PROFESSI NAL Official publication of The Chartered Institute of Payroll Professionals in Payroll, Pensions & Reward Issue 77 February 2022 Payroll, the heart of the business
Behind the scenes Find out how software developers prepare systems ahead of the new tax year
Tax administration and maintenance day What announcements were made that will impact the work of payroll teams?
We love payroll Hear why payroll professionals have such passion for the industry
CIPP UPDATE POLICY HUB PERSONAL DEVELOPMENT
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Editor’s comment Hello payroll professionals. Welcome to the first issue of Professional magazine for 2022. I hope you had a lovely Christmas. We couldn’t approach Valentine’s Day without mentioning everybody’s one true love –
accolade it deserves (page 46). You should be proud to be payroll, I certainly am. There have been many discussions regarding pensions over the past few months, so catch up on details of the McCloud remedy (page 32) and familiarise yourself with the latest news surrounding state pensions (page 34). I look forward to the rest of 2022 and all the surprises and challenges that payrollers will continue to rise to.
payroll. Payroll really is at the heart of every organisation, as ensuring staff are paid both accurately and on time is key to maintaining healthy employer-employee relationships. With that in mind, this issue explores why we all love payroll (page 26) and features some heart-warming payroll love stories (page 30). Be sure to check out the hot topic this month, which centres on ensuring that payroll is recognised as an industry, and that the profession is given the
Lora Murphy ACIPP (editor@cipp.org.uk) Editor
2022 brings a new year for payroll and pension professionals and the challenges they will face, both expected, and at the current time, unknown. What we anticipate is, that at some point, a curveball will be thrown, Chair’s message
of getting bogged down by business as usual, take some time this month to evaluate the strategic offering that can be made by the department. This could be as straightforward as providing the business or clients with a copy of the payroll deadlines or advising who to contact with queries. It could involve reviewing service level agreements, or the production of performance reports for the business or clients, to allow them to focus on areas of concern, such as overpayments or performance of the payroll software. The BeConnected: National Forums, which are coming soon, are also an excellent way to build your payroll and pensions network.
meaning extra work and changes for the team. Those who have already built good relationships with other departments (and with clients, for those who are client-facing), will already know how this helps to mitigate unexpected challenges. This, in turn, contributes to raising the profile of payroll within the business and with clients, as it highlights the importance of the strategic input from the department. The impact of coronavirus has undoubtedly raised the profile of payroll; however, it doesn’t stop there. We need to continuously consider ways to keep raising the profile. We have made some progress, however, there is still more to be done. If you’re guilty
Liz Lay MSc FCIPPdip FHEA ACIPD (liz.lay@cipp.org.uk) Chair, CIPP
CEO’s message
Here we are in 2022. I hope you achieved a relaxing break over the holiday period and managed to spend time with family and loved ones.
the election opening for two new directors to the CIPP board. As usual, we had many members wishing to put themselves forward for election. I’ve been grateful for the support of the nominations and appeals committee, led by our independent chair, Helen Fairfoul, who, with board colleagues, met and interviewed all candidates as part of our governance process. The successful candidates who will stand for election will be announced on 30 March 2022. Remember to use your vote. All that remains is to wish you all a safe, but successful and prosperous 2022.
At the time of writing, a virus variant, omicron is causing a rapid rise of infections and bringing with it some inevitable restrictions, including back to working from home where it is safe, and people are able to do so. I’m sure that, back in March 2020, when this all kicked off, many of us never imagined that we’d still be in the throes of this pandemic as we enter the third year. At that time, the thought of whole payroll teams and departments decamping home en masse would have been unheard of, and not even reached the conclusion of ‘this is a good idea’ for various operational and governance reasons. But we did it, and we continue to do so, and that is a credit to all professionals continuing to pay the UK. In an important change of subject, February once again sees
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 77 | February 2022
in Payroll, Pensions & Reward PROFESSI NAL Contents February 2022 THIS ISSUE’S FEATURE TOPIC PAYROLL, THE HEART OF THE BUSINESS
Also available online at professionalmag.co.uk
Features
12
13
14
Tax administration and maintenance day By Samantha Johnson
HMRC’s stakeholder conference 2021 By the CIPP policy and research team
The VAT treatment of electric cars By Peter Gladdish
16
17
18
A call for simplification of income, tax, NICs and
Did you know? National minimum wage and national living wage By the CIPP policy and research team
Payroll, the heart of the business By Jerome Smail
worker status By Justine Riccomini
22
24
26
Supporting employees on paternity leave By Danny Done
Employment law round-up By Nicola Mullineux
Why I love payroll By payroll professionals
28
30
32
Payroll giving week By Mervi Slade
Payroll love stories By payroll professionals
The McCloud judgement By Mathew Akrigg
| Professional in Payroll, Pensions and Reward | February 2022 | Issue 77 2
34
38
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
What are the issues women face with their state pension? By Henry Tapper
How are software developers preparing for the new tax year? By Neil Tonks
Chief executive officer Ken Pullar FCIPP CIPP board of directors Jason Davenport MCIPP MIoD Louise Gray ChMCIPPdip
40
46
Stuart Hall MCIPPdip Helen Higson ACIPP Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA(Hons) FCIPP
Carole Pearson MCIPP Katie Sharpe MCIPPdip
Cliff Vidgeon BA(Hons) CMA ACG ChFCIPP Clare Warrington MSc FCIPPdip AFHEA
Useful contacts
Hot topic – Payroll is at the heart of every organisation – it’s time for our industry to
Moving with the times: Moorepay’s employee mobile app By Anthony Vollmer
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
feel the love By Melanie Pizzey
Regulars
01 Editor’s comment, and
32 Pensions 35 Payroll news 36 Industry news, Movers and shakers 38 Technology 41 Wordsearch 46 Hot topic 48 Confessions of a payroll manager
Chair’s andCEO’smessage
04 CIPPupdate
Events, news and developments
05 My CIPP
On your behalf, Advisory, CIPP climate change update
0121 712 1013 cipp.org.uk @CIPP_UK
10 Personal development Diary of a student, Apprenticeshipweek
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 2021. 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.
