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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
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