PROFESSI NAL in Payroll, Pensions & Reward Issue 109 April 2025 Official publication of The Chartered Institute of Payroll Professionals
Welcome to the future
THE FUTURE IS HERE, NOW There are so many opportunities available to payroll now, we just have to embrace them
THE FUTURE OF ENFORCEMENT What is the Fair Work Agency and what will be its aims?
HOW YOU SHAPE THE FUTURE OF PAYROLL How industry feedback led to a government U-turn on proposed changes to payroll policy
CIPP UPDATE | POLICY HUB | PERSONAL DEVELOPMENT
cipp.org.uk
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“The future depends on what you do today” Mahatma Gandhi
Editor’s comment
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April. For payroll professionals, this month is synonymous with the start of the new tax year. Hopefully you’re feeling ready and prepared for tax year 2025/26, but if you need any guidance through this very busy time, remember our Advisory Service team is here to help! This issue’s theme, ‘ Welcome to the future ’ provides us with the perfect opportunity to explore how
technology trends will impact the payroll industry in the coming months and years. Our feature article on page 27 provides a platform for our panel of experts to express their views in this space and consider what might come next. And if you haven’t been paying attention to the rise of artificial intelligence (AI), then where exactly have you been?! Turn to pages 42 and 44 to understand the benefits of AI but also learn when you may be required to exercise caution. And our hot topic article this issue encourages you to take control of your beloved industry’s future, and to influence changes to payroll policies. Join CIPP’s Policy and Advisory Lead on page 56 to read about how industry feedback resulted in a U-turn from the government on a proposed new policy which would have had massive impacts on payroll professionals and employers more generally. Also, don’t forget to flick through our Software Directory 2025 , which is included as an insert in your issue this month. If you’re considering starting off on the process of selecting new payroll software, this is the ideal tool to assist you. Happy reading!
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Lora Murphy (editor@cipp.org.uk) Editor
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27 - Feature topic – Welcome to the future By Jerome Smail
42 - The future of payroll is here...embrace it By Sheryl Steele
44 - AI: The extra member of your payroll team By Paul Chamberlain
56 - You spoke, we listened, change happened By Samantha O’Sullivan
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
Chair’s message
Chief Executive officer Jason Davenport MCIPP MloD CIPP Board Of Directors Louise Gray ChMCIPPdip Stuart Hall MCIPPdip Dianne Hoodless MSc ChFCIPP FHEA Editor Lora Murphy editor@cipp.org.uk Advertising Daniel Cull 07795 652645 | advertising@cipp.org.uk Design James Bartlett and Nicole Davis design@cipp.org.uk Printing Redactive
Hello April, it’s great to have the lighter days and warmer weather back. Easter is fast approaching, and I hope the Easter bunny visits you all with lots of Easter gifts. It’s a busy time of year for payroll with year-end activities and
start of year changes, as well as factoring in the Easter bank holidays which fall right in the middle of April this year. These are the months in which we start to feel like we could do with an extra pair of hands. In this issue, we look at technology and how artificial intelligence (AI) and other new technologies could start to help us relieve the pressure of workloads and take away the time- consuming, mundane jobs. Could a bot help your team get on with the complex work, while it sorts all your data transfers? Or could it send out those reminder emails which normally take the team away from answering queries? Some people find AI scary. But we need to embrace the changing world. Remember when uploads and systems took over the data keying of absence and hours? That’s now a data input task which seems like a distant memory for many payroll departments. I hope you enjoy the articles in this issue and remember the CIPP is here to help, so please get in touch or reach out at any of our upcoming events.
Ana Laiu MSc FCIPPdip Brendan Mulkern FCIPP Lara Smart ChFCIPPdip
Brian Sparling ChFCIPPdip Michelle Sutton ChMCIPPdip Cliff Vidgeon BA (Hons) CMA ACG ChFCIPP Clare Warrington MSc FCIPPdip AFHEA
Clare Warrington MSc FCIPPdip AFHEA (clare.warrington@cipp.org.uk) Chair, CIPP
CEO’s message
Useful contacts
Consultancy consult@ippeducation.co.uk 0121 712 1044 IPP Education education@ippeducation.co.uk 0121 712 1023 Events events@cipp.org.uk 0121 712 1013 General enquiries enquiries@cipp.org.uk 0121 712 1000 Marketing marketing@cipp.org.uk 0121 712 1033 Membership membership@cipp.org.uk 0121 712 1073 IPPE Training training@ippeducation.co.uk 0121 712 1013 cipp.org.uk @CIPP_UK
Welcome to the start of the tax year… I hope all your system testing has gone well, and moving forward to the new tax year is all in hand. For many of you, influencing and ensuring budgets for the coming year, and the increased costs associated with the National Insurance changes will have been high on the agenda for informing businesses you either work in, or serve, as part of an outsourced arrangement.
