Official publication of The Chartered Institute of Payroll Professionals in Payroll, Pensions & Reward PROFESSI NAL Issue 94 October 2023
Vendor risk management Are you ensuring you’re minimising potential threats to your business? Trends, tips, time Learn about current technology trends , discover technology tips and learn how technology has changed over time Lower earners’ pensions What’s the government currently consulting on that could impact the future of payroll?
CIPP UPDATE POLICY HUB PERSONAL DEVELOPMENT
cipp.org.uk
Meet us at CIPP ACE 4th - 5th October 2023 The Celtic Manor Resort, South Wales
Payroll Outsourcing Services Accurate, Compliant and Secure
01276 456902 sales@frontiersoftware.com www.frontiersoftware.com
OFFICES IN AUSTRALIA, INDIA, MALAYSIA, NEW ZEALAND, PHILIPPINES, SINGAPORE AND UNITED KINGDOM
24
Good, bad or indifferent, if you are not investing in new technology, you are going to be left behind.” Phillip Green
Editor’s
45
comment
Autumn is well and truly upon us, having gone from beautifully sunny days to rainy episodes and leaves falling from the trees. Of course, we’re also into spooky season, as Halloween falls on 31 October. This issue, we’re reminding you not to be
spooked by technology, and hopefully the selection of articles on precisely this topic will allay any fears you may have. Hear from our panel of experts in this month’s feature article (page 24), as we put a selection of questions to them on how technology may influence the payroll industry in both the near and far future. Then flick to the ‘technology’ area of the magazine to hear from an array of professionals regarding current technology trends and how far the payroll industry has come over the years thanks to innovation in this space (pages 50, 52 and 54). Continuing from discussion of cyber-security in the September issue of Professional , read all about important considerations for vendor risk management on page 45, as this is a topic we envisage will only continue to grow in importance. We also can’t forget that October is the month in which the CIPP holds its flagship event, the Annual Conference and Exhibition and the fantastic Annual Excellence Awards. There’s a great line up this year and we can’t wait to see you and to celebrate your successes from the last year. I hope you enjoy October’s issue of Professional magazine!
50
Lora Murphy MCIPP (editor@cipp.org.uk) Editor
52
24 - Feature article – don’t get spooked by technology By Jerome Smail 45 - Navigating vendor risk management: your top questions By Vivek Valmiki 50 - The technology trends for payroll professionals to look out for By Jaspal Randhawa 52 - The dark ages weren’t that long ago By Don Macarthur
THE DARK AGES
LONG AGO ’
WEREN T THAT
54
54 - Employee benefits: processes and technology By Susan Ball and Flora Barnes
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| Professional in Payroll, Pensions and Reward |
Issue 94 | 0ctober 2023
Chair’s
Chief executive officer Jason Davenport MCIPP MloD CIPP board of directors Clare Warrington MSc FCIPPdip AFHEA Louise Gray ChMCIPPdip Stuart Hall MCIPPdip Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA (Hons) FCIPP Brendan Mulkern FCIPP Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP Cliff Vidgeon BA (Hons) CMA ACG ChFCIPP Editor Lora Murphy 07920 787221 | lora.murphy@cipp.org.uk Advertising Daniel Cull 07795 652645 | advertising@cipp.org.uk Design James Bartlett and Nicole Davis design@cipp.org.uk Printing Acorn Press Ltd
message
Halloween is nearly upon us, and the nights are drawing in with autumn leaves and the buzz of children well back into school. It’s six months since I took over as chair for the CIPP and it’s been an exciting challenge and adventure, as well as my honour and privilege to serve our members.
Do you get spooked easily, as the night of the ghosts and ghouls looms? Well, sometimes it’s the ever-changing face of technology which really spooks us, and payroll has seen lots of changes over the past few years. The only one sure thing in life is change, and we can see more on the way with pensions dashboards, the basic pay as you earn tool and personal tax accounts to name a few. The software developers are normally the first to get involved with changes, developing and enhancing systems to help payroll professionals stay within regulations and to pay employees accurately and on time. We still have more events at the CIPP until the end of the year, so I hope to see as many of you as possible at our Annual Conference and Exhibition (ACE), and then the prestigious Graduation ceremony at the end of November. Please come and say hello if you see me.