12 Compliance 18 Feature topic 22 Reward
Full issue including additional online content available at professionalmag.co.uk
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| Professional in Payroll, Pensions and Reward |
Issue 77 | February 2022
CIPP update
BeConnected: National Forums TO HELP you get your year off to a great start, why not join one of our BeConnected: National Forum sessions? All members can join the online dates free of charge*, and they are a great way to keep your skills and knowledge up-to-date and to network with your peers in the industry. You can book to join us online on the following dates:
It’s good to see you again! AS THIS is the first official issue of Professional for 2022, happy new year to you all. Hopefully the year has started well, and you’re feeling recharged, refreshed and ready to tackle 2022 and all it brings your way. BePayroll WOULD YOU like to be part of our BePayroll campaign, tell the industry what you do and help us raise the profile of payroll professionals? If so, look at our new BePayroll webpage, showcasing your fellow peers and the profession. The site can be found here: http://ow.ly/iaEv30s78jl. You could inspire someone else to follow in your footsteps, or offer advice to others in a similar position to you. Be proud of your career and tell the profession why you’re proud to BePayroll.
● 17 February ● 28 February ● 17 March.
*All members can attend the online BeConnected: National Forums free of charge. Face-to-face BeConnected: National Forums can be attended by associate members and above.
Market Insight Survey THANK YOU to all of you who helped us to complete our annual Market Insight Survey throughout January. The results of the survey allow the Institute to plan for the future and ensure the products and services provided are assisting and supporting you in your careers and professional lives, as much as possible. Once the results have been analysed, the highlights will be shared in a future issue of Professional magazine. Once again, thank you for your time and your support.
Foundation Degree enrolments THE FOUNDATION Degree in Payroll Management is now open for spring enrolments, as is the Recognition of Prior Learning (RPL). If you have over two years’ experience in payroll, are competent in manual calculations or have successfully completed the Payroll Technician Certificate, you may be able to complete the RPL assessment and move straight onto year two of the Foundation Degree. Should you need more information, you can visit the qualifications page here: http://ow.ly/Exrr30s78jN, or email enquiries@ cipp.org.uk to discuss the options available to you. Enrolments for the RPL assessment are taking place on: ● 5 January ● 2 February ● 2 March. The student loan enrolment deadline for the Foundation Degree is 18 March, while the general deadline is 29 April.
Payroll Update course DON’T FORGET that your membership allows you a 50% discount on the annual Payroll Update course. You and your team can start the year as you mean to go on, by ensuring your knowledge and skills are kept up-to- date and compliant for the year ahead. You can find out more about the Payroll Update course and how to use your 50% discount here: http://ow.ly/Rn4S30s78k8.
| Professional in Payroll, Pensions and Reward | February 2022 | Issue 77 4
Policy hub
On your behalf
Policy teamupdate
The CIPP’s policy and research team provides an update on recent and future activities
H ello payroll professionals, and welcome to 2022! The policy team hope you had a lovely Christmas and new year and managed to take a break over the festive period after the whirlwind year that was 2021. 2022 is already shaping up to be a busy one. Payroll resolutions If you follow the CIPP on any of the social media platforms we use – LinkedIn, Facebook or Instagram – you will have spotted our payroll resolutions. They were posted daily throughout January, to keep payrollers motivated in what can sometimes feel like the longest month of the year. The resolutions were designed to encourage engagement and interaction, but also to remind everyone to reflect on their achievements and accomplishments, and not to be so hard on themselves. A big thank you to anyone who commented on, liked or shared those posts. We really enjoy hearing back from those working in the payroll profession, and the feedback was great. BeConnected The team have been working hard behind the scenes to shape and prepare the content for the CIPP’s BeConnected events, which will take place throughout February and March. At the time of writing, due to the current situation with coronavirus, some of the face-to-face sessions have been shifted to an online format, but we are hoping we can deliver in person for the March events. We look forward to seeing you all there!