Our lives now and in the future are being impacted by AI all around us in ways we never considered only a decade ago. Many organisations are now using ‘bots’ to help teams and customers. Indeed, an increasing number of us are using wearable technology on a day-to-day basis, not just to measure steps and monitor our health, but also to take voice commands and help us search for information, regardless of where we might be. This technology availability anytime, anywhere can be overwhelming, so I urge you to take time out when you can and be technology-free if only for a short time, to help reset your thinking. I know I can easily get into surfing apps, and before long have lost time, without anything either productive, or relaxing, having come from it. I’m a rather late convert to podcasts, but am really enjoying them now, discovering the world available to me via this option on my phone. Lots of super listening to be had there. I would love to hear from you about your favourite podcasts, or particular themes you find interesting. Happy new tax year.
Jason Davenport MCIPP MIoD (jason.davenport@cipp.org.uk) Chief Executive Officer, CIPP
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 2025. 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.
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 2
Contents APRIL 2025
Interested in writing for our magazine? Please support this magazine so that it can continue to be a part of your membership package. To get involved, contact Lora, at editor@cipp.org.uk.
Reading the magazine gives you one CPD point
REGULARS
FEATURES - WELCOME TO THE FUTURE
01 Editor’s comment 02 Chair and CEO messages 04 CIPP update News and developments 05 My CIPP
The Fair Work Agency: the future of enforcement By Jeni Morris
Are e-bikes the future? By Justine Riccomini
15
17
CIPP report flags issues in HMRC RTI data collection By Mathew Akrigg
Employment Tribunal ruling signals potential major change for holiday pay By Peter Davies
20
18
Event horizon, On your behalf, Spotlight on…, Advisory Q&As, Payroll news, Pensions health check: are you ensuring your pension schemes are administered correctly
The minimum wage in 2025 By Tony Gordon
Payroll Live South By Lora Murphy
24
22
14 Personal development BePayroll 15 Compliance Learn about the new compliance enforcement agency and read about a CIPP report which looks into issues with the real time information (RTI) system
online exclusive content
Change doesn’t have to be challenging By Wendy Muirhead
Why gratitude is crucial to your reward strategy By Robert Ordever
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30
27 Feature topic
Read all about the theme of the current issue – Welcome to the future – and discover what the payroll experts think about technological developments and artificial intelligence (AI)
Poor performance, post-surgery contact, protected disclosures By Dan Carder Reward and benefits as attraction and retention tools By Dianne Hoodless
Advertorial: The rise of the fractional CFO By Daniel Heathcote
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34
30 Reward
The future of pay equality and how technology can help By Danny Done Advertorial: AI in payroll By Gemma Creamer
38
36
Here, we cover why gratitude is essential to an effective rewards system and look at some of the latest employment law case updates
online exclusive content
online exclusive content
39 Technology
The evolution of payroll technology By John Dunham
Discover how payroll can embrace technology, now, and hear about some of the benefits and risks of AI in the payroll world
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41
online exclusive content
50 Pensions
Hear about potential paths to hassle- free pensions administration
Payroll under siege By Will Jackson
Advertorial: The economy is changing - payroll must keep up By Jon Roughley
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49
56 Hot topic
Read about the government U-turn on the collection of more granular data regarding hours worked through RTI
Hassle-free pensions administration By John Hale
50
58 Payroll pets
We say hello to some of your furry friends
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
CIPP UPDATE
update
Fellow members CONGRATULATIONS TO two CIPP staff members who have recently gained Fellow membership status: l Sam Jones FCIPPdip , Payroll Advisory Team Leader l Samantha O’Sullivan ChFCIPPdip (Chartered Fellow), Policy and Advisory Lead. Gaining this level of membership is a huge achievement, so congratulations to both! If you’d like to find out more, head over to our dedicated page: https:// ow.ly/NTPp50V9tlU. My Duvet Flip RELEASED DURING National Apprenticeship Week (NAW) 2025, Natasha Taylor ACIPP, Consultancy Relationship Lead at the CIPP and Bella Cox ACIPP, Payroll and Pensions Manager at Cox & Co Payroll Solutions Ltd, featured on the Youtube series, My Duvet Flip . Throughout their episode, they discussed the importance of NAW and how an apprenticeship can be the perfect career path for any individual. To view their episode, head over to the Duvet Flip channel here: https:// ow.ly/NozY50V9uwY. Annual General Meeting (AGM) PRIOR TO our face-to-face BeConnected in Birmingham, we hosted our 27th AGM, to elect two new board members, approve the accounts for the year and to re-appoint the auditors. Following a company update from Chair, Clare Warrington MSc FCIPPdip AFHEA, the new board members were revealed. We’re pleased to announce that Michelle Sutton ChMCIPPdip, FHEA and Stuart Hall MA PGMdip MCIPPdip were elected and have joined the Board of Directors from 1 April. Please note that Stuart was re-elected onto the board. Congratulations to both Michelle and Stuart.
Sam Jones FCIPPdip
Samantha O’Sullivan ChFCIPPdip
BeConnected events ON 26 AND 27 February 2025, we hosted two BeConnected events for members, one face-to-face in Birmingham, and another online. Each day was filled with great insights from our trusted Policy and Research Team, as they covered key updates in the industry to ensure our members’ knowledge stays up to date. We thank those who attended, and if you missed out, keep an eye on our events calendar for any future member-exclusive events.
