be – a significant concern and challenge. Quite what will be the outcome for employers of this new reporting requirement is uncertain. I am pleased that a new regular column on pensions, supplied by Aries Insight, starts this issue (page 31). The first topic is about the law on individuals who have gone missing.
and the accompanying excitement, uncertainties, and concerns? My first time occurred in the early 1970s when British Rail rolled out its national payroll
I hope you all enjoyed the winning the war for talent article in last month’s edition. This month’s feature is on systems rather than people. Many of you may be thinking about systems at this time of year. Is there need for a review of how inter-connected your systems are and whether the current system will be fit for future years considering the demands of the business plan? Key aspects of any system implementation being successful, just like most projects in life, are that planning and preparation make all the difference. Setting out early what your requirements are for going live with the new system, what tolerances you are prepared to accept and what you will not, are key to avoiding unnecessary conflict when the pressure builds for agreeing to move systems. If you routinely collect or verify data from employees to ensure what you hold is both relevant and necessary, that will also help ensure data exchanged between systems is accurate and up to date. An exciting opportunity when it comes to change is harnessing the benefits that the new system is expected to bring. Often this is compromised by stakeholders holding onto the past and not system across the southern region. An account of my first payroll software implementation project can be found in the online version. It would be good to receive a report of your first payroll software implementation project. Relevant articles about this issue’s feature topic of payroll software implementation can be found on pages 39–42. But payroll software implementation can occur on a much smaller scale, too. Surely, implementing the statutory Chair’s message
Mike Nicholas MCIPP AMBCS (editor@cipp.org.uk) Editor
embracing what change will bring. Remember the reasons for change may also bring change in approach and who does what in terms of the new processes. Making the new system reflect the old system is a failure of many projects where the change is attempted to not impact current approach. This should be challenged throughout to ensure the best process is achieved and where possible an agreed best practice standard is the one adopted. If you are undertaking a new payroll and pensions system implementation do let us know about its successes and importantly failures (if that is not confidential information). If we can collectively all learn from each other, then lessons shared become lessons learned. I do hope you enjoy this month’s issue and all the information shared.
Jason Davenport MCIPP MIoD (jason.davenport3@cipp.org.uk) Chair, CIPP
CEO’s message
Is your tax year end going well? Takes me back many moons (assuming I’d reconciled each month correctly) to find the final P35 failed our internal validation checks. Head scratching, analysis and investigation ensued to find out why. I don’t
The titles of new articles added since the last publication are highlighted in blue to ensure that they will be clearly visible in the index. The guide is produced on a tax year basis. By the end of each tax year it is closed off and restarted with any significant live news items being carried forward to the following year’s edition and then added to on a fortnightly basis from each edition of News Online . In addition, for earlier year queries all previous annual editions (2011–12 through to 2018–19) and the current latest edition are always available to view and download in the dedicated area of the CIPP website: cipp.org.uk/payrollguide. The policy unit of the CIPP produce this painstaking document for your benefit so please follow the link and avail yourself of it.
yearn after those days. Sometimes progress does benefit us. So, I hope there are no glitches or reconciliation issues for you, and that all goes smoothly. So, into the next financial year and changes to enact, as normal. It’s also an appropriate time to remind you of an invaluable key member benefit, namely our Payroll: need to know – your guide to UK payroll legislation and reporting for 2019–2020 . This resource, which was previously known as the Policy News Journal , contains all relevant UK payroll, pensions and general employment items, and is indexed and categorised for easy reference. Each category is in date order (the most recent entry being at the bottom) to ensure you know you have the latest updates on any given subject.
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
1
| Professional in Payroll, Pensions and Reward |
Issue 49 | April 2019
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at payrollpensionsandreward.org.uk
Contents
April 2019
41
Taking steps to drive digital
Glyn King explores the options
Features
16
20
18
The devolution revolution Justine Riccomini explains themain implications
NMW – avoiding the pitfalls Samantha Mann spotlights commonplace errors
Disguised remuneration Diana Bruce discloses urgent actions
23
26
30
Flexible paydays Julie Lock discusses employees’ financial wellbeing
Stretching a rubber band? Henry Tapper comments on recent developments
Anti-money laundering Richard Simms explores the legal requirements
| Professional in Payroll, Pensions and Reward | April 2019 | Issue 49 2
32
31
Chief executive officer Ken Pullar FCIPP CIPP board of directors Jason Davenport MCIPP MIoD Stuart Hall MCIPPdip Ros Hendren MSc, FCIPPdip, CMgr FCMIdip, FHEA Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip Karen Thomson MSc ChFCIPP, FHEA Cliff Vidgeon BA (Hons) CMA, ACIS, FCIPP Ian Whyteside MCIPP, FMAAT, ATT 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 Davis design@cipp.org.uk Printing Warwick Printing Company Ltd
Boosting LGPS pension pots Amanda Venables reveals how
Gone missing Dave King outlines legal procedures
36
34
Main terms, ill health pension, Army reservist Nicola Mullineux outlines decisions
Holiday pay calculations Danny Done answers part-time work question
38
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 info@cipp.org.uk 0121 712 1000
Payroll software implementation Jerome Smail reveals experts’ comments
Regulars
01 Editor’s comment, Chair’s andCEO’s messag e
29 Pensions insight 33 Industry news 34 Reward insight 38 Feature articles
The Pensions Regulator
Events, news and developments
04 Membership insight
Fiveminutes with, On your behalf, Advisory
10 Career development
cipp.org.uk @CIPP_UK
Diary of a student, Movers and shakers
Payroll software implementation 54 Confessions of a payroll manager
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 2019. 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.