HMRC stakeholder conference Back at the start of December 2021, members of the policy team, along with the chief executive officer, Ken Pullar, attended Her Majesty’s Revenue and Customs’ (HMRC’s) stakeholder conference. You can read all about the fantastic hybrid event on page 13 of this month’s issue of Professional . Changes to the team Just as the payroll profession is ever- evolving, so is the CIPP’s policy team. The sad news is that Gemma Mullis, one of the policy and research officers, has moved on. But the great news is that she is still working for the CIPP, but in the position of end point assessment specialist. Read more on this in movers and shakers on page 36. Gemma will be missed, but we wish her every success in her new role. Umbrella companies: a new call for evidence On Tax Administration and Maintenance Day (TAMD), the government published a call for evidence (CfE) focussing specifically on how umbrella companies interact with the tax and employment rights systems. The document asks for views from stakeholders on the role these companies play in the labour market, because of concerns that have been raised. The CfE also details what action the government has already taken to try and prevent non-compliance and to improve worker protection. You can find out more about TAMD on
page 12, and the CfE can be located here: http://ow.ly/L5Ba30s71qE.
The CIPP, MGroup Services and Oracle joint webinar On 25 January 2022, at 2pm, the CIPP, M Group Services and Oracle delivered a webinar which discussed current payroll trends, providing tips on best practice, particularly when considering the constant change experienced by the profession. Topics covered included the health and social care levy and national minimum wage, and discussion centred on how to ensure successful implementation of these elements of pay. There was also a focus on the importance of data and how digital transformation could assist payroll departments in adapting to changes. Welsh government consultation on income thresholds for attachment of earnings orders Towards the end of 2021, the Welsh government published a consultation, which centred on changes to the income thresholds for attachment of earnings orders. The CIPP responded to this consultation, as concerns had been raised by CIPP members working within payroll software development. While the rationale behind changes to thresholds was well reasoned and carefully thought out, the implementation timeframes could cause issues with development of software if not carefully considered. The CIPP’s response can be located here: http://ow.ly/ YgeY30s7Gjs. n
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| Professional in Payroll, Pensions and Reward |
Issue 77 | February 2022
MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q: A client wishes to pay an employee £10,000 compensation in respect of a payment for hurt feelings along with their termination payment. They have instructed us it should be processed as a tax-free payment on top of their redundancy payment. Is this correct? A: A compensation payment in respect of injury to feelings is subject to both tax and National Insurance contributions (NICs) through the payroll – this is stipulated in section 406 (2) of the Income Tax (Earnings and Pensions Act) 2003 (ITEPA 2003). For reference, see: https://bit.ly/3G1IJiB. The exception to this rule is that, if the injury to feelings payment is wholly concerned with discrimination that occurred before the termination, and is therefore unrelated to the termination process, then it is not subject to tax and NICs as part of the termination package. Q: A client has suggested that the coronavirus statutory sick pay (SSP) rebate scheme, which was recently re-introduced, is aimed solely at the hospitality industry. Can you confirm that it is not just for the hospitality sector, and that any small and medium-sized employers can claim SSP for up to two weeks per employee, regardless of their business sector? A: The coronavirus SSP rebate scheme was re-introduced on 21 December 2021. The scheme is open to all UK-based employers,
employee’s absence for up to 28 days. Can you confirm this is correct please? A: To allow all general practitioners in Great Britain the opportunity to focus on and support the coronavirus vaccine booster programme, an amendment to the SSP regulations was introduced. This allowed employees to self-certify for up to 28 days for absences longer than seven days that commenced on or after 10 December 2021. The extension of the self-certification period was expected to last until 26 January 2022, at the time of writing. For reference, see: https://bit. ly/3t3vWc3. Q: A former employee has contacted my client to advise they have not received their P45. Upon investigation, it was found that a P45 was issued but the individual moved house shortly before leaving the company. The client has since provided the individual with a statement of earnings; however, she is requesting a P45 as she says she never received one. A: If the employee failed to advise the employer of their new address, and that employer has already issued form P45, a second P45 cannot be issued. There is nothing that can be done, but the employer can provide a statement of earnings upon request by the individual concerned. An employer is simply required to comply with section 36 of the
who operate a pay as you earn (PAYE) payroll and had less than 250 employees as of 30 November 2021. The scheme is not just available to the hospitality sector, but open to all sectors. Employers can claim for up to two weeks’ worth of SSP per employee who has been absent for coronavirus-related reasons, regardless of whether they have claimed for them before. For reference, see: https://bit.ly/3q1cb31. Her Majesty's Revenue and Customs (HMRC) is also offering other support to the hospitality and leisure sectors, including £6,000 grants to premises, along with £100 million in discretionary funding given to local authorities.
The coronavirus SSP rebate scheme recently re-opened. Which sectors can use the scheme?