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 4
ENROLMENT CLOSES 22 APRIL
CAN YOU AFFORD FINES OF £10,000* A DAY FOR NON-COMPLIANCE?
Event horizon
CERTIFICATE IN PENSIONS ADMINISTRATION The Certificate in Pensions Administration has been developed with pension practitioners to ensure that it meets the needs of the industry. It provides payroll and pension staff with relevant training so businesses can safeguard against the financial risk for non-compliance.
Your guide to upcoming events and training
Full details of all events can be found at cipp.org.uk/events or you can email events@cipp.org.uk for more information.
March saw the second of our Payroll Live events, but this time it was held in London, at the prestigious Leonardo Royal Hotel. Read all about this fantastic industry event on page 22 of this month’s issue.
Training courses Take a look at some of our upcoming training courses. Face-to-face courses are highlighted in orange. For a complete list of courses, dates and locations, visit http://ow.ly/iVfT50MU7yr.
COURSE
DATE
LOCATION
22 April
Online
Automatic enrolment and pensions for payroll
19 May
Online
28 April
London
Introduction to payroll
28 April
Online
14 May
Manchester
14 April
Online
P11D expenses and benefits
Awarded by
12 May
Online
29 April
Online
Delivered and assessed by IPP Education
Irish practical payroll
28 May
Online
09 April
Online
Statutory neonatal care leave and pay webinar
HOT TOPIC
23 April
Online
07 May
Online
10 April
Online
For more details, scan the QR code or visit ippe.org.uk/study
14 April
Birmingham
01 May
Online
Payroll update
12 May
London
21 May
Online
25 April
Online
Termination payments
29 May
Online
Scan to book
In addition to the upcoming courses above, IPPE offers a range of on- demand e-learning courses, including our brand new Payroll QuickLearn course library. Visit https://ow.ly/Woqx50VcAcL to find out more.
A subsidiary of the Chartered Institute of Payroll Professionals
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
POLICY HUB
On your behalf
Find out what the CIPP’s Policy and Research Team has been getting up to during March on behalf of you, our members, and the wider payroll profession. It's been a busy one! Policy team update
Happy new tax year!
payroll and ensure its critical importance is recognised. Complete the relevant surveys today, at: https://ow.ly/6gik50V8jtK. On 28 February 2025, the CIPP released a report on the “ Systemic issues in HMRC Real Time Information (RTI) data collection and customer experience when seeking resolution ”, following ongoing feedback from organisations and taxpayers about complex issues with the RTI system. The report can be accessed here: https://ow.ly/LQyK50V9fFK. Mathew has worked tirelessly to understand the variety of issues encountered with the RTI system and how we can work with both the profession and HM Revenue and Customs (HMRC) to achieve a mutually beneficial solution. Everyone here at the CIPP is incredibly proud of the time and dedication Mathew has given this project, in a bid to represent and support payroll professionals across the UK, while continuing to work as a critical friend of HMRC. Mathew also provides an article in this issue of Professional , on page 20.
Throughout March, Sam, Mathew and Sarah were kept very busy delivering legislative updates and sessions on the new statutory neonatal care leave and pay entitlements, both face-to-face and online. Forums The Policy Team is privileged to sit on several HMRC forums. Sam, Mathew and Sarah attended several forums between them in March, including: l Collection of Student Loans Consultation Group l Employment and Payroll Group l Employment Status and Intermediaries
Spring forecast The Office for Budget Responsibility has been tasked by the government with producing an economic and fiscal forecast, which will be published on 26 March 2025. The Chancellor of the Exchequer confirmed that the government remains committed to one major fiscal event a year. Therefore, we anticipate the Spring Forecast to be more of a look at the financial position of the country, rather than bringing the announcement of any policy or tax changes. Professional goes to print before the forecast takes place. The Policy Team will update you of any relevant updates via News Online . Mathew Akrigg The last month has been an exciting time for the Policy Team, and Mathew in particular. First, we announced a new suite of surveys being launched for 2025. The CIPP Payroll Insights Surveys : l CIPP Payroll Insights – In-house l CIPP Payroll Insights – Outsourced l CIPP Payroll Insights – Payroll Professional. They replace the previous flagship surveys, Payslip Statistics, Future of Payroll and Benchmarking . The new suite of surveys was created when Mathew chose to review the effectiveness of the Benchmarking Survey and the associated report, to identify how they could be improved. The aim was to strip the surveys down to the essentials of what the profession needs to know, making them quick and easy to complete for you. Your input is powerful, and your voice shapes the industry. So, by taking just a few minutes to complete the survey, you’re making a real difference for your profession, your peers and your future. Together, we can strengthen the role of
l Charter Stakeholder Group l Accessible Payroll Giving
l One-to-Many Compliance Advisory Board. The team sits on these forums to ensure our members’ feedback is provided at government level. We’ll always update you on our findings and information provided through these groups via Professional and News Online . If you have any issues you would like to raise at any of the professional forums we sit on, please reach out to the team by emailing us at policy@cipp.org.uk .
