Policy hub
that applies under special tax exemptions. This link – https://goo.gl/xrsR9L – is to HM Revenue & Customs’ 490 Employee travel – A tax and NICs guide for the employer on GOV.UK. Please refer to paragraph 7.10 which explains that if it is part of travel to or from the UK and meets the above conditions it is exempt. If the application is made from inside the UK it will be classed as a benefit that would need to be reported in a P11D return. This is because it would not be classed as part of the cost of travelling to the UK. Q: When assessing an employee on statutory maternity leave (SML) for automatic enrolment, should she be assessed on the statutory maternity pay (SMP) she currently receives each month or would it be the contractual pay she would normally receive? A: When checking whether an employee should be automatically enrolled or not the relevant earnings to be used in the assessment would be what is actually paid during the relevant pay reference period. In this case she would be assessed on the SMP she is receving. If the earnings reach or exceed the trigger point she would be automatically enrolled. Q: Can you explain what happens to pension contributions to an automatic enrolment pension scheme during SML? A: Where an employee is already in an automatic enrolment pension scheme and is taking SML, the contributions are based on the actual pay received (whether SMP or contractual maternity pay) in the pay reference period. However, an employee in this situation could choose to pay pension contributions at the pre-maternity leave level to receive any future pension benefits where the pension scheme is a final salary scheme.
Employer contributions would be based on earnings prior to maternity leave as if the employee was working and earning normally for ordinary SML (weeks 1–26) whether the employee receives pay or not. For the additional SML (weeks 27–39) employer contributions can cease when the paid leave ends. Q: Is SMP calculated on gross pay or NIC- able earnings; for example, gross earnings are £3,075.00 but NIC-able pay is £2,403? A: Please refer to the guidance on GOV.UK – https://goo.gl/4NXmqvn – which confirms that the average weekly earnings should be based on earnings which attract Class 1 NICs. The NIC-able pay in your question is the portion of pay that is above the primary threshold. However, all the pay in the period subject to NICs would be used to identify whether or not the employee has earned at or above the lower threshold (currently, £112.00 per week), because if her earnings were below this figure then she would not qualify for SMP. Q: An employee’s record was setup with the incorrect start date in error last month and this was reported in the full payment submission (FPS). How can this be rectified? A: The employer will need to amend the payroll and human resources record, but cannot amend the FPS because it may create a duplicate record in HMRC’s systems Guidance on how to amend errors that have occurred in a FPS can be referenced at https://goo.gl/Thw3qI. Q: Can you explain whether payments for renting accommodation are exempt under the relocation exemption and confirm where this guidance can be found? A: The exemption for relocation expenses must be related to the disposal or/and acquisition of a new home which can include travel and subsistence. It is also possible to reimburse rent for temporary accommodation, whilst searching for a new permanent residence as a qualifying relocation expense; however, if the employee rents a property instead of buying one, this would not be exempt. Guidance in regard to relocation qualifying cost can be found in appendix 7 of HMRC’s 480 Expenses and benefits – A tax guide , which can be accessed via this link: https:// goo.gl/wwbvSj. n
Are you new to payroll or use a payroll system and need to know how it works to answer employee questions? Then this is the course for you. The online delivery makes this certificate ideal for those requiring a certificate in payroll who do not have the time to attend face to face classes. It also provides direct entry into year two of the Foundation Degree in Payroll Management for those looking to develop their career at a later date. To enrol, or find out more, visit cipp.org.uk or email education@cipp.org.uk Advanced Payroll Technician Certificate Enrolments now open
cipp.org.uk
7
Issue 27 | February 2017
| Professional in Payroll, Pensions and Reward |
Made with FlippingBook - Online magazine maker