Issue 80 May 2022 PROFESSI NAL in Payroll, Pensions & Reward Official publication of The Chartered Institute of Payroll Professionals
Attraction is just the start...
Spring statement summary Announcements which impact payroll teams, now and in the future
In pursuit of the perfect payroll professionals How can businesses ensure they entice the top payroll talent?
Pay transparency pilot
The new government initiative to help tackle pay inequality
CIPP UPDATE POLICY HUB PERSONAL DEVELOPMENT
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“No matter what kind of business you are in, having the right people determines success or failure” Jim Collins
Editor’s comment We’re currently experiencing what’s been labelled ‘The Great Resignation’ – a period where many employees are making the big decision to switch from one job to another. This can be difficult to manage within any
article on page 22 to hear from a panel of experts and discover perspectives from both a recruitment and a payroll angle, on pages 26 and 34, respectively. Wednesday 23 March 2022 was a big day for payroll surprises. The spring statement, delivered by Rishi Sunak, unveiled a range of measures which will impact the work of payroll teams both now, and in the future. Read our hot topic (page 46) and catch up on those all-important updates.
department, but particularly within the payroll department. Payroll professionals hold a unique set of skills and have very specialist knowledge, meaning that replacing a talented member of a payroll team is no mean feat. This issue of Professional focuses on attracting payroll professionals to roles and keeping them. A key factor in retention is ensuring high levels of engagement. Ensure you flick to the feature
Lora Murphy ACIPP (editor@cipp.org.uk) Editor
Attracting and retaining employees can be difficult, especially when there’s lots of competition in the marketplace, the employee doesn’t feel valued or they’re not the right fit for the organisation’s culture. Chair’s message
find it doesn’t suit them, or it isn’t what they thought it would be. Students complete university, and often decide they don’t want to start a role linked to their study or still aren’t sure which career they want to pursue. Whether an individual has chosen payroll or pensions as a career or moved from another field, it’s important they can see a route of study and progression. Succession planning creates a talent pipeline, preparing employees by providing them with the knowledge, skills, and abilities to progress. It reduces any potential disruption for an organisation during times of rapid change, increasing critical knowledge and ensuring business continuity and performance.
Recruiting the right employee is the first step, assessing the essential skills before those that are nice to have. Payroll and pension professionals can be difficult to find, so consider whether it’s possible to recruit an individual for their attitude and potential for development. This could be in the form of a trainee or apprentice, who’ll be eager to learn. As we never stop learning, individuals at all levels will be considering the potential for development and promotion when they’re applying for a position. An organisation’s culture can attract individuals, especially where it’s known within its industry or location as being an employer of choice. Many employees start their working life in one profession and
Liz Lay MSc FCIPPdip FHEA ACIPD (liz.lay@cipp.org.uk) Chair, CIPP
CEO’s message
The beginning of April saw hybrid working introduced to CIPP employees, which means office-based employees will now work from home two days a week and from the
my recent trips to London (where face-to-face meetings have resumed), life seems as busy as it was before the pandemic. We were able to host our trainers’ event in-person, which we normally hold annually. It was great to engage with our trainers who deliver training all over the country (and now also virtually), as we discussed several educational and practical topics relating to our training portfolio. A further reminder: we confirmed last month that we can celebrate our profession in-person for the Annual Conference and Excellence Awards at Celtic Manor Resort, Wales on 5 and 6 October 2022. You should have received your invite, and regular updates will be available within the Professional magazine. We look forward to seeing many of you there.
office for the remaining three. This mix of days will ensure face-to- face contact, interaction and in-person staff meetings but also allows employees to work flexibly, as they did during the pandemic when working from home. We’ve improved our technology options, so all employees have access to laptops, telephones and equipment as required. This will ensure members, students and all our customers continue to receive the same professional support and service regardless of where CIPP colleagues are based. It was ironic that as I was writing this piece (due to editorial deadlines), it was some two years ago that I discussed Covid-19 and the sudden change and impact it had on all of our work and personal lives. It’s been great to gradually restore some normality and on
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 80 | May 2022
in Payroll, Pensions & Reward PROFESSI NAL Contents May 2022
Also available online at cipp.org.uk
THIS ISSUE’S FEATURE TOPIC ATTRACTION IS JUST THE START…
Features
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Feature – attraction is just the start… By Jerome Smail 22
HMRC publications to help the busy payroll professional By the CIPP policy and research team
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Delivering education offerings fit for the modern and future payroll profession By Helen Higson
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12
Tax-free childcare proves more taxing than first thought By Justine Riccomini
The NAO investigation into off payroll working reforms By the National Audit Office team
Did you know…? Deadlines By the CIPP policy and research team
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18
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Employee well-being – what can employers do? What are the consequences? By Beverley Gibbs
The latest updates from the CIPP’s technical panel By Samantha Johnson