13 CIPP update 14 Events horizon 15 Payroll news 16 Payroll insight
Additional online content 42 My first time – payroll software implementation 46 Design, development and implementation
3
| Professional in Payroll, Pensions and Reward |
Issue 49 | April 2019
MEMBERSHIP INSIGHT
5 minutes with… Benjamin Carter BA (Hons) FCIPPMCMI Trainer, CIPP
What does the role mean to you? It is enormously rewarding to give something back to the payroll industry and within this role I feel that I can make a difference to the careers of others. An example of this is when I am delivering the Payroll Technician Certificate, where I can see my delegates develop in a matter of days from novices to commanding the breadth of knowledge required to be a fully-fledged payroll administrator. I believe that this role also carries with it the responsibility of illustrating how payroll is an exciting and dynamic career move, so I take every effort to ensure my courses are engaging, energetic and interactive. What do you plan for 2019? Alongside continuing to strive to deliver the best performance in our training courses, payroll is a profession that is subject to more changes and updates than most so I’ll continue to further my own payroll knowledge and understanding wherever possible. Integral to this ambition is that I’m currently studying the MSc in Business and Reward Management (I don’t know when to stop). It is a very challenging course, but one that fascinatingly provides insight into how payroll can increasingly impact on an organisation’s strategic direction. I take great delight in incorporating elements of this into the training courses I deliver where appropriate to highlight the importance the profession carries in the wider working world. I may also apply for Chartered membership to further prove to myself that hard work brings great reward. As well as this, I have holidays planned in Cyprus, France and Germany so once again, I’ll be keeping myself busy. n
Overview of my career, work history and background I joined the CIPP about eighteen months ago and previously had a varied career in the payroll world. Most recently, I was a payroll consultant for a large payroll and human resources software developer. I thoroughly enjoyed it and particularly liked the travel element and working with payroll staff from a wide variety of industries – aspects which I’ve been fortunate enough to carry on to my current role. Previously, I worked in a payroll bureau managing a varied portfolio of payrolls. Whilst in this role, I completed the Foundation Degree in Payroll Management as I wanted to gain accreditation for the knowledge and skills I possessed as well as take the opportunity to learn as much more as I could. Wanting to know more, after graduation I moved straight onto completing the BA(Hons) in Applied Business and Management. Before falling into payroll some ten years ago, I worked for HM Revenue & Customs for five years in various roles; the highlight of which was in employer compliance. This experience formed the backbone of my payroll knowledge and enables me to provide a useful extra dimension when delivering courses such as P11D, expenses and benefits. Looking further afield, I served in the Army Reserves for thirteen years which
provided an enormous added breadth to my work and life experience, and I qualified as a trainer back in 2007, something I since applied in a wide variety of situations; from teaching soldiers of other nationalities how to land a helicopter whilst posted as a UN Peacekeeper in Cyprus, to delivering fitness training to regular army recruits. On top of this, I’ve also had a stint as a police officer and as a teenager worked in catering. So if anything, I’ve kept myself busy. Tell us about your role at the Chartered Institute As a full-time trainer, I deliver all of our professional training courses, and although I can often be found in our London office, I travel just about anywhere with this role – from Manchester to Montreal. I’m also frequently invited to speak at our payroll and reward seminars which I take delight in using as an opportunity to encourage our audiences to make the most of the opportunities the CIPP has to offer. When not at the front of a classroom, I keep myself busy with a variety of tasks which centre on ensuring our training products remain the best in the industry such as developing lesson plans, drafting recommendations on improvements to course syllabi and answering follow-on queries from courses.
