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...the levy depends on the type of maintained school ...
cost of the levy in their individual budgets, in the same way as other payroll costs e.g. National Insurance etc. DfE does not intend to allow the schools budget to be top-sliced by the council at the LA level for the levy; and the operational guidance for schools’ revenue funding in 2017–18 does not make any provision for dedicated school grant to be top-sliced in this way. As a result, all community/VC schools (and VA/foundation schools with payrolls over £3m) will need to ensure they have taken account of this additional cost when they set their budgets for 2017–18. Non-maintained schools Whilst an authority administering the payroll for a non-maintained school may actually pay over the levy to HMRC, as part of its payroll admin role, this would have to be funded by the school but the non-maintained school’s payroll would not count in the LA’s calculation of its own liability. Again, if the LA administers the payroll, the LA and the school will need to ensure that the school is set up as a separate employer in HMRC’s systems. for sharing information through the Local Authority CIPP specialist interest group. In response to queries received in recent weeks about the way in which the apprenticeship levy applies to maintained schools, the Local Government Association’s finance team prepared the following (edited) information (see box below), after discussions with the Department for Education (DfE) and HMRC. Please note this information is intended to help local authorities in planning for the levy and does not represent definitive guidance. Jackie asked if we could discuss this information with HMRC, specifically whether the requirement with regard to voluntary aided (VA) schools has been made clear in guidance to software developers and when more information is expected to be published by HMRC/DfE. Though more information is expected to be published by HMRC/DfE, no timescale for publication is yet available. The CIPP policy team continue to lobby HMRC for the provision of timely guidance, particularly to software developers who we rely upon so much in our line of work. n
Maintained schools Liability for the levy depends on the type of maintained school of which there are two categories: ● Community and voluntary controlled (VC) schools – In these schools the local authority (LA) is the employer and therefore all staff in community/VC schools are added on to the paybill of the council, with the levy equivalent to 0.5% of the overall paybill for the LA. All community/VC schools paybills will need to be included in the LA’s calculation, regardless of whether the school uses the council for payroll services. ● VA and foundation schools – In these schools (as in academies) the governing body is considered to be the employer, rather than the LA. Therefore, each VA/foundation school’s liability for the levy will be based on its own paybill. In practice the council is likely to administer the payroll for many VA/ foundation schools and the school may not have its own HMRC payroll reference number, separate from the LA. HMRC has stated that only VA/ foundation schools with a paybill of over £3 million need to be set up on a team have been talking to the Software Developer Support Team (SDST) which then approaches the software developer. Regardless as to the terminology used to describe these nudges from HMRC to the employer, be aware that April 2017 is likely to see a spike of GNS notifications generic notification service (GNS). The aim is to start student loan deductions, where no action seems to have been taken by the employer. The process will see two GNS prompts issued through the employers’ online communications tool; where neither results in action being taken, a follow up phone call will be made by HMRC. So far, reasons given for not making student loan deductions include: ● SL1 start notice not received ● forgot the log in and passwords so missed all coding notices etc ● no known reason. Where the software has been identified to be at fault HMRC’s student loan
new HMRC payroll reference number. Employers who need to set up a new reference number with HMRC will need to do so between 6 February and the end of February 2017. Those VA/foundation schools with paybills under £3 million, with the same payroll reference number as the LA, do not have to split out with a separate payroll reference number. However, local authorities, in reporting the amount of levy due, will need to find a way of excluding the pay of the small VA schools from the calculation of the authority’s liability for the levy. We understand software houses are working on a development to ensure those VA schools with paybills under the threshold that remain on the main council payroll reference number, will be excluded from the levy calculation. A community/VC school, where payroll is not provided by the LA, will need to liaise with its payroll provider and the LA on this to ensure the correct payment is made. For VA/foundation schools, the school will have to calculate its own liability and make arrangements. Community/VC schools will have to make provision for the relevant September 2017). If this is something you are considering then please contact the GEO by email at closingthegap@geo.gov. uk using the subject line ‘early adopter’. Apprenticeship levy and maintained schools Thank you to member Jackie Standring as it is the key month for student loan SL1 start notices to begin. Gender pay gap reporting In December 2016, the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 were published to bring into force the mandatory gender pay gap reporting requirements for private and voluntary sector employers with over 250 employees. The Government Equalities Office (GEO) is keen to identify and reward leading employers in key sectors that want to be early adopters (i.e. publishing in the first or second reporting quarter April–
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| Professional in Payroll, Pensions and Reward |
Issue 27 | February 2017
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