The many complexities of holiday pay By Maaz Naeem
| Professional in Payroll, Pensions and Reward | May 2022 | Issue 80 2
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Editor Lora Murphy 0121 712 1018 | lora.murphy@cipp.org.uk Advertising Daniel Cull 0121 712 1021 | advertising@cipp.org.uk Design James Bartlett and Nicole Davis design@cipp.org.uk Printing Warwick Printing Company Ltd
Recruiting payroll professionals in the current candidate-driven market By Gemma Creamer
Employment law: the latest updates By Nicola Mullineux
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Chief executive officer Ken Pullar FCIPP CIPP board of directors Louise Gray ChMCIPPdip
A new government initiative to improve pay transparency By Danny Done
Dealing with staff absences By Hannah Walters
Stuart Hall MCIPPdip Helen Higson ACIPP
Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA(Hons) FCIPP Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP Katie Sharpe MCIPPdip Cliff Vidgeon BA(Hons) CMA ACG ChFCIPP Clare Warrington MSc FCIPPdip AFHEA
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The pensions dashboard: a progress update By Henry Tapper
How to attract talented payroll professionals By Jeremy Montgomery
Useful contacts Education education@cipp.org.uk 0121 712 1023 Events events@cipp.org.uk 0121 712 1013 General enquiries enquiries@cipp.org.uk 0121 712 1000 Marketing and sales marketing@cipp.org.uk 0121 712 1033 Membership membership@cipp.org.uk 0121 712 1073 Training training@cipp.org.uk
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Putting some WRAW into payroll By Ursula Cameron
Hot topic – The shocks from the spring statement By Mathew Akrigg
Regulars
01 Editor’s comment, and
35 Payroll news
Chair’s and CEO’s message
Catch up on all the latest important payroll updates
04 CIPP update
37 Pensions
Events, news and developments
An update on the progress of the pensions dashboard
05 My CIPP On your behalf, Advisory, Spotlight on… 09 Personal development
0121 712 1013 cipp.org.uk @CIPP_UK
39 Industry news 41 Wordsearch
What do recent surveys and research show?
BePayroll, how to keep updated with changes and the current educational environment
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 2022. The Chartered Institute of Payroll Professionals, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 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 retrieval 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.
Relax with our monthly wordsearch and a drink
12 Compliance 22 Feature topic
From deadlines to employee well- being to holiday pay
46 Hot topic
What did Chancellor, Rishi Sunak, announce at the spring statement on 23 March?
Read all about the theme of this month’s issue
48 Payroll pets
26 Reward
We say hello to some of your animal friends
An exploration of how not just to attract, but also how to retain the best payroll staff
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| Professional in Payroll, Pensions and Reward |
Issue 80 | May 2022
CIPP update
Welcome to our new BA (Hons) in Business Management students 12 MAY 2022 sees our new BA (Hons) in Business Management students welcomed onto their programme of study at an induction day at the University of Lincoln. Enrolments are now open until 26 September 2022 for the Autumn 2022 intake. Visit http://ow.ly/Z5QU30sh2jL to find out more.
Market Insight Survey THANK YOU to everyone who took the time to complete our Market Insight Survey earlier this year. The results have been analysed, are being used in our 2022/23 planning and will feature within the July / August issue of Professional magazine. In the meantime, congratulations to the prize draw winner: ● Emma Shufflebotham MCIPPdip. Emma was randomly selected using an online number generator and is the recipient of a £100 Amazon voucher. Congratulations, Emma! Annual General Meeting 2022 THE CIPP’S Annual General Meeting (AGM) for 2022 took place on 30 March 2022. Thank you to all those who attended and / or voted. The AGM was opened and closed by CIPP chair, Liz Lay. Liz provided an overview of the year, detailing all the changes and successes the Institute has experienced over the past 12 months. The actions of the meeting included: ● approval of the AGM minutes from 31 March 2021 (passed) ● approval of the accounts for year ending 30 June 2021 (passed) ● approval of the reappointment of Haines Watts as auditors (passed) ● selection of two members to the CIPP board. The Institute is pleased to welcome to the CIPP board the following directors who were elected by vote: ● Stuart Hall MA PGMdip MCIPPdip (re-elected to the board) ● Justine Riccomini Sc FFTAAIPA Chartered MCIPD ChFCIPP (new board member).
RIP, Jo Ewington Jo Ewington | 28/10/1949 – 30/03/2022 “IT IS with a heavy heart we announce the passing of our dearest friend and loyal colleague, Jo Ewington.
Jo was a core part of the Portfolio Payroll family for over 33 years and devoted her heart to Portfolio and payroll recruitment. Spending most of her days either on the phone (she loved to talk!) or travelling up and down the country, Jo built real, honest relationships with every person she met. Her desire to know everything about payroll meant she was the ‘go-to’ consultant, who you could trust to find the best payroll professional. She dedicated her life to helping people with their payroll careers, working tirelessly to place thousands of payroll candidates in her time. Her love and passion for payroll meant that many candidates became loyal clients, and her commitment epitomises what Portfolio stands for. She was well-known and loved by so many at Portfolio, in the payroll sector, across hundreds of businesses and she’ll be greatly missed but will remain in our hearts. Her legacy in payroll will never be forgotten. We send our love and thoughts to her husband, Dave and son, Andrew during this difficult time.” Samantha Johnson, marketing manager at the Portfolio Group
What is the future of payroll? WE ARE delighted to confirm that the fourth Future of Payroll Survey is currently running online. The survey looks at emerging technologies and trends within the industry, which will impact the future skills, knowledge and operations within payroll departments. The results will be launched for discussion during National Payroll Week, which takes place 5-9 September 2022.