| Professional in Payroll, Pensions and Reward | April 2019 | Issue 49 4
Policy hub
On your behalf
Policy team update
The CIPP policy teamprovide an update
A t the time of writing we don’t know whether the UK has left the EU with or without a deal or whether some other convoluted scenario has evolved; but what has and will continue to happen for the foreseeable future is a drain on governmental resource while attention is focused on the areas most needed for ‘all things Brexit’. On your behalf always contains updates from the CIPP’s policy team’s consultation work and while we have certainly seen a slow down at times for publications and meetings due to a shift in priorities for government departments, there is still plenty going on behind the scenes while we continue to work on your behalf. Payrolling survey Through February and March, we ran a survey together with HM Revenue & Customs (HMRC) to gather information to help inform HMRC of the biggest barriers that currently exist which prevent employers and their agents from electing to payroll their benefits in kind (BiKs). When we are out and about talking to members, we hear many positive comments about HMRC’s Payrolling of BiKs Service, but numbers registering for the Service remain low. We want to provide HMRC with an indication
of the areas that may require reform and look to also find out how to reduce the administrative burden on employers. At the time of writing our survey was still open but of the 45 responses received at the time, 45% were payrolling BiKs with some of the following reasons cited for doing so. No burden of P11Ds; saved costs by not using P11D provider; software doesn’t have the functionality to produce P11D returns; easier to payroll the benefits than P11D them; payroll cars as HMRC were supposed to make this compulsory; accurate tax calculations for employees (real time); to take control over changes to employees' taxable pay and offer the best service to them; believing payrolling will eventually be how benefits will need to be reported in the future so being proactive for clients. When asked what barriers were preventing the 55% of respondents from payrolling benefits, we provided some options: ● processes too complicated – 44% ● ● guidance not clear – 39% ● ● agents cannot register on behalf of clients – 5% ● ● registration more flexible, not just once a year – 7% ● ● other please detail below – 7%.
Additional reasons for not payrolling included: double taxation; no buy-in from the business; knowing that P11D return are still required for some other benefits: payrolling benefits would greatly increase end-of-tax-year admin; unsure if software is up to the job; processes too complicated; registration not flexible enough. We asked what, if anything, would encourage you to payroll BiKs and of the options we provided ‘easier processes’ came out on top (65%) with ‘the ability to payroll more benefits’ (30%) and to ‘allow agent registration’ (22%). Additional measures asked for included: basic training; being able to start payrolling any point in the year not just at the start; NICs on benefits that do not require a P11D(b) return; to be able to report the taxable benefit for new entrants receiving benefits such as medical insurance in the month of March in April’s payroll; simplification of the car benefit data requirements. When asked what improvements respondents would like to see to the payrolling service, there were numerous suggestions, including: better online options to view data on HMRC’s website; more simplified information to start with; no need to register – the full payment submission (FPS) could do this; ability to process everything that’s a benefit and removing the requirements for P11D return; being able to enrol part way through a year; capturing
...attention is focused on the areas most needed for ‘all things Brexit’
5
Issue 49 | April 2019
| Professional in Payroll, Pensions and Reward |
MEMBERSHIP INSIGHT
class 1A NICs at source and save P11D(b) process; a more straightforward application process; agent registration; class 1A reporting being done monthly via the FPS; mandatory requirement so if an employee leaves they will always have payrolled benefits not switching from P11D to payrolling. As the survey was still running at the time of writing we shall provide you with a further update in the next OYB. NMW: salariedworkers and salary sacrifice In December 2018, the government published a consultation concerning the national minimum wage (NMW) rules regarding salaried workers and the operation of salary sacrifice schemes. People who perform salaried hours work are paid an annual salary in equal weekly or monthly instalments, for an annual number of hours. Legislation provides a set of rules over how compliance with the NMW is calculated when regular salaries are paid. Certain conditions must be met in order for work to qualify as salaried hours work under NMW regulations. The consultation asked for views on how effective these rules are in preventing worker exploitation. The consultation also asked for views on proposed changes to regulations which relate specifically to salaried hours work, including regulations 21 and 24. In particular, welcoming views on whether, and if so how, government might amend the regulations to include additional payment cycles and fixing the definition of the calculation year for employers, without any detriment to workers. Salary sacrifice schemes are used in some workplaces whereby a worker agrees with an employer a lower rate of gross pay in exchange for goods or services (e.g. childcare vouchers, or bicycles). The NMW regulations include provisions designed to protect workers from unfair deductions from their wages. This consultation also asked for views on the practical operation of these provisions and their effect on workers on the minimum wage.