Q: We understand that a self- certification form can now cover an
| Professional in Payroll, Pensions and Reward | February 2022 | Issue 77 6
O N L I N E L E A R N I N G
Policy hub
Holiday pay and leave
ITPEA 2003 regulations and issue a P45 when an employment ends. For reference, see: https://bit.ly/3qSn06r. The individual will have to complete a new starter declaration form for their new employer. Following receipt of form P6 from HMRC, the new employer can process any previous pay and tax details. It is an employee’s responsibility to provide their employer with the correct details. Q: We would like to understand what the most recent position is regarding gender recognition in relation to the payroll function, if an employee does not hold a gender re-assignment certificate. A: HMRC guidance states: "Once your employee tells you they plan to change gender, you can update your payroll records with their new gender and any changes to their title and name. If you need to update both your employee’s name and gender, you must report these changes in separate full payment submissions. If you don’t, HMRC may create duplicate payroll records and your PAYE bill may be higher than it should be. Once your employee has given you a copy of their new birth certificate, you should check if their change of gender affects their NI. You should also photocopy the certificate for your records and give your employee the original." For reference, see: http://ow.ly/6qHv30s7NSb. Q: Our client’s company pays contractual maternity pay for 26 weeks. They are aware they can reclaim 92% on 13 weeks of statutory maternity pay (SMP), and also wish to reclaim 92% of the remaining 26 weeks’ pay but are concerned that topping up the SMP will prevent them from doing so. A: SMP is a statutory right. Therefore, if the employee qualifies for SMP, they are entitled to be paid for six weeks at 90% of their average weekly earnings (AWE), and a further 33 weeks at the lower of 90% of their AWE or the standard weekly rate of £151.97. Most employers will be able to reclaim 92% of this statutory payment, and 103% can be claimed if the business is regarded as a small employer. An employer can set up terms and conditions to contractually enhance SMP, but any additional occupational maternity pay that exceeds the SMP rate for any
given day cannot be reclaimed. For reference, see: https://bit.ly/3qSnlWL. The CIPP advises that, where companies do enhance their statutory payments, they ensure the rules are clearly defined in company policy. Q: A client employs a military reservist who has been called up to drive ambulances, due to the pandemic. Should my client pay this employee, and if so, can any costs be reclaimed from the Ministry of Defence (MOD)? A: When an employee is called up for active duty, an employer is not required to pay their salary or any pension costs during their absence. The individual will be paid by the MOD. An employer can, however, claim financial costs relating to the cost of a temporary replacement, advertising fees, training costs and other costs related to employing a replacement employee. Full details are provided in HMRC guidance: https://bit.ly/3qXu1mq. Small to medium-sized businesses can also claim up to a maximum of £500 a month. This is unless both of the following apply: ● their annual turnover was more than £25.9 million in the 12 months before the reservist was called up ● they had more than 250 employees or partners on the date of mobilisation. One final consideration would be if the active service lasts less than 12 months, the payroll record should have the irregular pay indicator set for real time information (RTI) and the tax code should be changed to BR on a week/month1 basis. Q: An employee is currently on maternity leave and receiving SMP only. She also participated in a give as you earn (GAYE) charitable giving scheme. Can deductions for GAYE schemes continue during a period of SMP? A: As GAYE is a voluntary deduction, this means it can continue during a woman’s SMP pay period. HMRC guidance states: “SMP is treated as earnings, so your employer will make any deductions (such as income tax and NICs) that are due. Your employer can also make other deductions from your SMP, for example, pension contributions or trade union subscriptions.” To find out more on this, and maternity benefits more generally, see: http://ow.ly/hril30s7Ofw. n
Duration One half day
CPD 3 points
Case law continually produces changes to employees’ statutory holiday leave and pay entitlement, which are covered in this informative course, along with the various types of leave and the calculation of pay.
Visit cipp.org.uk/training to book your place
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| Professional in Payroll, Pensions and Reward |
Issue 77 | February 2022
Fast-track your learning
Are you looking to progress faster through our Foundation Degrees in either payroll or pensions?
Do you have at least two years’ experience as a payroll or pensions professional?
The CIPP’s Recognition of Prior Learning online assessment uses evaluation of existing skills and knowledge to help youmove straight on to year two of the Foundation Degrees.
To find out more, email enquiries@cipp.org.uk or call 0121 712 1044
My CIPP
Update: the CIPP’s climate action plan
2 0 3 5 CIPP COMMITMENT TO CLIMATE CHANGE
The CIPP’s business support coordinator, Amir Aziz ACIPP, provides an update on the CIPP’s climate action plan and the Institute’s goals and targets for the future
I n Glasgow, on1November 2021, the Conference of the Parties (COP) 26 began. World leaders arrived with one aim – to tackle the escalating issue of climate change. The event saw two weeks of thought-provoking debates and speeches and was billed as being unlike any of its kind. So, what did we learn? To plant more trees? To use less water? To donate that extra 10p we saved on our meal deal towards an environmental cause? Well, the answer is yes to all these things, and so much more. The event discussed the importance of the current movement, explaining how everyone has a part to play in its success going forward. Other significant outcomes included: ● starting to ‘phase out’ the use of coal (responsible for 40% of annual CO2 emissions) ● a pledge to significantly increase money to help poor countries cope with the effects of climate change and make the switch to clean energy ● the world’s biggest CO2 emitters, the US and China, agreed to co-operate more in areas such as methane emissions and switching to clean energy ● leaders from over 100 countries promised to stop deforestation by 2030 ● financial organisations controlling $ 130 trillion agreed to back ‘clean’ technology. Albert Einstein famously said: “Any fool can know; the point is to understand”. So, anyone can be given information, but it is up to them to understand that information and
put actions in place to help them achieve their goals. Following COP26, the real question is, has the world emerged more knowledgeable, informed and inspired to make changes? This is a question that can only be answered with time.