Clare Warrington MSc FCIPPdip AFHEA (clare.warrington@cipp.org.uk) Chair, CIPP
Useful contacts
CEO’s
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
message I do hope you’re reading this and anticipating ACE, which is now only moments away. I’m looking forward to catching up with as many of you as possible at the event. Please do say hi and introduce yourself, I look forward to sharing stories.
How quickly the months move on, already now in Autumn with the heat of summer a distant memory. For those finalising last month’s returns, and submitting reports to pensions and other providers, it’s quite a realisation that we’re now six months into the tax year and moving into the second half. Thank you to everyone who has contributed, and those who will contribute, to our #BePayroll series of articles. It’s so informative to read of the many different paths that have led us to payroll and pensions careers, and the different experiences we’ve all had. If you haven’t already thought of contributing, please do reflect on your own journey and look to share with others. I’m sure, like me, everyone will take something from your story. National Payroll Week was another huge success, and it was wonderful to meet with those early in their career during the breakfast briefing within that week, as well as meeting up with those further along their career journey at the Sky Garden event. Thanks to all of you for your contributions and for helping us to promote the industry. This issue is all about technology, and how that moves at such a pace. It’s important to keep abreast of developments for your own considerations of what might be next to support your employer or the businesses you serve. ACE also provides that opportunity, where you can discuss with product providers at the exhibition what’s next on their technology roadmap. Who knows where the future will take us.
0121 712 1013 cipp.org.uk @CIPP_UK
Articles 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. 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 2023. 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.
Jason Davenport MCIPP MIoD (jason.davenport@cipp.org.uk) Chief executive officer, CIPP
| Professional in Payroll, Pensions and Reward | October 2023 | Issue 94 2
in Payroll, Pensions & Reward PROFESSI NAL
Contents October 2023
REGULARS
FEATURES
When is a positive a negative? By Jeni Morris
Understanding the relationship between your payroll software provider and the government By Jason Sweby The HMRC tax account: this time it’s personal By Samantha O’Sullivan Empowering financial stability: The Code of Practice for earned wage access By Zoe Pope
01 Editor’s comment 02 CEO’s and chair’s message 04 CIPP update News and developments 05 My CIPP Events horizon, On your behalf, Spotlight on…, Payroll news, Industry News, Advisory Q&As, National Payroll Week 13 Personal development BePayroll
17
15
HMRC loss at tax tribunal over P11D dispensation row By Justine Riccomini
20
18
Recognising the beauty of ambiguity behind de minimis fringe benefits By Kevin A Valuet
21
22
online exclusive content
Advertorial: How to progress your career in payroll By Christina Holloway
Don’t let your imposter monster drag you down By Jenny Devonshire
30
28
15 Compliance
From P11D dispensations to personal tax accounts
Keeping the grass greener on your side of the fence By Jeanette Wheeler
50 years in payroll By Graham Lee
32
24 30
33
Feature topic Read all about the theme of the current issue
online exclusive content
online exclusive content
Reward All the latest in employment law, and a look at how to overcome that dreaded imposter monster
Automating payroll to create the space to grow By Steven Watmore New study explores how to safely automatically enrol low earners into a workplace pension By Nigel Peaple Employment status, enhanced redundancy payments and extension of termination dates By Nicola Mullineux
Harassment – are employers aware of the less obvious forms of harassment? By Danny Done
36
38
40 Pensions
Updates from the Pensions and Lifetime Savings Association and discussion of the Local Government Pension Scheme
Let’s talk LGPS By Jim Woodlingfield LGPS
40
42
45 Technology
This issue, we’re all about technology. Hear from our experts on how they feel it has benefitted the payroll industry
Changing / choosing payroll software doesn’t have to be a minefield By Karen Thomson
46
48
60 Hot topic
online exclusive content
online exclusive content
Discussion of why we should embrace technology, and not be spooked by it!