The award-winning BeKnowledgeable series continues
CIPP MEMBERS can attend the next BeKnowledgeable webinar, to cover the topic of payroll policy making on 19 May. Hosted by our policy team, this webinar is the perfect way to boost your skills, confidence and knowledge in this area. Book your place online at: http:// ow.ly/4tZR30sh2jn.
Chartered members THE CHARTERED Institute is pleased to announce the following individual has recently gained Chartered membership status: ● Jill Smith MCIPPdip , head of operations at the CIPP. Congratulations to you, Jill!
Congratulations to the newly accredited PAS organisations THE CIPP’s Payroll Assurance Scheme (PAS) is designed to test payroll processing and compliance, along with people skills and development opportunities. One of the most crucial elements is ensuring business continuity plans are in place and effective, should they be required. Congratulations to all organisations that have achieved this accreditation and been able to put those plans into action. Special congratulations to our recently accredited organisations: ● Dumfries and Galloway Council ● Hays Specialist Recruitment Ltd. Ken Pullar, CIPP chief executive officer, said: “Congratulations to those organisations that have attained PAS accreditation. They’ve clearly demonstrated their sound payroll processes, knowledge and skills. This is imperative in the payroll profession, as reacting quickly to ever- changing legislation and guidance is crucial.” The PAS is still operating, with assessments currently operating virtually. To find out how the PAS can benefit your organisation, email compliance@cipp.org.uk .
| Professional in Payroll, Pensions and Reward | 4 May 2022 | Issue 80
POLICY HUB
On your behalf
Policy team update
What interesting events, meetings and research have the CIPP's policy team been involved in?
BeKnowledgeable: payroll policy making Following the resounding success of the return of the BeKnowledgeable series in April 2022, editor, Lora Murphy will be hosting the next session, on 19 May 2022. This webinar centres on the topic of payroll policy making and introduces something a bit different to the series. Rather than focusing on the intricacies and nuances of an area of payroll processing, this session will explore how payroll policy is formed. The CIPP’s policy team sits on several forums, liaises regularly with government departments and responds to many consultations and calls for evidence to ensure it's representing the voice of the payroll profession. Hopefully you’ll leave this BeKnowledgeable event with additional knowledge on how you can get involved in the work the team carries out, and a further awareness of how the CIPP and its members have shaped some of the payroll policies you will be familiar with.
Customs (HMRC) published a consultation which explored options on how to raise standards in the tax advice market. The original suggestion was to make it mandatory for all tax advisers to have professional indemnity insurance (PII). There’s no standard definition of tax advice, and the consultation indicated that payroll professionals could have been considered as providing tax advice in their roles, so the outcome of this consultation was of the utmost importance to the CIPP and the wider profession. In its consultation response, HMRC confirmed there wouldn’t be a mandatory requirement for tax advisers to hold PII at this time, but also that it would explore options to improve the wider regulatory framework around standards in the tax advice market. It also committed to undertake a further consultation in this area. On 28 April 2022, policy lead, Samantha O’Sullivan travelled to HMRC’s Stratford office to participate in a face-to-face group workshop, held for key stakeholders. This was to help shape HMRC’s follow-up consultation. Look out for an update on this topic in an article in a future issue of Professional magazine. Policy survey updates The CIPP Payslip Statistics Survey went live in March 2022, and all answers have now been collected and included in a report on the topic. The report will present current payslip trends and allow you to compare
them to those implemented within your organisation. Keep your eye out for the report, which will be published shortly. And the research doesn’t stop there! At the time of writing, the Future of Payroll Survey had just been published, ready for people to respond to. Ensure you take the opportunity to share your views and have your voice heard. This crucial piece of research only comes around once every two years, but always provides relevant and insightful results.
