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10. Before a jobholder can choose to opt out of pension scheme membership, they must: l have become an active member of the pension scheme under the automatic enrolment or opt-in provisions and l have been given the enrolment information from their employer. 11. The latter is important to ensure the jobholder will have been provided with sufficient information about the effect of the enrolment, so they can make an informed choice about whether to opt out.”
the purposes of NMW, if they’re in respect of expenditure in relation to employment or where a deduction is taken by the employer for the employer’s own use. In this scenario, the deduction taken from the employee would be for the employer’s own use, and so would reduce pay for the purposes of NMW. Further guidance relating to this can be located in the following places: https:// ow.ly/hetf50TWa5P and https://ow.ly/ Tg1I50TWaah. Commission and holiday pay Q: Do we need to include commission figures in our holiday pay calculations for employees who receive those payments? A: Commission payments should be included in holiday pay calculations, as these payments are intrinsically linked to the performance of the role. They must be included in at least four weeks of the 5.6 weeks’ holiday pay entitlement an employee has. Some employers might choose to include these commission payments in the full 5.6 weeks’ paid holiday calculation, but they don’t have to. Please see the following links for further information: https://ow.ly/urVg50TWaHO and https://ow.ly/HSiY50TWaIu. Leasing vans Q: We currently operate a car lease scheme, but an employee has requested to lease a van instead of a car. Could you please advise how we treat the leasing of a van for tax purposes and whether it differs to how we treat cars? A: Vans must be treated differently. They’re charged at a flat rate, instead of using a percentage dictated by fuel type and CO2 output which is used for cars. The rate for vans currently sits at £3,960. If the van being used is a zero-emissions van, the benefit is currently tax exempt. The following guidance could be helpful in this scenario: https://ow.ly/mpJF50TWaUo. n
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Trivial benefits Q: Our organisation is currently
considering providing small gifts (roughly £10 in value, e.g., flowers or a pizza) as rewards to employees. We’re trying to ascertain if there are any potential tax or class 1A NI implications of this. Please could you provide some advice on this? A: As the gifts will be given as rewards for work or performance, they won’t meet the criteria to be classified as trivial benefits. The gifts would instead need to be reported on a P11D or the organisation could apply for a pay as you earn (PAYE) settlement agreement (PSA). Through a PSA, the employer covers the liabilities on behalf of the employees on minor, irregular or impracticable items. The following links may be of use in this instance: https://ow.ly/Vmet50TW9yA and https://ow.ly/rSSg50TW9Bk.
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Are there any tax or NI implications of providing gifts as rewards for work or performance?
Deductions from salary and NMW considerations Q: We’re looking into providing employees with reusable coffee cups so they can receive free hot drinks at our sites. If an employee requires a replacement cup, due to loss or damage, which we charge them for and deduct through their salary, are there any NMW implications? A: Most deductions employers take from an employee’s pay will reduce that pay for
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How are vans treated for the purposes of tax?
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Issue 106 | December 2024 - January 2025
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