Events
Consultation and Call for Evidence (CfE) updates
Payroll Live south - London Samantha O’Sullivan, Policy and
Artificial intelligence (AI) in financial services The Treasury Committee has opened a CfE to seek views on how financial services can effectively use AI, while protecting customers against potential risks, especially vulnerable customers. The Policy Team ran a Think Tank for our full, fellow and Chartered members to obtain insight into your views. Your thoughts and views will be shared in our formal response. Thank you to all who attended the Think Tank and got involved. You can view the Policy Team’s formal
Advisory Lead, played a key role at this year’s Payroll Live in London, delivering the policy legislative update and chairing discussion panels. The first of the two Payroll Live events taking place this year was as much of a success as the first event of its kind last year, providing insightful sessions and enjoyable networking opportunities among the passionate payroll community. The second Payroll Live event will take place in Manchester on 9 July 2025. You can secure your place at the free event now, at https://ow.ly/1Jie50VeQqr.
responses to consultations and CfEs at: https://ow.ly/3Kav50QigsG. n
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 6
MY CIPP MY CIPP
Can you tell us about you, and your role in the Finance Team? I started my working life delivering newspapers and serving petrol at an attended service petrol station. I began a role in a bank after leaving school to gain some customer service experience, and at the age of 21, achieved my dream of becoming cabin crew. When the drunken passengers started to annoy me, I decided to move into an admin role and found my way into finance, where I’ve continued for about 20 years. When I joined the company in 2020 as the Finance Manager for CIPP and IPP Education Limited, I was on my own in the department. However, we've now grown to a team of three. The Credit Control and Finance Administrator processes the daily online receipts, chases all debt owed to CIPP and IPP Education Limited, posts all supplier invoices onto our accounting software and deals with administration, such as setting up new accounts and answering client and supplier queries. The Finance Executive allocates daily transactions for the company bank accounts, checks and approves tutor fees and expenses and runs lengthy month-end procedures in the accounting software. My role as Finance Manager is to support the team and ensure all transactions are posted accurately and in a timely manner. This enables me to produce high quality monthly management reports so we can monitor the performance of both entities. There are also lots of other daily activities, including setting up supplier payments, second approval of expenses and fee claims, dealing with requests from the Senior Leadership Team and other departments for management information, producing forecasts, assisting with budget setting – the list goes on! What are the team's priorities? Our focus each morning is to ensure any payments received either online or
challenges of your role, and how do you overcome them? Because time is of the essence when allocating receipts to membership, training and events invoices, one of the biggest challenges is often trying to quickly work out what a receipt is for. Some clients are helpful and include an invoice number or customer number on the bank payment, so we know which client it relates to. However, some receipts into the bank come with little information, and we need to put our Sherlock Holmes hats on to work out what the money's for. We once received a payment, and the reference was just ‘I’ – not much to go on! As a small team, overlapping deadlines can be a challenge, especially in short months or holiday times. But we adapt and work around them, and as Finance Manager, I’m happy to dig in and help with the day-to- day transactions or make a cuppa to boost morale. There are also evolving transactional needs, whether that’s with regards to the systems we use or the way we accept and process payments – there’s always something new to consider. What does your role mean to you? I’m passionate about providing an efficient and effective finance function, and I’m ever grateful for the fantastic team I work with, who have the same ethical approach. I enjoy understanding the finer details and complexities of running finances for two separate entities and their consolidation. Understanding that the CIPP provides membership and the payroll assurance scheme, and that IPP Education Limited supplies education and training in payroll helps me to ensure income and expenditure are costed correctly, and the monthly reports I produce are accurate. I’m proud that the detailed work I put into monthly reporting and annual budgeting can help to influence company strategy, and I enjoy the collaborative approach working closely with other departments brings. o
through the bank are processed quickly and accurately – a CIPP member can’t have access to membership benefits, such as the Advisory Service unless their membership is showing as paid on our customer relationship management system. Likewise, some IPP Education Ltd courses require payment before the start date. It’s therefore essential that all receipts are allocated quickly, so we know who can have access to membership benefits / courses / qualifications. Other priorities include accurate input of all transactions onto our accounting software to ensure monthly reports are a true reflection of the current position. Oh, and as Finance Manager, I’m also responsible for administering the monthly payroll, which is, of course, of utmost importance! How does the Finance Team collaborate with other departments in the company? The Finance Team always works closely with other departments, and it’s a two-way interaction. Membership could be checking with finance whether payments have been received; finance could ask the training or qualifications departments whether somebody attended a course; we may need further information about booking details, in which case, we could liaise with the Sales Team, or directly with the training, events or qualifications departments. There’s also daily coordination with the QESH, marketing and ICT departments to ensure goods or services have been received before we settle supplier bills. Collaborating with other teams is essential, especially to get to the bottom of queries. Supporting other departments by providing useful historical, current and future information is a fulfilling part of the job.