Hot topic – embracing technology By Neil Tonks
62 Payroll pets
60
We say hello to some of your furry friends
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| Professional in Payroll, Pensions and Reward |
Issue 94 | October 2023
CIPP update
Jason and Ken attend the South African Payroll Association Conference ON 7 SEPTEMBER 2023, our past chief executive officer (CEO), Ken Pullar and current CEO, Jason Davenport travelled to Johannesburg for the South African Payroll Association (SAPA) 2023 conference. The theme was ‘ Celebrating the heritage of payroll: yesterday, today and tomorrow’ . Ken and Jason networked with delegates who had travelled from all over the world, and Jason hosted a CIPP update, in which he discussed all things UK payroll, pensions and reward. We were also delighted to be diamond sponsor for the event and would like to thank SAPA for hosting such a great and knowledgeable event.
New interactive ‘understanding your payslip’ tool launched EMPLOYEES MUST receive a payslip from their employer detailing the amount of pay they’ve received, and any deductions taken. Payslips come in all different forms, whether they’re sent through the post in an envelope, password protected and sent to your inbox or accessed via a secure digital portal. Regardless of how employees receive their payslips, some may want more detail around what the elements of pay mean. The CIPP has a new interactive ‘understanding your payslip’ tool, which cuts the jargon that can baffle people looking at their payslips. Please find it here: https:// ow.ly/nF0w50PP9yx This is a publicly available tool, so please spread the word far and wide to enable employees to fully understand their payslips.
Careers area launched on CIPP website WE’RE DELIGHTED to launch our new payroll careers pages, where you can find guidance on the different paths through payroll, including: l where to find jobs l the types of jobs available in and around payroll l helpful resources to help you progress through your career. You can also take our short quiz. Once completed, it will provide options when starting your payroll career or changing your career path, and it will also recommend membership, training and qualifications, assisting you in your learning and development. Recommend the pages to your colleagues and team, if they need some support on their next career step.To view the page, head over to: https://ow.ly/jwRV50PMKMz.
4 | Professional in Payroll, Pensions and Reward | October 2023 | Issue 94
ONLINE LEARNING
Scan to book
Payroll for non-payroll professionals
Event horizon Your guide to upcoming events and training
Duration Two consecutive half days
This course gives a high-level overview of on the day-to-day obligations of the payroll function, including the fundamentals of payroll, statutory and voluntary payments, and deductions.
Full details of events and training courses can be found at cipp.org.uk/events or you can email info@cipp.org.uk for more information.
The Annual Conference and Exhibition (ACE) and Annual Excellence Awards October is synonymous with ACE and the Annual Excellence
Training courses Take a look at some of our upcoming training courses below. Those that are taking place face-to-face are highlighted.. Please note, there are other dates and locations and training courses available. Please visit http://ow.ly/iVfT50MU7yr. Awards for us here at the CIPP. You may be reading this issue of the magazine ahead of, during or after the event. One thing’s for sure, 2023 is going to be bigger and better than ever! Ensure you catch up on all the photos, highlights and sessions from the two days, in our special supplement, available alongside November’s issue of Professional magazine.
Visit cipp.org.uk/training to book your place
Course
Date
Location
Foundations of payroll analytics
06 November
Online
23 October
Birmingham
Global mobility key payroll issues
23 November
Online
06 November
Online
P11D expenses and benefits
04 December
Online
23 October
Online
13 November
Online
27 November
Manchester
Introduction to payroll
04 December
Online
11 December
Online
13 December
Birmingham
10 November
Online
Off payroll working and other employment status considerations
Non-member price: £495 + VAT Member price: £395 + VAT
21 December
Online
20 October
Birmingham
02 November
London
Scan to book
23 November
Online
Payroll update
01 December
Manchester
14 December
Online
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| Professional in Payroll, Pensions and Reward |
Issue 94 | October 2023
POLICY HUB
On your behalf
The month of September had noticeably shorter days. However, that didn’t impact the volume of work for the CIPP’s policy and research team . The team was working around the clock last month and we have the various activities and events covered for you below... Policy team update
Events The month started on a high, with celebrations for National Payroll Week (NPW) running from 4-8 September 2023. This was a chance for the payroll and wider community to come together as one and honour all things payroll in true CIPP style. The whole team hosted and facilitated events which took place throughout the week, and we can proudly say it’s been another successful year. Celebrations continued with policy lead, Samantha O’Sullivan attending the Pensions and Lifetime Savings Association’s (PLSA’s) parliamentary evening reception. This was an evening for professionals to network and to celebrate 100 years of the PLSA supporting workplace pensions. Policy and research officer, Meena Salhan attended the DeHavilland online event, ‘Labour briefing: personnel, policy and politics’. The event explored best practice tips for engaging with labour, both in opposition and in government. This session covered a range of topics, including questions such as: l who is Keir Starmer, who are the people around him and what do they care about? l what will labour seek to do in government and how will they go about doing it? l what are the best ways to engage with and influence the Starmer operation? Meena also took part in the ‘Nest Insight: Supporting workplace emergency saving at scale in the UK ’ roundtable discussion. This discussion concerned how to scale workplace emergency savings in the UK and was supported by the Money and Pensions Service (MaPS). A broad range of views from expert stakeholders were put forward, raising questions to be addressed next and identifying priorities for future industry and policy debate.