We reiterated in all our calls for your responses to our survey that this consultation provides you, payroll professionals, with a real opportunity to influence change. We asked – and you really listened – as we received 177 responses to help inform our response – thank you! Our survey had just closed at the time of writing, so a summary of ‘what you said’ will be included in the next OYB. Extending redundancy protection A consultation was published earlier this year which recommends that the current protection afforded under the Maternity and Paternity Leave etc Regulations 1999 (which apply to the period of maternity leave) be extended to cover the period of pregnancy and a period after, an extension of six months. This is a commitment that was made in the government’s response to the ‘Taylor Review’, and which had also previously been raised by the Women and Equalities Select Committee. At the time of writing we had just published a survey to gather your feedback and views on how best to achieve the proposed extension, asking questions such as: ● ● To what extent do you agree that protections against redundancy for a period following return to work should be aligned with those already in place during maternity leave? ● ● What costs do you believe the extension would bring for individuals and for businesses? ● ● What benefits do you believe the extension would bring for individuals and for pregnancy and a period after, an extension of six months ...to cover the period of
businesses? ● ● Do you agree that six months would be an adequate period of ‘return to work’ for redundancy protection purposes or do you think a different period would work better? ● ● Should pregnancy for redundancy protection purposes be defined as starting at the point a woman informs her employer that she is pregnant in writing or do you think an earlier reference point should be used? ● ● Are there other forms of leave which should be considered for additional redundancy protection on return to work? In the next issue of OYB we will provide you with a summary of the responses we received to our survey. GPG reporting We asked a question about gender pay gap (GPG) reporting in a quick poll on our website through the end of January and beginning of February, and we were interested to see what the breakdown looked like per sector. Specifically, we asked: “Has GPG reporting resulted in more openness in the subject of pay and reward in your organisation?” We received 193 responses in total, as follows: ● ● private sector – yes 9%, no 51%, improving 12% ● ● public sector – yes 4%, no 20%, improving 0% ● ● third sector – yes 1%, no 3%, improving 0%. As the results show, ‘no’ is in the majority; but we are only at the end of the second reporting year and it is encouraging to see that there are also some positive results in there too. (Please do bear in mind that our polls are just a snapshot in time; a one- question poll which does limit the responses and does not cater for follow up.) BEIS recommendations At the end of January 2018, the government response to GPG recommendations made by the Business, Energy and Industrial Strategy (BEIS) Committee was published. Some of the recommendations made were identified by CIPP members during consultation, particularly around the method of certain calculations. With regard to the openness and transparency element of GPG reporting, one of the recommendations made by the BEIS committee is that organisations should be required to provide some narrative reporting alongside their gender pay statistics and an action plan setting out how pay gaps are being and
| Professional in Payroll, Pensions and Reward | April 2019 | Issue 49 6
Policy hub
GEO guidance In February, the government Equalities office (GEO) published two new pieces of guidance to help employers. Eight ways to understand your gender pay gap asks companies to identify potential areas for improvement, such as: whether women tend to enter the company in lower paid positions than men, whether there is a difference in performance scores within the organisation depending in relation to gender, and whether individuals who are employed on a part-time basis are being supported to advance within the company. ...encourages businesses to give the action plan time to make an impact... Alongside this, the GEO also published a ‘four-step guide’ to help companies develop an effective GPG action plan. The guide encourages employers to analyse and understand why they have a gap, working with staff to find out what they
will be addressed, including objectives and targets. Subsequent reports should report progress against this action plan, including targets set. Government responded to this recommendation saying that it estimates that approximately 48% of employers have published action plans alongside their figures in the first year of reporting and will continue to encourage all organisations to do so in future years. Government said that it will continue to engage with employers and their membership bodies to provide best practice guidance on constructing an action plan. Publishing an action plan was intentionally not included as mandatory requirement under the reporting regulations and while the government urges all employers to produce an action plan alongside their figures, it is aware that including it as a mandatory requirement might result in a prescriptive format with limited value to employers and employees. Government also added that employers can view the diverse range of action plans produced by organisations in the first year of reporting on the government portal to assist with their own action plans in the second and subsequent years.
can be doing better and developing an action plan accordingly. It also encourages businesses to give the action plan time to make an impact, so it will be interesting to see the trends year on year as GPG reporting continues to the five-year review point in 2022. n Policy hub Have you visited our policy hub on the CIPP website? It is host to a variety of useful resources, and contains: ● all of our formal consultation responses ● webcasts on various topics ● Payroll: need to know – which contains all relevant payroll, pensions and reward News Online items and is indexed and categorised for easy reference. You will also find a variety of topical policy articles and also the relatively new Devolution: payroll legislation matrix to assist the payroll profession with the increasing complexity of devolved policies in the UK. The policy hub can be found ‘My CIPP’ on the CIPP website ( cipp.org.uk ).
P11D, expenses and benefits
One day
Designed to give delegates clarity and confidence about how to process the P11D, P11Db forms, PAYE Settlement Agreements (PSA) and net to gross calculations.