What are some of the biggest
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Correcting apprenticeship levy errors Q: A client has overclaimed the apprenticeship levy allowance for the last three tax years. To rectify this, do they just need to re-file the employer payment summary (EPS) in month 12 of each affected tax year and update the allowance amount? They claimed the full £15,000 but should have only claimed £3,000 as they’re a connected company. They’ve been advised to resubmit the EPS with the correct £3,000 allowance for each year, and to calculate the additional levy due to HM Revenue and Customs (HMRC). Is this correct? A: Yes. To correct the apprenticeship levy figure for previous years, you’d need to send an amended EPS with the correct year to date figures for those years. It would be best to make payment for the underpaid amount as soon as possible to HMRC. Further guidance on this topic can be located here: https://ow.ly/ nGWY50UYwfn.
Job titles and gender fluidity Q: Our human resources department has provided new starter details for an employee who doesn’t identify with traditional gender titles, such as Mr, Mrs, Miss or Ms, but with ‘Mx’. Will real time information (RTI) accept ‘Mx’? A: There’s no validation on the title field on the full payment submission (FPS). As a result, you can report any combination in this field. Further information can be found in the RTI Data Items Guide (see item 5A): https://ow.ly/MAOi50UYwna.
any day in the ‘qualifying week’. The ‘qualifying week’ is the 15th week before the baby is due. This is different if you adopt.” Relief at source (RAS) pension and national minimum wage (NMW) Q: We run a RAS pension scheme, so we take pension contributions as a net pay deduction. Does this impact NMW? A: Running a RAS pension scheme where you take employees’ pension contributions from their net pay will have no impact on NMW. However, there are different considerations when it comes to a salary sacrifice pension scheme, as a salary sacrifice pension arrangement must not reduce an employee’s cash earnings below the NMW rates. Director National Insurance contributions (NICs) Q: An employee has become a director part-way through the tax year (21/12/2024). We’re aware that directors have their NICs calculated on an annual basis, but wanted to know if we can change the NICs calculation method mid-tax year for the affected individual? A: A person who’s a director at the beginning of the tax year has an annual earnings period for that tax year, even when they cease to be a director prior to the tax year end. However, when a director is first
What are the eligibility criteria for statutory paternity leave?
Paternity leave eligibility Q : Is statutory paternity leave a day one right for all employees? A: There’s guidance available regarding statutory paternity leave online, as follows (taken from https://ow.ly/YmjK50UYwrx): “Paternity Leave You must: l be an employee l give the correct notice l have been continuously employed by your employer for at least 26 weeks up to
How do you correct an error regarding the apprenticeship levy for previous tax years?
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 8
POLICY HUB
Statutory neonatal care leave Q: Will statutory neonatal care leave be a day one right for all employees, when it’s introduced for babies born on or after 6 April 2025 and the eligibility criteria are met? A: The right to neonatal care leave is a day one right, which requires no set length of service and mirrors the right to take statutory maternity leave. With statutory neonatal care pay, however, the employee must have 26 continuous weeks of service ending with the relevant week and earnings of at least £125 (the lower earnings limit for tax year 2025/26) per week. This mirrors the entitlement to statutory maternity pay. Late notification of benefits to be payrolled Q: We weren’t informed of a benefit which was supposed to be payrolled in a previous year, so it was missed and wasn’t processed through payroll. Someone received a medical benefit in an earlier tax year, but this wasn’t reported to payroll until the following tax year (in May).
A: When the company has benefits to payroll, but the final FPS has been sent for that year, HMRC states that a business can carry this forward to the first wage payment in the next tax year. In this case, the payroll team wasn’t notified until May, so this would be the first pay date possible within the next year. However, the Class 1A NICs relating to this must be paid by 19 July and cannot be carried forward. Please see the following link for more information around situations impacting payrolled benefits: https://ow.ly/ ipXp50V89Kl. n
appointed part-way through the tax year, a pro-rata annual earnings calculation must be used for the remainder of the tax year. The number of weeks in the pro-rata earnings period are the: l tax week of the appointment l remaining tax weeks in the tax year. Therefore, in your specific example, the director was appointed on 21/12/2024, which falls into tax week 38, so there’s 15 weeks in the pro-rata period of the calculation. The following CA44 guidance link includes the tables you can use to help with the calculations (scroll to page 31): https://ow.ly/PRkU50UYFio.
What happens when the payroll team is notified of a benefit which should have been payrolled in an earlier year?
How do you calculate NICs for directors appointed mid-tax year?