set us apart. At the CIPP, we recognise our successes, but also realise there are areas for improvement, and therefore acknowledge all 17 SDGs and how to approach them. The goal is to implement positive steps to improve our scores in all areas by 2035. Although the journey will be long, the CIPP is dedicated to being net zero by 2035. We believe that, with continued investment of time and resources, we can achieve this. We want you to get involved by telling us what your company is doing. Contact us at: admin@cipp.org.uk , for the chance to be featured in our next climate change update. Together, we can make a difference. Our commitment I’ll depart with a statement from the chief executive officer, Ken Pullar, confirming our commitment to climate change: “The CIPP recognises the climate is changing globally at an unprecedented rate because of human activity, and we are committed to playing our part in improving the global problem and supporting government objectives to become net zero. We aim to support the payroll profession in becoming sustainable and, as such, within the next 12 months we commit to publishing our roadmap towards becoming net zero by 2035. This is a crucial step for the CIPP in improving our service delivery, as well as encouraging and supporting members, and the wider profession, to act sustainably. We will ensure we are conducting our business in a sustainable and ethical manner. We have a project team leading on initiatives to do more to reduce our contribution towards climate change, to become net zero. This includes creating the right conditions and incentives for our colleagues, members, clients and suppliers to play their part. We are also proud to have signed up to The CAFA Climate Commitment to demonstrate our responsibility in understanding our environmental impact and encouraging behavioural change to operate more sustainably.” n
CIPP update So, where is the CIPP since the last
update? We have continued to take a more sustainable stance towards climate change and are still committed to our target of being carbon neutral by 2035. How, you may ask? Well, not only have we started taking practical action, but we have continued to invest time and resource into understanding current company and staff carbon emissions, to make more meaningful changes going forward. We are creating our sustainable development goals (SDGs). From ‘no poverty’, to ‘quality education’ to ‘life below water’, SDGs are17 interlinked global goals, acting as a ‘blueprint to achieve a better and more sustainable future for all’. Using the B impact-assessment questionnaire, we established key areas where the CIPP is contributing most to create a more sustainable future. This infographic highlights the SDGs the CIPP is currently making the most progress in, providing us with a stable foundation to build on over the next 13 years. We hope to expand on these scores by leading the industry with new and innovative ideas that
Chartered Institute of Payroll Professionals Active Assessment scores
PEACE, JUSTICE AND STRONG INSTITUTIONS 34.7%
The six SDGs the CIPP is making the most progress in
RESPONSIBLE CONSUMPTION AND PRODUCTION 16.3%
NO POVERTY 23.8%
REDUCED INEQUALITIES 15.3%
DECENT WORK AND ECONOMIC GROWTH 23.6%
QUALITY EDUCATION 41.8%
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| Professional in Payroll, Pensions and Reward |
Issue 77 | February 2022
PERSONAL DEVELOPMENT
Diary of a student… JaneQuigleyMCIPPdip Senior payroll controller Gestamp Tallent Ltd.
How did you manage the work- life balance and your study? Do you have any tips for others who are in the same position? I stuck rigidly to the timetable, and always completed my assignments a couple of days ahead of schedule in case anything unexpected happened. I made studying my priority and gave myself a routine. I studied most nights until nine, and every Saturday and Sunday until twelve. At the time, I was working from home, which was advantageous, as I could log off from work and start studying immediately. My advice would be to attend all the workshops and tutorials as they support the information in the study materials and give tips to help with the assignments. You do have to make sacrifices but it’s worth it. What would you say is the most important thing you learnt? I learnt a lot about myself and that I’m much more resilient than I thought. The whole experience has taught me I can achieve anything if I put my mind to it. What did you gain from this qualification – both in terms of skills and career progression? It has advanced my leadership and analytical skills, which I have transferred to the workplace. The qualification made my CV stand out from other candidates and gave me more confidence when attending interviews. It also helped me secure my current role as senior payroll controller. n
Tell us a little about your background and life, so far? I began working for Aldi in 1995, in the Darlington regional distribution centre as an administration assistant in the accounts department. Although I started my career in finance and studied at the Association of Accounting Technicians (AAT), I always had an interest in payroll. Several years later, an opportunity arose as a payroll administrator, which I took. I continued in this role until I was made redundant in November 2020, when the department was relocated to in Warwickshire. What can you tell us about your career and qualifications? I received my long service award in April 2020, for 25 years at Aldi. Most of that time I spent within the payroll department covering all aspects of end-to-end payroll. I recently completed the CIPP’s Foundation Degree in Payroll Management and graduated in November 2021. I am currently employed as senior payroll controller at Gestamp Tallent Limited. Why did you choose to study the Foundation Degree? Although I had years of experience and a good working knowledge of payroll, I felt I needed a qualification to support this.