This course covers: ● Statutory requirements and implications ● Common errors when calculating company cars and fuel ● Childcare ● Beneficial loans ● Relocations ● Travel and subsistence expenses
● Vouchers / credit cards / tokens ● Gifts and awards ● Retirement benefits ● Salary sacrifice and tax / NICs changes from April 2017 ● Flexible benefits schemes ● Pay As You Earn (PAYE) settlement agreements ● Taxed award schemes ● Grossing up from net payment
● Other expenses ● Entertainment ● Telephones ● Subscriptions
● Key forms and dates ● Penalties and fines
Book online at cipp.org.uk or email info@cipp.org.uk for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
7
Issue 49 | April 2019
| Professional in Payroll, Pensions and Reward |
MEMBERSHIP INSIGHT
curtailed her SML at the end of October 2018. The following link explains about pay rises during SML and the relevant period: https://bit.ly/1fZJ02h. Q: We have a contractor, age 65, who works for us and falls within the ‘IR35’ rules. Are National Insurance contributions (NICS) due? A: If the contractor has reached state pension age (SPA) at the time of payment and you have also verified their date of birth, I can confirm that there will be no NICs due when doing this calculation for IR35. Please be mindful that there is a sliding scale for SPA for both men and women; information can be found here: https://bit.ly/2tKHuBz. Q: After a request from an employee who is disabled our company has provided her with an automatic car because of the disability. The list price of the automatic was more than a manual therefore giving a higher tax bill. The employee says that because she is disabled, we should use the list price of the manual car. Is this correct and do we have to amend the P11D return? A: There are special rules for employees who have a Blue Badge as a disabled individual. Firstly, equipment which is provided in the car for a disabled employee is disregarded when calculating the cash equivalent. Secondly, if the carbon dioxide (CO2) emissions are higher for the automatic car than the manual transmission car you use the manual car’s emission value. Further, where the list price for a manual car is less than the automatic car you use the manual car list price. Q: My company gives half their NICs savings arising under the salary sacrifice pension scheme arrangement back to the employees by paying the appropriate amount into their scheme funds. For example, an employee earns £8,333.33 per month and salary sacrifices 7%. How would you calculate the employer savings? A: I would calculate the employer NICs on the pre- and post-sacrifice salary. So, using your example, £8,333.33 is basic salary pre-sacrifice which is multiplied by 7%. This equates to £583.33 which is subtracted from £8,333.33 producing post-sacrifice salary of £7,750.00. Therefore, to calculate the employer’s NICs, deduct
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m. to 4.30p.m. on Fridays * . 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: An employee is asking for a loan from the employer to buy an annual season rail ticket and an annual parking pass for the railway station he will travel to and from. A: An employer can offer a loan up to £10,000 with nothing to report to HM Revenue & Customs (HMRC) which can generally be for anything they wish; for example, for an annual train or bus pass, or something completely non-work related. This could include a loan you provide in the normal course of a domestic or family relationship as an individual. So, if an employer provided a loan of, say, £11,960 then it would be reportable. You should always check what the combined outstanding value would be to the employee. If it is less than £10,000 throughout the whole tax year, there is nothing to report; otherwise there is a reportable beneficial loan. Q: I would like advice on salary sacrifice for buying annual leave and whether this is a taxable benefit in kind or would fall under optional remuneration arrangements (OpRA)? A: Employers can offer this kind of arrangement which HMRC has stated is perceived as helping employees maintain a good work/life balance. There is nothing to report regarding salary sacrifice or OpRA, as the purchasing of additional annual leave is classed as an intangible benefit in kind. Is there any taxable benefit in relation to this loan of £1,196? The following link gives further guidance: https://bit.ly/1FSIsee.
Q: I have a situation where an employee has been overpaid a bonus during her qualifying period for statutory maternity leave (SML). She is repaying this overpayment, but should we recalculate the month the overpayment was paid in order to correctly calculate her statutory maternity pay (SMP) payment or does her SMP have to be based on what was actually paid? A: HMRC guidance states that if incorrect earnings have been paid, which would produce a situation that worked to the disadvantage of either the employer or employee, and there is documentary evidence of an agreement between both parties as to the actual earnings that should have been paid, you should use the earnings agreed to calculate an employee’s average weekly earnings (AWE). Where there is no evidence of an agreement, you should calculate the AWE using the earnings that were actually paid. Please see https://bit.ly/2VesTto. Q: One of our employees has curtailed her SML at the end of October 2018 and returned to work. She opted for statutory shared parental leave (SShPL) which she began during January 2019 for three weeks. On 28 January 2019 she was awarded a pay rise back-dated to 1 January 2019. Would the Alabaster ruling apply to this scenario? A: I can confirm that the Alabaster ruling does not apply in this scenario as the pay rise did not fall anywhere during period from the employee’s relevant period for SMP to the end of her SML. The pay rise fell outside of the period because she
| Professional in Payroll, Pensions and Reward | April 2019 | Issue 49 8
Policy hub
ENROLMENTS NOWOPEN
Certificate inPensions Administration