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
MY CIPP
PAYROLL news
Changes to statutory sick pay (SSP) announced THE GOVERNMENT previously consulted on some proposed changes to SSP as part of its ‘Plan to Make Work Pay’ . We’ve now had a consultation response, which can be read here: https://ow.ly/ uKg850VcBnm. The main changes announced were that:
l the waiting days will be removed, so that SSP will be available from day one of sickness absence l there’ll no longer be the need to earn at the lower earnings limit (LEL) or above to qualify for SSP. The recent consultation queried what percentage of earnings should be paid to those earning below the LEL, as opposed to the flat rate of SSP. It’s been confirmed this will be set at 80%, and the government states this, “strikes the right balance between providing financial security to employees who need it, whilst limiting additional costs to businesses.” Concerns were voiced that some lower earners could see their SSP rate reduce under the new rules, and the government addressed this by saying: “The government notes concerns as to a small number of employees who earn just above the Lower Earnings Limit and may receive less SSP than they would under the current system. However, by abolishing the Waiting Period any potential loss is offset for most short-term absences.” At the time of writing, we don’t have much further detail around the changes, but watch this space as we will, of course, keep you updated as soon as we hear more. Company size threshold uplift: April 2025 THE DEPARTMENT for Business and Trade (DBT) has announced that the company size thresholds are to be uplifted by 50% from April 2025, with the exception of the number of employees test. The new thresholds will be as follows:
Micro
Small
Medium
Large
Annual turnover
1m
15m
54m
Over 54m
Balance sheet total
500k
7.5m
27m
Over 27m
Average no. of employees
10
50
250
Over 250
Of note for payroll professionals is how this will affect small companies impacted by the threshold changes in relation to off-payroll working compliance. Explanatory notes confirm: “Size classification under the Companies Act 2006 also impacts the application of the off-payroll working tax rules, under Part 2 of the Income Tax (Earnings and Pensions) Act 20036, commonly referred to as IR35. These rules ensure that workers pay broadly the same taxes as direct employees, regardless of the structure they work through. The size of the business engaged with the worker determines which party is responsible for ensuring compliance with the rules. If the business is small, the worker’s intermediary is responsible for determining whether the rules apply. Otherwise, the business must operate the rules.” This will apply to companies based on the last full tax year’s data, so companies may wish to assess if they’re still the ones responsible for applying the off-payroll working rules. Please see the following links for further information:
l https://ow.ly/kjWB50VcC7j l https://ow.ly/sn1e50VcC8b l https://ow.ly/7Ull50VcC93.
Diary dates
Last day of tax month 1
5 May 6 May
First day of tax month 2
Last day for submitting a real time information employer payment summary to apply to tax month 12 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method
19 April (This is a weekend date)
Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method
22 April
Last day of tax month 2 First day of tax month 3
5 June
6 June
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 10
MY CIPP
Pensions health check: are you ensuring your pension schemes are administered correctly?
Natasha Taylor ACIPP, CIPP Consultancy and Partnership Lead, explains what the IPPE pensions health check is and how it could help your business E nsuring pension compliance isn’t just a regulatory necessity; it’s a fundamental part of responsible compliance with auto-enrolment legislation, it’s crucial for businesses to ensure their
ensuring pension processes meet legal requirements.
pension schemes are administered correctly. At IPPE, we offer a pensions health check, a comprehensive review designed to assess and improve pension compliance and efficiency. This service is similar in approach to the PAYE health check, which helps organisations identify risks and rectify payroll issues before they become costly problems. The pensions health check is an independent audit service which examines an organisation’s pension processes, policies and compliance with UK pensions legislation. This service is valuable for businesses of all sizes, as pension management is subject to stringent regulatory requirements enforced by The Pensions Regulator. Our expert consultants review an organisation’s pension arrangements to ensure contributions are being correctly calculated, deducted and submitted on time. The service helps businesses identify potential errors, inefficiencies or areas of non-compliance which could lead to financial penalties or reputational damage.
Process improvement Identify inefficiencies and errors which could be costing the business time and money. Risk reduction Avoid common pitfalls in pensions administration which may lead to employee disputes or regulatory scrutiny. Enhanced employee confidence Ensure employees have confidence in their pension scheme, leading to improved engagement and retention. The IPPE’s pensions health check is a proactive service which helps businesses maintain compliance and efficiency in their pension administration. With the ever-changing pensions landscape, having a structured and professional review can prevent costly mistakes and ensure peace of mind. Employers who want to stay ahead of pension regulations and optimise their payroll processes should consider engaging with IPPE for this essential service. Ultimately, the organisations that embrace a forward-thinking approach to pensions won’t only meet regulatory requirements but will also foster a financially secure workforce, positioning themselves as leaders in employee wellbeing and corporate responsibility. n
business leadership. As organisations strive to attract and retain top talent, offering a well managed pension scheme can be a significant differentiator. In an era where employees are more conscious about their financial futures, employers must go beyond basic compliance and foster a culture of financial wellbeing. The pensions landscape is continuously evolving, with regulatory changes, technological advancements and shifting workforce demographics shaping the way pensions are managed. As automation and analytics driven by artificial intelligence become more integrated into payroll and pension systems, businesses can enhance accuracy and efficiency while also reducing administrative overhead. Employers must stay ahead by adopting digital-first approaches, ensuring their pension schemes are not only compliant but also optimised for future developments. Partnering with organisations like IPPE provides businesses with the expertise and insights needed to navigate these changes effectively. So, what is the pensions health check? Managing workplace pensions is a complex and ever-evolving responsibility for employers. With the increasing scrutiny from regulators and the need for
Benefits of the pensions health check
Organisations that undergo a pensions health check can expect multiple benefits:
Compliance assurance Minimise the risk of penalties by
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
Watch the video from 2024!