Payroll pets We still want to see your payroll pets – those little faces that stare loyally at you as you put the world to rights or vent at them about your day! The first instalment of payroll pets is included in this very issue of the magazine, so be sure to check out a selection of furry and feathered friends, on page 48. To see your payroll pet in the pages of Professional , please send your snaps to editor@cipp.org.uk . We’re still waiting for that tax tarantula! n
Raising standards in the tax advice market In 2021, Her Majesty’s Revenue and
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| Professional in Payroll, Pensions and Reward |
Issue 80 | May 2022
MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Multiple PAYE schemes for a single business Q: A client has asked if it can operate more than one pay as you earn (PAYE) reference scheme for its only business? A: If an employer wishes to process several payrolls to pay separate groups of employees, a formal election must be made to Her Majesty’s Revenue and Customs (HMRC). The form, ‘Election for a separate PAYE scheme’ can currently only be printed and posted to HMRC and can be found here: https://bit.ly/3LHhqwK. Relocation allowances for multiple employees Q: A company employs a couple who are required to relocate to its new office in Scotland. As the employees will be incurring costs, the company wants to pay relocation allowances but is unsure how to treat the payment, as the employees will be living together. Will they be entitled to £8,000 as a couple, or to a relocation allowance of £8,000 each? A: Neither section 271 of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003 or the HMRC manual starting at Employment Income Manual (EIM) 03100 make specific reference to the £8,000 exemption for allowable relocation expenses being restricted to a household. There are, however, numerous references made to ‘the employee’ and HMRC has confirmed the intention of the legislation was always towards the individual. Therefore, there should be no reason why both employees can’t be entitled to the exemption, where their employer requires them both to relocate, and
confirms it will reimburse any of their allowable expenses. The employer must check there are no duplications of the reimbursement of expenses incurred because of the relocation. For reference, see: https://bit. ly/3J9Sa0b and https://bit.ly/3r0PewD.
submission (FPS) for each payment made to employees. The same would apply even if the employer had received an advanced payment from HMRC to cover the cost of statutory payments. If an employer is eligible to claim the employment allowance, an EPS would need to be submitted at least once each tax year. If a business is still registered as an employer, however, but currently has no employees, there’s still a requirement to notify HMRC that no payments are due. The employer should use an EPS instead of an FPS to inform HMRC there were no employees to pay in the tax month. The employer can also notify HMRC up to a year in advance that it won’t pay any employees. To do this, dates must be entered in the ‘period of inactivity’ fields in the EPS. Status determination statements Q: A client has informed us two contractors received payment in April and May 2021 but has since discovered that no employment status determinations were made on their contracts. As a substantial period has now elapsed, is there a requirement for them to conduct an assessment for IR35 regulations? A: Reforms to the off payroll working (IR35) legislation in the private sector apply to payments in respect of services provided from 6 April 2021. It would be necessary to determine the dates the services were provided, as this will identify whether the original or reformed legislation would apply. If services were provided after 6 April 2021, there will be no exemption to the rules, and so if the contractors are assessed as being ‘inside IR35’, then it’s advisable for the end-client to make a voluntary disclosure
Is the £8,000 relocation allowance allocated per individual or per property?
Real time information submissions where no payments are due to employees Q: A client has asked for clarification regarding the submission of an employer payment summary (EPS) to HMRC. If there are no figures to report on an EPS in a pay period, should a blank EPS be submitted to HMRC? A: Employers wishing to reclaim relevant statutory payments should send an EPS for each tax month as well as a full payment
| Professional in Payroll, Pensions and Reward | May 2022 | Issue 80 6
POLICY HUB
Gain a detailed overview of National Minimum Wage (NMW) and National Living Wage (NLW) including the current rates payable. Learn to identify who is eligible, the calculation steps needed, record-keeping and compliance activities required. National Minimum Wage and other worker entitlements
to HMRC and pay over the PAYE and class 1 National Insurance contributions (NICs) due immediately. For reference, see: https://bit. ly/3JbiY08. Travel costs for interviewees Q: Following a recruitment drive, a client has informed us that travel costs incurred by all candidates to attend interviews were paid for by the company. How should this be treated for the purposes of tax and NI? A: The interviewees will not be regarded as employees for tax purposes, so any payments they receive won’t be subject to tax and NICs, as directed under section 62 of ITEPA 2003. For reference, see: https://bit. ly/3j85GHh. Rules around salary sacrifice arrangements and bonuses Q: We process a weekly payroll for a client, which sometimes includes bonuses. Employees often ask if their salary sacrifice amounts can be increased when bonus payments are made. Is it acceptable to vary the salary sacrifice amount each time bonus payments are paid? A: A salary sacrifice is a contractual arrangement, in which an employee gives up the right to cash in exchange for a non-cash benefit. Where employees ask for an increase to the amount of cash to be sacrificed from a fixed salary, restrictions under HMRC’s approved lifestyle changes limit the amount of times such changes can be made. However, for variable pay, such as bonuses, providing salary sacrifice arrangements are actively in place prior to the time a bonus becomes due for payment, an employee can request that any future bonus payment is also sacrificed. This must be done under an amended contractual arrangement, under which the right to the bonus is given up in exchange for the non- cash benefit. For reference, see: https://bit. ly/3KqtMZF. Lumpsum payments under a company life assurance policy Q: An employee has recently passed away. Under the terms of the company life assurance policy, a lumpsum payment has been paid to the nominated beneficiary. Are there any requirements to notify HMRC of this payment please? A: Any payment made in respect of a
group life policy is regarded as an excluded benefit and will be payable free of tax. In such situations, payment is made directly to the beneficiary from the company, and not via payroll. For reference, see: https://bit. ly/3NRYywU.