Scottish earnings arrestment, as there appears to be conflicting guidance online. The Scottish Courts state that “the employer calculates the rates of all deductions using fixed tables as set down by regulations” which implies the latest tables. However, there is guidance that states “When new tables are issued, the employer is not under a legal obligation to apply the amended bands to existing orders unless he is requested to do so by way of the appropriate form. The employer may apply the amended bands if he chooses to.” Can you please confirm which guidance is correct? A: Having looked at the legislation, it would appear that the rate which was originally used when the arrestment was sent is the rate that you should use for the duration of the order. If you receive notification of the rate increasing (or decreasing), then it is at your discretion as to whether you apply the new rate or continue to use the rate that you currently do. Please see this link which supports this: https://bit.ly/2tChl7h. Q: How are average weekly earnings (AWE) to be calculated for an employee who wants to take surrogacy leave which I understand should be processed as adoption following HMRC guidelines? The surrogate lives in Canada. The father, who is genetically related to the child, will be requesting a parental order and will be the primary carer for the child. A: The employee is applying not for surrogacy leave but for either statutory adoption pay/leave (SAP/SAL) or statutory paternity pay/leave (SPP/SPL) under surrogacy. It is important to determine which of these the employee wants. To be entitled to SAP/SAL the employee must have, or be applying for, a parental order. If both parents have statutory entitlements, they would need to decide who is taking SAP/SAL and who is taking SPP/SPL; alternatively, they could choose to change this to SShPL and pay. Where the employee is taking SAL/SAP you would use the rules for SMP. Intending parents have a day-one right to SAP/SAL if they satisfy the qualifying conditions, which mirror SMP conditions. n
£702.00 (i.e. the NICs lower earnings level) from both figures so pre-sacrifice NICs would be £1,053.12 and post-sacrifice would be £972.62. I calculate the saving for the employer as £80.50; so half of that is £40.25. Q: How would you calculate student loan deductions where there is a student loan type 1 and post graduate loan (PGL)? A: This link to the Student Loan Company’s website – https://bit.ly/19gREvX – explains how an individual’s loan repayments are calculated where the employee has both type 1 and PGL. Using the example in the link when an employee earns £2,083.00 per month, to calculate manually the correct deductions you calculate the PGL first, followed by the type 1 loan. ● ● PGL – take the monthly threshold of £1,750.00, and deduct it from NICable pay which is £2,083.00, giving £333.00. Then you multiply that by 6%, producing £19.90 which is rounded down to £19.00. ● ● Type 1 loan – deduct £1,527.00 (the monthly threshold for a type 1 loan) from NICable pay of £2,083.00, giving £556.00 which is then multiplied by 9% producing £50.04 which is rounded down to £50.00. Q: Are micro employers, with ten or fewer employees, exempt from having to operate an attachment of earnings order? A: It doesn’t matter how many employees Q: When a person reaches SPA and their NICs category is changed to ‘C’, so they cease to make primary contributions, is it still appropriate to make student loan deductions through the payroll? A: Student loan repayments aren’t affected by how much (or if any) NICs are made. Though the figure to use for the student loan calculation is the same as the earnings used to calculate the NICs, the calculations are separate. You should continue to make student loan deductions and only stop making them if you receive a stop notice from HMRC. the employer has; an attachment of earnings order must be operated.
REV I SED CONTENT
Continuing legislative changes mean you need to be at the top of your game Avoid hefty fines by ensuring you remain compliant Gain professional recognition Learn in a supportive and interactive environment
Progress onto higher learning
For more information or to enrol: Visit: cippqualifications.org.uk Email education@cipp.org.uk
Call: 0121 712 1023 Live chat with us
Q: We have a query on which table to use for calculating a deduction under a
cipp.org.uk @CIPP_UK
9
| Professional in Payroll, Pensions and Reward |
Issue 49 | April 2019
*correct at time of publication
CAREER DEVELOPMENT INSIGHT
To appear on this page contact editor@cipp.org.uk
ZELLIS APPOINTSMARKO PERISIC
RUTHDOOLEY MCIPPDIP JOINS THE RNIB
MARKO HAS been appointed as chief products and technology officer for Zellis, (formerly NGA HR UK&I). He is tasked with evolving Zellis’ products and technology to enable its customers to deliver on the modern employee experience in the digital age, which will include advancements in data, AI and robotics to revolutionise the way businesses experience payroll and HR software. Marko worked as a general manager at Microsoft, where he developed a rich set of products for customers. He and his teams transformed on- premise, desktop-based applications into software as a service now serving a large global customer base and rapidly growing. Marko commented: “I am delighted to join Zellis as the next opportunity in my career. Zellis has an unmatched history and reach, with its huge customer base. This is simply the perfect foundation to have a complete and lasting impact on the sector. HR software has fallen behind other data-centric industries, but I know that we can make a transformational difference by providing the most advanced data centric products available.”
RUTH STARTED her role as payroll systems analyst at the Royal National Institute of Blind People in London in February. The RNIB is one of the UK’s largest sight loss charities and the largest community of blind and partially sighted people. As a part of the human resources (HR) department, Ruth will manage, develop and deliver within agreed strategy guidelines an effective integrated HR and payroll system solution, to support day to day operations and deliver appropriate management information to the organisation. Her aim is to support equally both the payroll team and the rest of the organisation’s requirements around their system needs to enable them to successfully carry out their duties.