CIPP’s Annual Conference and Exhibition
1-2 October 2025 | Celtic Manor Resort, Wales
Our Annual Conference and Exhibition is the largest independent payroll conference in the UK, and brings together payroll professionals, thought leaders and solution providers from across the UK. Whether you’re a seasoned payroll expert or just starting your journey, the Annual Conference is designed to empower and elevate your payroll skills and knowledge. MAKE SURE YOU ATTEND THE PAYROLL EVENT OF THE YEAR!
SPREAD THE WORD Any non-members will receive 12 months Affiliate membership with their ticket, and entry to our VIP event, including a goody bag!
Visit cipp.org.uk/ACE for full details and to book
SAVE £200 - Book your place before 30 June to secure the early bird rate*
*Please note that accommodation at the Celtic Manor Resort will be booked on a first come first served basis, after this all delegates will be accommodated at the Manor House located within the Celtic Manor Resort.
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 12
Why should you attend?
ENLIGHTENING KEYNOTE SESSIONS Gain insights from leading payroll practitioners, industry experts and HM Revenue and Customs officials who will share their knowledge and experiences. Dive deep into the latest payroll trends, legislation updates, compliance strategies and best practices. INTERACTIVE WORKSHOP SESSIONS Participate in a wide range of interactive workshops and thought-provoking discussion groups led by industry experts. DISCOVER NEW SOLUTIONS Discover the latest payroll technologies, services and products from our diverse range of exhibitors. Engage with providers from across the industry to find solutions that will transform the way you manage your payroll.
PERSONAL AND PROFESSIONAL DEVELOPMENT Develop new skills and explore new perspectives, and gain valuable updates to boost your professional development and career prospects. CELEBRATE EXCELLENCE Attendance at the full conference includes a ticket to attend the CIPP’s Annual Excellence Awards 2025; the largest UK payroll awards ceremony celebrating excellence in the profession. NETWORKING Speak with like-minded professionals and grow your personal network.
WHY SHOULD YOU ATTEND?
Featured sessions
CIPP POLICY TEAM SESSION Samantha O’Sullivan ChFCIPPdip Mathew Akrigg MCIPPdip Sarah Smith MCIPPdip
LEADING BEYOND THE MASK: AUTHENTICITY, VULNERABILITY AND THE DREAM OF TRUE LEADERSHIP Dr Sue Smith EdD MA BEd FHEA FCMI Cmgr Assoc CIPD ACIPP, Education Director, CIPP
BITESIZE TRAINING Fiona Smith MCIPPdip, Assoc CIPD, Training Manager, IPP Education
THANK YOU TO OUR EXHIBITORS
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
PERSONAL DEVELOPMENT
# Be Payroll Linda Wright MCIPPdip, Operations Manager, PayEscape, discusses the benefits of membership with the CIPP and shares her experience of taking IPPE qualifications
Membership
How do you think the CIPP can support members more? Equally, how do you think the CIPP is supporting its members well now? The CIPP does an excellent job of keeping members informed through its Advisory Service, newsletters and publications. The training courses and qualifications IPPE offers are also fantastic for professional development. Do you have any tips / guidance for people just entering the profession? Stick with it! It can feel overwhelming at first. There’s a lot to learn. But payroll is an ever-evolving profession, and there’s never a dull moment. There will always be new challenges, changing regulations and opportunities to expand your knowledge. Honestly, I don’t think I’ll ever reach a point where I can say, “I know everything about payroll”, and that’s what makes it so rewarding. One of the things I love most about working in payroll is the people. I work with a fantastic team of dedicated professionals who are always ready to support our clients, and I’m incredibly proud of the work they do every day. Payroll is more than just numbers; it’s about problem-solving, helping employees and ensuring people are paid accurately and on time. Knowing my work directly impacts people’s lives is extremely rewarding. While payroll may not always get the recognition it deserves, those in the industry know just how vital it is. It’s a profession which challenges you, keeps you learning and offers real career progression. For anyone considering a career in payroll, jump in! You might discover a lifelong passion, just like I did. How long have you been a member of the CIPP? I’ve been a CIPP member for over five years, and the knowledge, resources and support
I’ve gained from my membership have been invaluable. Qualifications How did you manage studying with your other commitments, e.g. working / family life? Three years of hard work, dedication, exams, assignments and yes, a few struggles and tears(!), but I did it. Juggling full-time work, raising three kids and studying was no easy feat, especially with a global pandemic thrown into the mix. But I wouldn’t change a thing. I’m incredibly grateful to PayEscape for supporting my learning and career growth, my tutor, Pete for his guidance and of course, my family, for putting up with my stress- induced moments! What tips do you have for people considering taking an IPPE qualification? Go for it! Not only will you gain invaluable knowledge, but you’ll also connect with industry peers, and maybe even make some lifelong friends. The experience is challenging but so worthwhile. What prompted you to study with IPPE? I wanted to deepen my knowledge of payroll and ensure I had the best qualifications to support my career growth. IPPE is widely respected in the industry, so it was the natural choice for me. Which qualification did you take? Early in my career, I completed the Level 3 Payroll Technician Certificate. And in November 2023, I proudly graduated with a Foundation Degree in Payroll Management.