Freeport sites and National Insurance (NI)
Q: Our payroll bureau has been asked to run a payroll for a freeport. We’re aware the NI rules will be slightly different, but we’re struggling to find a simple explanation as to how the NI thresholds will affect freeports. A: A freeport tax site is an area of land where businesses can claim certain tax reliefs. From 6 April 2022, a reduced rate of employer NICs will be available to businesses with premises in a designated freeport tax site. Tax sites are independent and separately authorised from freeport customs sites but can cover the same area of land. This will mean eligible employers can apply a zero-secondary rate of employer NICs for employees’ earnings above the secondary threshold, up to and including, a newly established freeport upper secondary threshold (FUST). Anything above this rate will be charged at the rate of 15.05% for 2022/23, and the FUST for that tax year will sit at £25,000. To be eligible, the employee must: ● ● be a new hire from 6 April 2022 ● ● not have worked for that employer (or a business connected to that employer) in the previous 24 months ● ● spend at least 60% of their working time within the freeport tax site. Not one, but four, new Freeport NIC category letters have been introduced: ● ● F – standard category letter ● ● I – married women and widows entitled to pay reduced NICs ● ● S – employees above state pension age ● ● L – employees who defer paying 12% NICs, only paying 2%, because they’re paying it in another job The new category letters reflect existing NIC category letters A, B, C and J. In the extremely rare circumstance that the employer has an employee for whom they would use a different NIC category letter (the example of mariners is provided), they would need to contact HMRC at the end of the tax year to establish a manual process for calculating and claiming the relief. For reference, see: http://ow.ly/Jrev30sh1r8. n
Visit cipp.org.uk/training to book your place
CPD 7 points
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| Professional in Payroll, Pensions and Reward |
Issue 80 | May 2022
MY CIPP
Spotlight on...
Marketing
Sarah Winnett ACIPP, marketing manager and Sam Parkes ACIPP , marketing executive
Can you describe the team – who are they, what do they do and what are their backgrounds? The marketing team consists of our marketing manager, Sarah Winnett, marketing executive, Sam Parkes and we’re currently recruiting for a marketing co-ordinator. Sarah leads on the brand, marketing strategy, budgets and planning, and works closely with partners to ensure we’re representing the industry. Sarah has recently joined the CIPP and, although new to the payroll sector, has more than 20 years of marketing experience, from both client and agency-side roles. Sam creates all the digital campaigns which includes email and social media campaigns. He then analyses and reports on this activity so we know what’s performing well, and what we can improve on going forward. Sam joined the marketing team in 2019 and is currently widening his range of skills by studying for his Digital Marketing Apprenticeship. What are the main priorities of the marketing department? The sector is extremely fast-paced and, as such, our marketing planning needs to reflect this. While we’re always planning ahead, we also need to ensure we’re reactive, and working collaboratively across the business,
to stay abreast of trends, legislation and news, to share with the payroll profession. Overall, it’s our job to ensure we implement and successfully deliver the marketing strategy, in line with our corporate strategy, to deliver growth and brand awareness sector- wide, to effectively represent the industry. What skills does a marketing team member need? As a marketing manager, Sarah has studied marketing as part of her business degree and gained her Level 6 Chartered Institute of Marketing Diploma, and Sam is also studying marketing principles, which are important when starting your marketing career. Although qualifications are a good, solid grounding, there are some other key skillsets we look for across the marketing team. We always want our communications to be as engaging as possible, to ensure our messages resonate with members across various channels. As such, creativity, copywriting and proofreading are all really important, as well as being able to work in an extremely fast-paced and busy environment. Teamwork is another key strength as we operate a ‘one team’ culture. We need to support each other given the pace of work, be reactive as things change and be able to work with both internal and external stakeholders effectively and efficiently.