DATAPLAN APPOINTS ELAINE GIBSON
STRUCTURAL CHANGES AT CIPP FOLLOWING THE departure of Elaine Gibson, Dr Sue Smith EdD MA Bed FHEA FCMI CMgr Assoc CIPD, takes up the role of education director at the CIPP from 1 April. Previously the associate director of professional education, Sue will be responsible for the CIPP’s qualification programme and strategy. Vickie Graham DipM ACIM takes on the new position of business development director which has become available as a result of moving the commercial elements of the CIPP’s product portfolio into the business development division. In addition to marketing, sales, the Payroll Assurance Scheme, consultancy and membership, Vickie now drives the strategy for training at the CIPP. Ken Pullar, CIPP CEO, commented: “I am delighted that we have been able to promote from within the business and congratulate Sue and Vickie on their new positions. They will have a challenging act to follow after Elaine’s departure, but I am sure Sue and Vickie will carry out their roles to the professional levels we all aspire to within the CIPP and I’m sure you will join me in congratulating them on their roles.”
ELAINE GIBSON MSc ChFCIPP FHEA MCMI, has been appointed to Dataplan’s board as director of people and quality with effect 1 April 2019. This appointment is the final one in a significant twelve months for Dataplan that has seen not only a management buyout but key strategic appointments including Paul Chappell as head of legislation and compliance and Alison Clynes as head of marketing and communications. Dataplan has grown from a small payroll firm attached to an accountancy practice to a national business with over 100 staff. Richard Rowell, Dataplan chief executive officer (CEO), said: “Bringing Elaine on to the team of directors here at Dataplan is a huge coup and ensures we continue to be at the forefront of developing existing and future team members, allowing Dataplan to continue to expand its position as a ‘go to’ provider in the world of payroll. “Elaine has such a huge and wide-ranging experience across commercial, educational and technical aspects of payroll and is simply the most qualified person in the industry to lead us in developing the best people to service our clients’ needs.” Leaving the CIPP after fifteen years in several roles, recently as education director, Elaine commented: “I’m looking forward to the new challenge that Dataplan brings. Their innovative and entrepreneurial approach to payroll provides some very exciting opportunities in a technology-driven and ever more legislatively complex world. “The real attraction though is their focus on people. Dataplan know that while technology is vital, people want to deal with friendly experts who know their subject inside out. Taking the lead and enhancing the existing workforce development strategy ensures Dataplan continues to develop the very best people across the business.” Ken Pullar FCIPP, CIPP CEO, commented: “We congratulate Elaine and wish her the best for her new role at Dataplan. The CIPP is in a stronger place through Elaine’s stewardship in her education director role over the last two years. Elaine will continue to be involved with the CIPP as a chartered member and tutor.”
| Professional in Payroll, Pensions and Reward |April 2019 | Issue 49 10
Career development insight
Diary of a student…
Nicola Stanton BA (Hons) FCIPP Payroll manager, Game Retail UK Ltd
assignments – but it is only for eighteen months. I kept to a strict deadline and celebrated each stage. After each module I had a month off before the next one started, which gave me time with my family. My grades gave me inspiration, knowing my hard work was paying off. With module one completed of your course, how do you think you did and was it what you expected? Module one was change management which I very much enjoyed. I use the models l’d learned every time there is a change with my job, which seems to be monthly. I applied the same formula and format I used in my Foundation Degree, which has served me well as my first mark was 83%, a first, providing me with confidence in my ability to complete my degree. How did you see the rest of the course working out and were you getting used to making it part of your routine? I had a great one-month break after my first assignment, but I was looking forward to my second assignment. I created a count-down calendar and after each section celebrated with a glass of bubbly. We usually went on holiday after each module was handed in – even a day trip to the beach – which I looked forward to more than handing in my assignment. Happy memories with hard work. I made a very good friend in Karen Beckett on the course – she was fantastic student help for me, and we supported each other a lot. My final grade was a 2:1, and I am the first in my immediate family to attain a degree. They are so proud of me. I will treasure my time studying interesting and reflective modules. I learned more about myself than payroll and management. n
Give us a brief background into your life I took up scuba diving fourteen years ago and love travelling the world to partake in my favourite activity. My best dive to date has also been the scariest – Crystal Bay, Bali; think of a strong current dragging you down to the depths but also seeing the largest boniest fish in the world – mula mula or giant sun fish. Can you give us an insight into your career and qualifications background? I joined a bank in 1988 processing administration in the back office which provided me with essential organisational skills. After having my two children I wanted a job that fitted around childcare and joined Surrey County Council. I hated the first week but eight years later I was promoted to senior payroll officer. My team leader provided inspiration for my management style; she was professional, easy going and knowledgeable – and laughed in the face of crisis with her great sense of humour. I jumped into the private sector in 2005 which gave me further insight into payroll and my aspirations. To further my career I had to gain a qualification and CIPP were my first choice as their Foundation Degree in Payroll Management was the benchmark in payroll qualifications. The course not only provided me with management skills but also the confidence to argue my case and to influence decisions that I would once back off from.