I had previously attended CIPP update courses, where I learned about the Foundation Degree. I decided if I wanted to progress my career, then I would need to challenge myself and the Foundation Degree would enable me to do so. When researching payroll vacancies, the CIPP Foundation Degree was the preferred qualification. It would, therefore, give me an advantage when applying for higher level positions in payroll. How did you find the course? I found it really challenging and, at times, I felt like giving up. It was difficult balancing working full-time and studying, while also applying for jobs and attending interviews. The support provided by the tutors was invaluable, and I had lots of encouragement from my husband, family and work colleagues. What advice would you give to others who are thinking about studying to improve their career? I would say, just go for it. It’s the best thing I’ve ever done, and it has helped me in my career. I feel much more confident in my ability and knowledge of payroll. It was hard work, but it was worth it. I felt very proud on the day of graduation, wearing my cap and gown and collecting my certificate.
Enrol now at cipp.org.uk/study
| Professional in Payroll, Pensions and Reward | February 2022 | Issue 77 10
Let’s celebrate apprenticeship week
The 15th annual national apprenticeshipweek (NAW) is scheduled to take place on 7-13 February 2022. Apprenticeships are particularly important for payrollers, as they are one of the routes that can be taken to enter into, but also to progress, within a payroll career. Not only that, but payroll professionals often must deal with the calculation and reporting of the apprenticeship levy as part of their day-to-day role. For the second year running, the theme of NAW for 2022 will be ‘build the future’.
Level 3 ● 13 June 2018 – the date the level 3 in payroll administration apprenticeship was approved for delivery ● £9,000 – the level 3 payroll administration apprenticeship can be funded using the apprenticeship levy – the maximum funding is £9,000 ● 18 months – the typical duration of the level 3 apprenticeship before arriving at the apprenticeship gateway ● 3 months – once at the gateway, the apprentice must complete all assessments within this time frame and can’t progress to the next assessment until the previous one has been passed.
Level 5 ● 16 December 2020 – the date the level 5 payroll assistant manager apprenticeship was approved for delivery ● £11,000 - the level 5 payroll assistant manager apprenticeship can be funded using the apprenticeship levy – the maximum funding is £11,000 ● 24 months – the typical duration of the level 5 payroll assistant manager apprenticeship before arriving at the apprenticeship gateway ● 4 months – once at the gateway,
Paying the apprenticeship levy ● who has to pay? – employers who have an annual pay bill of over £3 million ● how much do they pay? – the apprenticeship levy is charged at a rate of 0.5% on an employer’s annual pay bill, but employers are given an annual apprenticeship levy allowance of £15,000 ● how do they pay it? – the apprenticeship levy is reported through the employer payment summary (EPS) and paid across in the same way as other liabilities. Using the apprenticeship levy ● how long does an employer have to use funds? – they have a period of 24 months after the funds enter their apprenticeship service account to use them ● how can employers transfer levy funds? – levy paying employers can transfer up to 25% of their levy funds to other employers if they wish ● top tip – be aware that apprenticeships are a devolved policy, so how the apprenticeship levy is managed will differ based on whether an organisation is located in England, Wales, Scotland or Northern Ireland.
this is the typical time taken for apprentices to complete all assessments at this level.
What is the apprenticeship gateway? The apprenticeship gateway is the point at which the apprentice has completed their training. The training provider and employer will have agreed they are ready to be assessed on their learning. At this stage, an end point assessment organisation will assess the apprentice, ensuring they meet the key skills and behaviours for the standard of the qualification.
We want to hear from you Do you have anything to share about how the apprenticeship levy is processed within your organisation? Have you ever enrolled on a payroll-related apprenticeship? Do you want to talk about apprenticeships more generally? Get in touch, at policy@cipp.org.uk . Get involved Individuals, employers and training providers are encouraged to get involved in NAW, and the hashtag #buildthefuture can be used on social media to promote awareness. A toolkit is available which will help in planning activities related to NAW 2022. This can be found here: http://ow.ly/Xk5w30s72aU.