Which CIPP member benefits would you encourage other payrollers to use and why? Without a doubt, the CIPP’s Advisory Service! There has never been a question they haven’t been able to answer. The team is incredibly knowledgeable, always friendly and impressively quick to respond – often pulling me out of a tight spot just in time! It’s a game changer for anyone in payroll, whether you’re just starting out or have years of experience under your belt. Additionally, the CIPP mailshots, news articles and monthly magazines are fantastic tools for staying up to date with the many payroll changes. How did you begin your career in payroll? Like so many in the profession, I fell into payroll. After having my second child, I was looking for a career change when I spotted an advert for a local payroll bureau. With a background in customer service and a love for numbers, I thought, why not give it a try? Thankfully, PayEscape saw something in me and offered me a role as a Payroll Administrator. From there, I worked my way up to Team Leader, then Operations Manager and now Senior Operations Manager. Over ten years later, I can’t imagine doing anything else. I’ve developed a genuine passion for payroll, especially considering I didn’t even know what a tax code was when I started! Why did membership appeal to you? CIPP membership appealed to me because of the vast range of resources and support available. Payroll is a complex and ever-changing profession, and having access to expert advice, networking opportunities and industry updates through the CIPP has been invaluable in my career development.
Do you intend to take any more qualifications with the IPPE?
For now, with three young children, I’m hitting pause on my studies while I focus on their learning journeys. But who knows what the future holds? Never say never! n
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 14
COMPLIANCE
The Fair Work Agency: the future of enforcement
Jeni Morris, Head of the National Minimum Wage (NMW) Team, EY, talks us through the establishment of the Fair Work Agency (FWA), discussing what it is, what it aims to do and the reasons behind why it’s being created
A s payroll professionals, we stand at the forefront of an evolving landscape in employment rights and compliance. The UK government is set to introduce a transformative initiative which will reshape how we approach payroll and employment law: the establishment of the FWA. This new enforcement agency, part of the Employment Rights Bill, is designed to streamline and enhance the enforcement of employment rights across the UK. What will this mean for you and your organisation? What is the FWA? The FWA will operate as an executive agency under the Department of Business and Trade (DBT). This agency aims to be a single, recognisable brand that both workers and employers can turn to for assistance with employment rights issues. The FWA will aim to serve as a central hub for information, guidance and enforcement, making it easier for payroll professionals to navigate the complexities of employment law. What will the FWA do? The FWA will take on a multifaceted role in the enforcement of employment rights, combining the functions of several existing bodies into one cohesive agency. Here’s a closer look at their key responsibilities: Enforcing employment rights The FWA will merge the enforcement roles of various organisations, including: l HM Revenue and Customs’ (HMRC’s) NMW Enforcement Team l The Gangmasters and Labour Abuse Authority, which addresses modern slavery issues l The Employment Agency Standards Inspectorate, focussing on agency workers.
Expanding enforcement areas The agency will broaden its scope to include:
rights. The FWA seeks to empower these individuals and ensure they can access the protections they deserve. Level the playing field By taking decisive action against non- compliant businesses, the FWA will foster fair competition among employers who adhere to the law. Expand enforcement The agency will have the authority to enforce a broader range of employment rights than current bodies, with the potential to add more responsibilities in the future. It’s widely expected that enforcement will follow a similar path to that already taken by HMRC’s current NMW enforcement team, including penalties and naming and shaming. Create a balanced approach The FWA aims to support workers in accessing their rights, and businesses in understanding and complying with the law, promoting a harmonious work environment. Looking ahead The FWA is expected to be operational by late 2026 at the earliest. This initiative represents a significant shift towards more robust enforcement of employment rights in the UK. As payroll professionals, you’ll play a crucial role in adapting to these changes, ensuring compliance and supporting your organisations in navigating this new landscape. In conclusion, the future of employment rights in the UK is bright with the introduction of the FWA. Embrace this change, stay informed and prepare to be a key player in fostering a fairer work environment for all. Welcome to the future! n
l enforcing holiday pay rights l overseeing statutory sick pay l imposing financial penalties for unpaid Employment Tribunal awards. Investigating and taking action With extensive powers, the FWA will be able to: l demand documents or information from businesses l enter business premises to examine and seize documents l request ‘labour market enforcement undertakings’ from those suspected of labour market offences. Supporting compliance The FWA hopes to provide guidance to help businesses understand and comply with employment laws, making your role as a payroll professional more straightforward. Why is the FWA being created? The establishment of the FWA is following in the shadow of the Single Enforcement Body, which was to be created by the previous government (but unfortunately never made if off the ground). The FWA is driven by several key motivations, which are to: Simplify enforcement The current enforcement system is often seen as complicated and fragmented. The FWA aims to create a more efficient process for both employees and employers. Improve access to rights Many workers, particularly those in lower- paid positions, struggle to enforce their
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| Professional in Payroll, Pensions and Reward |
Issue 109 | April 2025
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