MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
T codes Q: An employee on the payroll has received the tax code 1115T. How does a T code impact tax calculations, and does it give the employee a personal allowance in the same way as an L code does? A: From a pay as you earn (PAYE) tax calculation perspective, T codes operate in the same way as L codes. The only practical difference between T and L codes from a payroll perspective is that T codes aren’t automatically adjusted at the beginning of a tax year where there’s an upcoming adjustment to the personal allowance. L codes, however, would see automatic adjustments in those scenarios.
being adhered to. Further information can be found here: https://ow.ly/ ZUhB50UhrkL. Parental leave taken in individual days Q: Can an employer agree to allow an employee to use unpaid parental leave for less than one contracted week? If so, how does this impact the annual four- week limit? A: Parental leave can be taken in individual days if the employer agrees or if the individual has a disabled child. It would be up to the employer to monitor and manage the number of days taken if leave is provided in this way to ensure the annual limit of four weeks per year isn’t exceeded. Further guidance is available here: https://ow.ly/Huho50UhsfH.
“(2) The requirements are all of the following: (a) the worker is a member of the employer’s family; (b) the worker resides in the family home of the employer; (c) the worker shares in the tasks and activities of the family.” If the above criteria are met under Regulations 57(2) then the work doesn’t apply for NMW purposes. Private medical insurance family cover and salary sacrifice Q: A client is offering private medical insurance (PMI) to all staff as a benefit in kind (BiK), with the option of adding their partner / children at a cost to the employee which will be taken from their pay. Can the repayment for family members be taken as a salary sacrifice deduction or will it need to be a net deduction? If this amount is taken from net pay, can this be considered as ‘making good’ and therefore deducted from the payrolled benefit? A: The repayment for family members could be taken via salary sacrifice, but this may not be very beneficial as the arrangement would constitute an optional remuneration arrangement (OpRA) scheme. This would mean the amount sacrificed (assuming it’s the same value as the family cover) would have to be added to the taxable benefit value. The only saving which could arise is the reduction of employee NICs payable on the amount that could otherwise be sacrificed. Please see the following link for further information around OpRA: https:// ow.ly/vg4550Uhupq. Where a net payment is taken from the employee for the cost of the additional premium to add family members, this would be considered ‘made good’ by the employee. Therefore, the benefit amount would be the full premium, minus the deductions made towards it. A description of making good can be found here: https:// ow.ly/pU8P50UK4o0.
“Where vans are used to drive directly from employee homes to jobs, do they need to be reported on P11Ds?”
“Do NMW rules apply if family members are working in the same household?”
Company vans and P11Ds Q: A client has numerous company vans, all of which are assigned to specific people, but used for business purposes only. Individuals using the vans drive directly from their homes to jobs they’re carrying out, and back again. Do we need to report these vehicles on P11Ds? A: If employees are using the vans for the following purposes only, there’s no benefit to report: l business journeys l commuting l occasional and incidental private use. It would be advisable to ensure employees have a clause in their contract or a written document which confirms the limitations to the use of their vans. There should also be an internal company procedure which checks these rules are
National minimum wage (NMW) and family members Q: Please could you provide some extra help in relation to the following HM Revenue and Customs (HMRC) guidance: https://ow.ly/cRTK50UhstU? This states that the exemption rule doesn’t cover limited companies; however, would this still be the case if the limited company’s director(s) are parents and live in the same house as the worker (their child) and there are no other directors of the company? A: According to Regulation 57(2) of the National Minimum Wage Regulations 2015 (https://ow.ly/fEU050UhsOl), ‘work’ doesn’t include work relating to family members in the same household, as per below:
| Professional in Payroll, Pensions and Reward | February 2025 | Issue 107 8
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