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| Professional in Payroll, Pensions and Reward |
Issue 77 | February 2022
COMPLIANCE
Tax administration and maintenance day
Samantha Johnson LLB(Hons) ChMCIPPdip, CIPP policy lead summarises key announcements made on 30 November for payrollers to be aware of
T he number of acronyms in payroll continues to grow, and on 30 November 2021, we were introduced to Tax Administration and Maintenance Day, or TAMD for short. In March 2021, the first ever UK Tax Day was held, which involved the release of several consultations and calls for evidence from the UK government. TAMD, bearing the less succinct title, was the second instance of consultations being released en masse and included some key government consultation responses too. What was the impact of TAMDon the payroll profession? In June 2021, the CIPP responded to the consultation, Raising standards in the tax advice market , which considered introducing mandatory professional indemnity insurance (PII) to those providing tax advice. The consultation explored a definition of tax advice, and whether outsourced payroll, software providers or employers providing advice on employee benefits could fall within this definition. The CIPP response concluded payroll professionals were most likely to engage in providing information and guidance as part of their role. There are some payroll professionals, however, that will engage in tax advice. There was recognition there is often a fine line between advice and guidance, as some payrollers are asked by clients or employees to provide information outside the responsibilities of their role. On TAMD, the government response confirmed mandatory PII would not be introduced for tax advisers. Instead, the government will consult in early 2022 to determine a concrete definition of tax advice, before it imposes measures on those who provide it. The CIPP welcomed
standards in tax advice. The CIPP continues to encourage payroll professionals to be mindful of the remit of their role and feel empowered to push back when being asked to engage in advice where it is not appropriate to do so. The government response confirmed that mandatory PII would not be introduced for tax advisers The government also released a response to the call for evidence on the tax administration framework. This had the aim of delivering a system fit for the twenty first century. This may seem a somewhat peculiar aim, given we’re over one fifth of the way through that century! However, in line with its ten-year tax administration strategy to build a trusted and modern tax administration system, the government confirmed it will consider how to best ‘develop, prioritise and sequence’ next steps. Her Majesty’s Revenue and Customs (HMRC) will also be developing a roadmap for future consultation and analysis on this ten-year vision. Interestingly, the government confirms that, following the review by the Office of Tax Simplification in Summer 2021, it has no plans to explore changing the tax year end date at the present time. New calls for evidence The negative press umbrella companies have received since the implementation of off-payroll working has been unavoidable, and the government is keen to explore
these concerns. A call for evidence on the umbrella company market invites views on how these companies interact with both the tax and employment rights systems. This means it is a joint venture between HMRC, HM Treasury and the department for Business, Energy and Industrial Strategy. The CIPP is keen to hear from members who wish to share their views on this subject, and encourages you to contact policy@cipp.org.uk to ensure the payroll voice is represented. HMRC is also looking for input on modernising tax debt collection from non- paying businesses. Professional magazine recently featured an article from HMRC, covering the steps it is taking to support businesses in managing debt: http:// ow.ly/2egC30s4IRH. The call for evidence is seeking views on how HMRC can reflect the changing nature of the economy in its debt collection activities. New consultations The impact of the McCloud judgement continues to ripple across the public sector, and this was seen during TAMD. The consultation on teachers’ pension schemes (TPS) identifies that changes to TPS rules are needed to address age discrimination, identified in the McCloud case. While this case may have been of little consequence to payroll professionals in the private sector, those in the public sector continue to deal with its effects. The policy team takes a deeper dive into this case on page 32. The future of TAMD HMRC and the government continue to explore the future of a more digital and fit- for-purpose tax administration system. The profession can be certain that changes can, and will, be implemented which will impact payroll, and the CIPP will continue to keep you up to date. n
this response, as research confirmed mandatory PII alone would not raise
| Professional in Payroll, Pensions and Reward | February 2022 | Issue 77 12
Compliance
HMRC’s stakeholder conference 2021
Staff from the CIPP attended Her Majesty’s Revenue and Customs’ (HMRC’s) stakeholder conference in London in December 2021. Read on to hear all about the day and the areas covered
S amantha Johnson and Lora Murphy, from the CIPP’s policy team, along with chief executive officer, Ken Pullar, jumped at the chance to attend HMRC’s stakeholder conference, held at its Stratford regional office. The team were eager to interact face-to-face once again, a refreshing change from that all-too-familiar feeling of speaking to a screen. Jim Harra, the first permanent secretary and chief executive of HMRC opened the event, declaring his pride for how the department had delivered throughout the pandemic. He discussed his ambition to continue to improve the service HMRC provides, and thanked stakeholders, acknowledging the vital role they play. During the pandemic, HMRC’s services were prioritised, and impacts this had on performance were recognised. Jim was clear, however, that HMRC will take learnings from this, and continue to work with customers, stakeholders and colleagues to build a trusted and modern tax and customs department. Financial secretary, Lucy Frazer, followed the opening speech, describing challenges she faced in the first weeks of her role, where she had ‘to hit the ground running’. In this time, HMRC prepared for the autumn 2021 budget and spending review, tax administration and maintenance day and passed the Finance Bill through the House of Commons. Attention turned towards the impact HMRC has on all aspects of life, and Lucy discussed the vital importance of the stakeholder role. She specifically mentioned the Employment and Payroll Group, on which the CIPP represents payroll professionals. She stressed the importance of customer service within HMRC and acknowledged work needed to be done to get the basics right. This message was reflected throughout the day. Lucy discussed the investment secured in the spending review 2021. £136 million to create the single customer account, and a further £468 million to continue modernising