We all have our own specialisms too – as a team, we want to be challenged and learn from one another, no matter what role we’re in. Finally, a passion for marketing and a willingness to learn can never be underestimated. What do you think you and your team can bring to the future strategy of the CIPP? We hope that, through our work, we continue to raise the profile of payroll in businesses across the UK and internationally, and support our members, by offering tangible membership benefits and industry- leading education products and services. What do your roles mean to you? Sarah: As the new marketing manager at the CIPP, I’ve brought many years of multi-sector marketing experience, but am new to the payroll sector. I can’t wait to learn and make a real difference to the CIPP, our members and, in turn, the industry. Sam: Having been in marketing at the CIPP since 2019, I have discovered a lot about what it means to be a marketeer and continue to learn more every day. As executive, I enjoy contributing to campaigns, measuring their effectiveness and advertising all the great things we offer to support payroll professionals. n
| Professional in Payroll, Pensions and Reward | May 2022 | Issue 80 8
PERSONAL DEVELOPMENT
# Be Payroll Jeremy Montgomery BA (Hons) FCIPP, bureau manager at MP Payroll Solutions, explains how being a CIPP member has enhanced his career
How has membership helped you in your career? Following a job change to Pricewaterhouse (PWC) back in 1989, the professional environment meant I was surrounded by accountants, auditors and tax professionals. Subsequently, being able to join a professional body for payroll was a must, and the CIPP was the one to join. Study was actively encouraged by PWC, and the CIPP provided the perfect courses for me – the Foundation Degree and then the BA Hons. Being able to study and get my degree put me in pole position for promotions and also helped me to become a CIPP tutor, which I went on to do for over 15 years. The tutor experience has been one of the most valuable and rewarding aspects of my career. I met and taught so many great people. Their professionalism and drive to improve themselves and further the payroll profession was incredible, and I learned so much from fellow tutors and my students. What membership benefits have you used or enjoyed the most, and can you provide some examples? The Advisory Service is worth its weight in gold. The team is extremely knowledgeable and either provide an answer or engage in discussion to reach a conclusion. I also enjoy the various forums, and don’t use these enough. They’re a great way of keeping in touch with fellow payroll professionals and learning about changes to legislation and practices. National Payroll Week and the Annual Conference are always the highlights of the year. Can you describe your payroll journey to us so far? I’ve been incredibly lucky in my career, which started in local government, with the London borough of Bexley. This provided such a solid foundation in payroll. Then, I worked with PWC, which gave me the opportunity to develop my career and work on international payroll. I travelled and met payroll professionals from all over Europe. In my 17 years here, my career really developed in the direction it did. International payroll will always be the area that provides the greatest challenges, but also the biggest rewards. Since PWC, I’ve had a few roles, not all great, but that’s part of the learning experience. I’m now enjoying the twilight years of my career with MP Payroll Solutions and I continue to learn every day. The bureau is going from strength to strength, we have gone through two payroll assessment scheme (PAS) assessments (an eye-opening, but very necessary step), a BACS audit and the minor blip called covid! The team has coped so well during the past few years with
everything that’s been thrown at them, and I firmly believe those who are working in the payroll industry are the consummate professionals. My years spent tutoring were very special. I met so many great people, learned so much and had the best time. Tutoring also gave me the confidence to provide training abroad, in both Southern Ireland and India. This confidence also enabled me to present at various events over the years. The ‘icing on the cake’ was being elected to the CIPP board, something I’m very proud of – thanks to everyone for making that happen. Being a board member has showed me what goes on in the background that enables the CIPP to provide the training courses and events we all need so much to develop. What are your hopes for your future career? I want to continue serving as a CIPP board member and would like to focus my efforts on getting more retired members to contribute their vast knowledge to the CIPP. This could be by: ● mentoring in some form ● assisting with CIPP webinars and training sessions ● providing insights into how they’ve tackled difficult issues.
Do you have any plans to study any CIPP qualifications or training courses?
I don’t intend to study further, but still attend forums and updates from the CIPP and Her Majesty’s Revenue and Customs. I encourage my team to study – two are taking the CIPP Foundation Degree and a third attends an international payroll course. What advice would you give to those new to the payroll profession, just starting out in their careers? Stick with it! Payroll is fast-paced and ever-changing, but the rewards are enormous. Ensure you study. The courses provided by the CIPP aid development and enhance your career, and employers take great comfort knowing someone is formally qualified. It shows the individual has taken ownership of their personal development. Get on LinkedIn, and develop your network. There are lots of fantastic groups – the CIPP, the Global Payroll Association and many, many more. Most of all, enjoy the ride. Get out and meet fellow professionals, learn from them and make use of their experiences. n
If you are interested in being featured in the BePayroll series, please email marketing@cipp.org.uk .
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| Professional in Payroll, Pensions and Reward |
Issue 80 | May 2022
PERSONAL DEVELOPMENT
HMRC publications to help the busy payroll professional
The CIPP’s policy and research team guides payroll professionals through the range of Her Majesty’s Revenue and Customs (HMRC) tools available to them, and how they can help with keeping up-to-date
A s payroll professionals, we will always have a close relationship with HMRC. HMRC provides comprehensive libraries of guidance, along with other resources to ensure you’re compliant when processing payrolls. It also offers some lesser-known resources that are beneficial to employers, tax agents and anyone who needs to keep abreast of the latest pay as you earn (PAYE), tax and legislative changes. The employer bulletin and the agent update HMRC provides two main publications – an employer bulletin and an agent update. Employer bulletins are released every other month, whereas the agent updates are released monthly. There’s often a substantial amount of overlap between the two, but the agent update provides much more tax- related information. The update and bulletin provide us with updates relating to legislation, guidance and HMRC plans. It’s great for keeping up-to-date with changes that might slip under the radar. With all the different coronavirus support schemes that were introduced, the update has been a fantastic resource over the past couple of years. With reminders of deadlines, and information regarding scheme changes and closures, it’s allowed businesses to forward plan and adapt. As an example, here are just a selection of items included in the February issue of the employer bulletin: ● PAYE – including changes to basic PAYE tools, the health and social care levy, P9 notifications, student loan thresholds and the new national minimum wage (NMW) rates ● UK transition – information on the trader support service ● coronavirus (Covid-19) updates and information – statutory sick pay rebate scheme information and an update on coronavirus job retention scheme claims
information about the single enforcement body, we’re pleased to see HMRC moving towards education to increase compliance. The government’s response to the consultation, Establishing a new single enforcement body for employment rights showed that employers would like to see more support on how to comply with the law. Unsurprisingly, workers’ rights groups advocated for stronger non-compliance sanctions, and, while this is important, we should still celebrate the fact that HMRC wishes to provide more comprehensive educational tools to help employers. Forums Other tools at our disposal are the customer and agent forums. The forums provide a place for employers and / or agents to stage discussions, and often include a representative or several representatives from HMRC. Agents must request access to the forum through their profile page, but all individuals can sign in and use the customer forum. You can visit the agent forum page here: http://ow.ly/Q8JJ30sf99N. This service works in much the same way as speaking to HMRC on the phone, however, for those who have difficulties using a phone, it can be a fantastic alternative. Responses are received in writing and may pinpoint the legislation relevant to your query. This can help in ensuring your processes are correct and compliant. n With the GOV.UK guidance and instruction pages being our usual port of call, it could be really easy to forget the other types of support that HMRC provides. Keeping up with all the changes can be a monumental task, but with these tools (and your ever-helpful Advisory Service and policy team), you can stay on top of the changes and ensure you keep your business compliant.