Consultations and calls for evidence
Policy and research officer, Mathew Akrigg presented at the Penfold and AccountingWEB webinar. Mathew was part of a panel discussing automatic enrolment and how payroll professionals and accountants can save time with processing. Mathew also represented the CIPP at an HM Revenue and Customs (HMRC) ‘ Timeliness of response masterclass ’ and delivered an overview of compliance action from the payroll professional’s view to a wave of new employees at HMRC in the compliance division. Questions such as what payroll professionals need, how they should be handled and what to consider were also covered. Mathew then hosted a CIPP payroll services specialist interest group event, delivering a session about recent consultations and their impacts on processes. Alongside him were speakers: l Julie Northover from PayPartner, who discussed holiday pay and entitlement, and what you can do to get it right l Cybil Watkins from Zellis, who shared her knowledge and experience on neurodiversity in the workplace, to get the best out of people who think differently. On 14 September, our editor, Lora Murphy travelled to London to deliver an update on future changes for payroll professionals to keep on their radars, as part of an amazing OneSource Virtual event. The session covered a whole host of items, ranging from new National Insurance category letters for investment zones to be introduced from April 2024 to potential changes to holiday pay and entitlement calculations. Following the presentation, Lora had the opportunity to chat to those working in operational payroll and to discuss what’s working well and what isn’t working so well in the industry.
Are we there yet? Our honest answer is… we don’t know. The policy team has submitted the below consultation responses in September, and there could still be plenty more in store: l Tackling non-compliance in the umbrella company market l Helping savers understand their pension choices l Ending the proliferation of deferred small pension pots l Labour market enforcement strategy 2024 to 2025: call for evidence. Remember, members can view the CIPP’s formal responses in the policy hub on the CIPP website: https://ow.ly/UpF850PJi2w. You can also share your thoughts and comments on consultations we’re responding to using the ‘Have your say’ section on our webpage, here: https:// ow.ly/wtPj50PJi3K. Please remember to add the title of the subject your comment relates to. “ACE ACE, baby…” Can you believe it’s that time of year again? The CIPP's Annual Conference and Exhibition (ACE) will be taking place on 4 and 5 October 2023. This event provides an invaluable opportunity for professionals to educate, collaborate and celebrate all things payroll, pensions and reward. Something the CIPP certainly doesn’t shy away from. The conference is the biggest independent payroll conference and exhibition in the UK and is the place to learn and get updates on key issues, grow your personal network and celebrate excellence in the profession. n
| Professional in Payroll, Pensions and Reward | October 2023 | Issue 94 6
MY CIPP
Spotlight on...