the tax system. A key focus was placed on the importance of digitalisation, and the role that making tax digital (MTD), real-time information (RTI) and the single customer account would play in that vision. The transparency and engagement from HMRC throughout the day was encouraging She summarised by describing her vision for the future of HMRC – making it easier to pay and collect tax because the system works for all. A trusted tax system ready to deal with the demands of the modern world. Jonathan Athow, director general of customer strategy and tax design, explored the HMRC strategy further. He outlined the values and customer charter that HMRC is working to, pinpointing six elements of the tax administration strategy: ● MTD ● RTI ● timely payments ● single customer account ● improved standards in tax advice ● a modern tax administration framework. The team set out a plan of key deliverables over the next three years, and the central themes running throughout, which included delivering: 1. the tax administration strategy 2. HMRC’s core purpose 3. government policy. Myrtle Lloyd, director general of the customer services group, kicked off with a video that described the challenges and the triumphs of the covid support schemes. The CIPP featured, sharing the challenges faced by its Advisory Service team and the pace of change seen throughout the delivery of the coronavirus job retention scheme (CJRS). The film concluded with several statistics. 1.3 million businesses and 11.7 million jobs
were supported by the CJRS. 10.4 million self-employed income support scheme grants were given to 2.9 million individuals, and 5,000 HMRC staff worked to deliver the covid support schemes. Myrtle reflected on the three key priority areas during Covid-19, which were to: 1. protect livelihoods 2. deliver the UK’s transition from the European Union 3. keep delivering key services. HMRC described how its services had been impacted by the pandemic but confirmed they would return to pre- pandemic levels by April 2022. Nick Jones, deputy director of debt management, shared the approach HMRC took to debt collection during the pandemic, as activity was paused during the most challenging periods. Nick was eager to promote the support available, with time to pay schemes, case-by-case deferral options and debt advice available for struggling businesses. HMRC has restarted debt collection, but Nick stressed it would take a compassionate approach, with insolvency petitions only considered after all alternative routes were explored. The conference continued with breakout sessions on MTD, working with agents, HMRC’s approach to fraud and the journey to full customs and declarations controls. The conference concluded with a question-and-answer session with a large number of the executive team in HMRC, who were open to answering anything. The transparency and engagement from HMRC throughout the day was encouraging. However, the CIPP and HMRC acknowledge there is still more to be done in delivering the service customers need and deserve. The CIPP will continue to work as a key stakeholder with HMRC and represent the voice of the payroll profession. n Do you want to share your challenges with HMRC? Is there a better way of doing things to be explored? Share your thoughts with the policy team, at: policy@cipp.org..uk.
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| Professional in Payroll, Pensions and Reward |
Issue 77 | February 2022
COMPLIANCE
The VAT treatment of electric cars
Peter Gladdish, managing director at PSTAX , considers the value-added tax (VAT) treatment of electric cars used in a business, a current area of debate
W ith a continuing push towards all-electric cars, one would trust that the tax rules would be carefully thought out and consistently applied to provide certainty and clarity for businesses. Unfortunately, it seems there is still some way to go. Recovery of VAT on the purchase of an electric car There is a popular misconception that a business can always enjoy full recovery of VAT on the purchase of an electric car on the premise that the ‘green’ credentials confer that right automatically. In reality, the VAT treatment of an electric car is no different to that of a motor car powered by any other means. Assuming a business ordinarily recovers all its VAT costs, the VAT can be reclaimed on purchasing a motor car that is to be used exclusively for business purposes. However, if there is any private use of the vehicle, no VAT is recoverable. Private use will range from using a company car as if it were the driver’s own vehicle, to using a pool car for a personal journey. For VAT, private use includes any travel between a place of work and home, with some limited exceptions. These rules apply whether the car is purchased outright or using hire purchase or lease purchase. Where a car is leased or hired for use in a business and made available for personal use, VAT recovery is restricted to 50%. The recovery VAT on the cost of repair
or maintenance of the car is not restricted. If the VAT recovery is restricted to 50%, an employer doesn’t account for VAT on payments for private use from an employee, usually made by salary deduction. This is because the 50% restriction has already made the VAT adjustment for private use. The VAT treatment of an electric car is no different to that of a motor car powered by any other means The VAT on commercial vehicles can be recovered in full. Generally, Her Majesty’s Revenue and Customs (HMRC) views any incidental private use of most commercial vehicles as de minimis. This would include regular travel between an employee’s home and place of work. However, should the vehicle be used more extensively for private purposes, the business can either: ● restrict the recovery of VAT costs to reflect the private use; or ● recover the VAT costs in full, but account for VAT each period to reflect the private use – known as the ‘Lennartz Principle’.
home, the electricity used will form part of the domestic supply to the householder and be subject to VAT at the lower rate of 5%. For public charging points, strong representations have been made to HMRC that the 5% rate should apply as well. The supply of power received by the driver at public charging points will invariably be of a de minimis quantity below which a supply is always deemed domestic and chargeable at 5%. However, it is HMRC’s policy that the supply of power at a public charging point is subject to VAT at the standard rate of 20%, backed by the argument that there is not an ongoing supply to one person in which the consumption, and therefore the liability, can be calculated. Where employees charge an electric car at their residences for business and private use, the employer has a choice. It can either restrict the recovery of VAT on the cost of the electricity attributable to business use. Or, it can recover VAT in full on the cost of electricity and account for VAT on the value of the private element as if it had received it as income. In either case, the employee would have to keep a record of business and private mileage. Mileage allowances This is where things become difficult and, I would argue, unnecessarily so. The HMRC advisory rate for a company-provided electric car is 5p per mile. It should be noted that this only relates to wholly electric vehicles. Hybrid vehicles are
VAT on recharging costs Where a vehicle is recharged at a driver’s
| Professional in Payroll, Pensions and Reward | February 2022 | Issue 77 14
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