● tax updates and changes to guidance – includes construction industry scheme changes, making tax digital and the introduction of parental bereavement leave and pay in Northern Ireland ● general information and customer support – more information and feedback pathways, along with a reminder of the help to grow management course currently being offered by the government. Her Majesty’s Revenue and Customs provides two main publications – an employer bulletin and an agent update As you can see, the update covers a plethora of items and topics. Not all of it will be relevant to you, but there can be things worth investigating, which could make all the difference to you and your company. Another resource, often signposted in the bulletin, is the wide range of webinars offered by HMRC. Webinars Recently, HMRC has been working on expanding the range of webinars it offers to customers. The focus of these webinars is to increase compliance and to open dialogues between employers and HMRC. Recent topics include: ● expenses and benefits ● NMW rules ● uncertain tax treatment reporting. The CIPP has a news page, which includes a list of government webinars for you to keep up-to-date with. This can be accessed at the following link: http:// ow.ly/sNqv30sf97A. As we await more
| Professional in Payroll, Pensions and Reward | May 2022 | Issue 80 10
PERSONAL DEVELOPMENT
This course highlights employer’s challenges, responsibilities and obligations to all parties involved with pensions and auto enrolment, to enable compliance. Automatic enrolment and pensions for payroll
Delivering education offerings fit for the modern and future payroll profession
Professor Helen Higson OBE DL ACIPP, non-executive director at the CIPP , reviews the current vocational education environment and its implications for the Institute’s education offerings
T he CIPP provides a variety of participants and their managers indicate these offerings are high quality and bring much added value both to businesses and to the careers of payroll professionals. We’ve recently undertaken a review of our current education offerings, to ensure they’re appropriate for the future of the profession. In doing this, we explored the current vocational education environment, which we thought members would be interested in reading about. successful educational qualifications and training. Feedback from The government’s skills agenda The current skills agenda from the government has a list of drivers, which provide a useful lens for assessing the needs of payroll professionals and companies. In particular, the government is keen to: ● close the UK productivity gap ● increase the pace of company growth ● improve the performance of small and medium-sized enterprises ● pursue a ‘levelling up’ agenda ● widen social mobility and diversity ● develop more green jobs to assist the net zero agenda ● ensure a high-quality public service sector ● maximise the implications of artificial intelligence and the jobs of tomorrow ● facilitate post-pandemic recovery ● address how we deliver learning in the ‘new normal’. The government is keen to move towards financing further education (FE), rather than higher education (HE) provision. For many years, there was a growth policy for HE. This has now ended, with the number of places at university being capped, as the more cost-effective (to the government) local provision provided by FE colleges is being encouraged. Apprenticeships are
supported by all parties (government, employers and education providers), from levels 2 to 7 for all ages and levels of educational background. This is because it’s been proven that this kind of learning while you’re earning brings great value to employers. It also allows students to finish their qualifications debt-free and costs the government less. Additionally, the government is developing a higher technical levels (HTLs) quality kite mark for levels 4 and 5, delivered in both FE and HE. This quality kite mark clearly links to key national occupational standards (NOS). You may have recently seen discussion of T-levels in the press. These are level 3 qualifications, primarily for 11–18-year- olds, but the intention is to include adults later. These are considered by the government as the technical options to sit alongside A-levels (the more academic option). Eventually, they may replace the BTECs we all know and love, but BTECs have gained a bit of a reprieve. The future of learning This will leave learners with three routes: ● apprenticeships (learn while you earn) ● the academic route (A-levels to degree) ● and the technical route (T-levels, HTLs). Another important development is the government’s skills proposals in relation to funding. The suggestion is for the current student loan system to be changed, to allow learners to draw it down throughout their professional lives, as opposed to just at the beginning. All this is aimed to support the government’s levelling-up agenda. Watch this space to see the CIPP’s additional qualifications to address this vocational educational environment. If you’re a learner or an employer looking to upskill in the pensions or payroll arena, there will be something for you. n
Types of pension schemes Automatic enrolment
The automatic enrolment processes Contributing to the pension scheme The implications on tax Implications to payroll Automatic enrolment and TUPE Communicating pensions Auto enrolment compliance Penalties and reviews of compliance
Visit cipp.org.uk/training to book your place
CPD 7 points