Which course did you study and why did you choose it? I studied the BA (Hons) Applied Business and Management, as I wanted to stand out from the crowd. Only a few people achieve this degree and I wanted to prove to myself I could achieve not only a Foundation Degree but also a BA in payroll. I was only one of fourteen who graduated that year with this qualification. So, after a break of three years, I started the BA which took a further eighteen months, four assignments and a dissertation. I knew this would be difficult but achievable alongside my full- time job with the help of my family and friends. After completion of my degree in 2016 I was successful in applying for my current post and firmly believe that my qualification and gained confidence landed me the role. How important is this degree in relation to your future career? I believe it is very important, as it has provided me with a skill set that I use currently and will do so in my future career. Project management, finance, leadership and change management help me daily in my job. Also, my dissertation subject was age diversity in the work force. It’s a fascinating subject, especially as in my previous role my work colleague was over the age of retirement and now in my new role I seem to be one of the oldest. How do you cope with work-life balance and study? I seemed to eat, sleep and dream my
11
Issue 49 | April 2019
| Professional in Payroll, Pensions and Reward |
INTELLIGENT PAYROLL, HR & TIME FOR THE BIGGEST ASSET IN BUSINESS. YOUR PEOPLE. IN A GIG ECONOMY WHO HAS THE POWER? Payroll that adapts to emerging trends will prepare your business for constant change.
Are you ready for the new world of work? Use our free benchmarking tool to compare your business and get your personalised report. Scan our code or visit areyouready.sdworx.co.uk
We are international Payroll, HR & Time experts with over 65,000 customers and 70 years experience. We provide future-focused businesses with intelligent, secure, in-the-cloud solutions and services, so your people have the tools and insight they need to succeed.
CIPP update
CIPP update
CIPP comes 52 in best 100 not-for-profit organisations FOR THE third time, the CIPP has been named in the Sunday Times Best 100 Not-for-Profit Organisations to work for (http://bit. ly/2SEhmSh). On 21 February 2019, the Chartered Institute had its position at number 52 confirmed at the award ceremony in London. The ceremony was attended by CIPP employees who had entered a prize draw to attend. This enabled employees with service ranging from two months to fifteen+ years to attend and enjoy the evening. The CIPP was represented at the event by: ● Ken Pullar FCIPP, chief executive officer (CEO) ● Jason Davenport MCIPP, chair ● Shirley Harris MSc FCIPP MAAT ACIPD, human resources and payroll manager ● Karen Boffey, executive personal assistant
● Vickie Graham DipM ACIM ACIPP, business development director ● Jason Clark CMGR MCMI, training and quality assurance manager
● Dawn Baxter ACIPP, business operations team leader ● Angela Adams MCIPPdip, policy and advisory officer ● Joanne Leather ACIPP, finance co-ordinator ● Ibukun Sobola, learning technologist
Ken Pullar, CIPP CEO, commented: “It is a prestigious honour to be part of the Sunday Times Top 100 Not-for-Profit Organisations to work for. Because the achievement is based completely on the motivation, passion and enthusiasm of the team, it is only appropriate that they are the ones who get to attend, which is why we offer a lottery type draw to establish who is lucky enough to attend.” In addition, the CIPP celebrated both its position in the list and the Best Companies Day on 1 March 2019 with a celebratory lunch for all employees, offering them the opportunity to finish work an hour earlier than their contracted finish time. During the day, which was designed to recognise the hard work and contribution of the CIPP team, we held a ‘how well do you know your colleagues?’ quiz, which featured facts about team members and we had to guess who was being described.
Payroll Assurance Scheme THE FOLLOWING
Croner Taxwise THE CHARTERED Institute is pleased to be working with Croner Taxwise, a top-rated provider of tax investigation insurance working with over 3,500 accountancy firms. Over recent years, the CIPP has noticed that the number of CIPP members working in accountancy firms has grown significantly. Perhaps this growth acknowledges a trend for businesses without inhouse expertise outsourcing their payroll services due to complexities of automatic enrolment, amongst other changes. We have started working with Croner Taxwise to increase our value-added benefits package to our members working within accountancy firms. Croner Taxwise are offering tax investigation insurance and their services extend beyond this to include tax (including valued added tax) advice, consultancy support, continuing professional development, seminars, a technical resource library and human resources support. To find out more, visit www.cipp.org.uk, My CIPP and Member Offers.
organisations have all recently successfully
achieved the prestigious Payroll Assurance Scheme accreditation:
● Duncan & Toplis Ltd ● East Midlands Shared Services ● FirstPort Ltd ● Homes England ● John Lewis Partnership ● Seetec Business Technology Centre Ltd. Ken Pullar, CIPP CEO, said: “We are thrilled these organisations have joined the ranks of organisations to achieve this respected accreditation. It is imperative that organisations comply with government legislation and the Payroll Assurance Scheme is designed to help companies do just that.” Visit payrollcompliance.org.uk or email info@cipp.org.uk to find out more about the Payroll Assurance Scheme.
13
| Professional in Payroll, Pensions and Reward |
Issue 49 | April 2019
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 58Made with FlippingBook - Online magazine maker