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| Professional in Payroll, Pensions and Reward |
Issue 80 | May 2020
COMPLIANCE
The NAO investigation into off payroll working reforms
The National Audit Office (NAO) team provides an overview of its investigation, which examined lessons from the implementation of the 2017 reforms to tax rules for off payroll working in the public sector
T he National Audit Office (NAO) recently published its report on the implementation of reforms to IR35 off payroll working tax rules. IR35 was introduced in 2000 to limit the incentive for disguised employees (contractors who were employees in all but name) to contract their services through a personal service company, to reduce the taxes they had to pay. However, for many years, the rules proved largely ineffective – it was the worker’s responsibility to determine their own tax status, and in 2016, Her Majesty’s Revenue and Customs (HMRC) estimated only 10% were doing so correctly. To tackle widespread non-compliance, the government reformed how the rules were administered in 2017, starting with the public sector. The reforms required public bodies to take ownership of determining the status of off payroll workers. What caused the NAO to investigate the reforms? Our investigation into the reforms was prompted by large liabilities on the balance sheets of major government departments for failure to operate the rules. NAO colleagues auditing the 2020/21 financial statements of central government bodies discovered over £260 million in losses and provisions, suggesting something had gone wrong when these organisations grappled with the new requirements. This is a complex area of tax, which has a real impact on people’s lives, and is an area of law which is developing as cases go through the courts. The NAO doesn’t take a view on the merits of government’s policy objectives but reports on the efficiency and effectiveness with which those policies are implemented. Our investigation sought to bring clarity to a complex topic by setting out the facts on: ● why the 2017 reforms were introduced ● how they were implemented by HMRC and other public bodies ● what impact they’ve had
● some of the lessons HMRC has learned from the 2017 reforms ● any further challenges. What were the findings? We found that, although the reforms appear to have achieved their primary purpose of tackling non-compliance, public bodies had issues implementing them. Firstly, public bodies had little time to familiarise themselves with the guidance and tools before the reforms were rolled out. HMRC published guidance in February 2017 – just two months before the new rules came into effect. The check employment status for tax (CEST) online tool, intended to help make status determinations, only became widely available in March 2017. It was later subject to substantial changes to address the difficulties some public bodies had in using it. Gareth Davies, head of the NAO, said: “The 2017 reforms to IR35 tax rules have achieved their primary purpose of reducing non-compliance. However, HMRC did not give public bodies sufficient time to prepare for the roll-out, and it was highly likely that mistakes would be made”. This is a complex area of tax, which has a real impact on people’s lives, and is an area of law which is developing as cases go through the courts We also reported some potential unintended consequences of how the reforms were implemented. Hiring organisations now bear the full burden of taxes due to HMRC when they make careless mistakes – these aren’t offset against any taxes already paid by the worker,
which they become eligible to reclaim. Public bodies could therefore end up subsidising contractors’ taxes, as highlighted by Parliament’s Committee of Public Accounts in its recent evidence session with HMRC. This risk may also be having unintended impacts on hiring practices, with some contractors reporting difficulties being able to work flexibly, or at all, as clients are less willing to recruit off payroll workers. Substantial minorities of public bodies have also reported paying higher fees or facing difficulties filling vacancies. Finally, HMRC has adapted its approach since 2017, including when extending the reforms to the private sector in 2021. In doing so, it has considered several lessons from the 2017 reforms. However, key challenges and areas of uncertainty remain. HMRC will need to ensure compliance over larger and more complex supply chains, and it’s currently unclear how its compliance approach will work in practice beyond the public sector. Head of the NAO, Gareth Davies, commented: “While key lessons were applied during the wider roll-out in 2021, inherent differences in labour markets create new challenges that HMRC will need to manage for the reforms to be a success”.
Recommendations The recommendations in our report
reflected the challenges noted above and are aimed at helping government ensure the legislation operates as intended. Our recommendations focused on ensuring: ● hiring organisations have the appropriate tools and support to administer the rules correctly ● HMRC understands the challenges that hiring organisations, workers and other stakeholders face ● HMRC considers how the system as a whole needs to be administered to ensure it works well for all parties and the right tax is collected. n
The NAO report can be accessed here: http://ow.ly/IRmO30shB8p.
| Professional in Payroll, Pensions and Reward | May 2022 | Issue 80 12
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