Jason Davenport MCIPP MioD Chief executive officer (CEO)
Tell us a little about your career and background so far. It was while delivering in-house payrolls within construction that I decided I wanted to grow my payroll career, and move into outsourcing to gain more experience within a variety of industries. CMG provided that grounding for me. Taking on payroll outsourcing contracts in a variety of industries such as financial services, oil, gas and many more provided a much broader understanding of the different complexities within payroll. I then joined their management development prorgramme, which, for 12 months, provided a fantastic grounding in people, project, sales and contract management, as well as financial control, contract negotiations and all aspects / challenges of running your own business. Becoming an associate director with CMG then gave me the opportunity to take on international work. Soon after that followed my move to NorthgateArinso as an operations director to: l support their global payroll growth plans l develop service delivery contracts with clients who followed the sun in terms of global support and services. It was also at this time (working alongside what was then the IPP) that Chris Williams, one of the founding members of the Institute, encouraged me to stand for board. Becoming a non-executive director added a new set of skills and provided additional experience, which has proved essential when I look back at my career. You’ve recently joined the CIPP as the new CEO, what are you most looking forward to in this role? Building on the foundations in place. For any organisation, it’s important not to rest on your laurels. Ensuring progress is maintained in all that we do. Covid-19 forced a pivot towards
online and remote delivery models, and this will now become an expected delivery model for many. This is great, as it allows a lot of individuals who previously may not have joined training courses due to location or travel implications to gain access to education. It also means all the hard work undertaken by the instructional designers to create digital-first content was the correct strategy to follow pre-Covid. However, there’s still a place for face-to-face learning. Universities expect it as part of the learning approach and many still get so much from sharing and reviewing progress in a traditional classroom setting. Investment in the education portfolio review is well underway across all our payroll, pensions and reward offerings, and this was a long-term strategy set in motion some years ago, to deliver across many years to come. As a membership organisation, it’s essential we’re delivering what our members want and need, which is why we continually seek feedback and opinions on a whole variety of matters impacting the industry. The special interest groups are a great way of bringing that all together in one place, so they’ll continue to grow and develop. Reviewing member benefits and ensuring what’s offered is of value is also essential. I continued to use my payroll reference books recently as I ran my own consultancy business. The Advisory Service and Professional magazine are two great sources of information, which alongside News Online and other available resources, we’ll continue to invest in and develop for the benefit of the membership and the industry. You’ve worked in the payroll industry for most of your career. How do you think the payroll profession has changed during that time?
I’ve worked in the industry since the pre- computing days of manual calculations, carbonised paper and writing out payslips by hand, filling them with notes and coins. So, the move from mainframe to wide area network servers to cloud computing has all happened during that time. Now of course, alongside global delivery capability, there’s artificial intelligence to consider and how that will impact future delivery models within the industry. Within all this time, I’ve witnessed a greater desire for information sharing, working together and collaboration across businesses, industries and countries. Data privacy and security is foremost in consideration now in an ever-digital age, and payroll, pensions and reward has always had a part to play in ensuring data is managed correctly and appropriately. What does the future hold for the CIPP? The CIPP is recognised as the foremost professional body supporting the industry in the UK. To stay that way, we’ll continue working with partner organisations in the UK and alongside international associations, such as the Global Payroll Assosication and other Institutes across the globe. We’ll continue to review our offering to individuals and businesses. To stay relevant, it’s important to ensure new entrants to the industry are aware of the support to be gained via the Institute, and that businesses are aware of the standards that can be shared, plus the benefits of having fully qualified payroll practitioners in their organisation. I’m extremely proud and excited to now be leading the profession for this next period of growth, and recognise that as CEO of a Chartered body, my time and legacy will be proven by handing over a successful business to my future successor. n
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| Professional in Payroll, Pensions and Reward |
Issue 94 | October 2023
PAYROLL news
Salary advances consultation HM REVENUE and Customs (HMRC) has published a consultation seeking views on a set of draft regulations. There are two regulation amendments proposed: one is for income tax and the other is for social security (National Insurance). This consultation is due to close on 9 October 2023. Under current rules, salary advances must be reported to HMRC via real time information (RTI) when they’re processed, and the usual contractual payment then also reported. The proposed changes will amend this requirement so that only the main, contractual payment needs to be reported in full. The reasons for this are cited as: l reducing administrative burden l lowering the number of RTI submissions required l assisting HMRC with processes such as pay as you earn (PAYE) coding and universal credit errors. The consultation can be found here: https://ow.ly/Mlah50PNKjp, and information relating to this which was included in HMRC’s February Employer Bulletin can be located here: https://ow.ly/bXQ450PNKu9. We have a fiscal statement date! CHANCELLOR OF the Exchequer, Jeremy Hunt, announced he will be presenting the autumn statement to Parliament on 22 November 2023. The Office for Budget Responsibility has been commissioned to prepare an economic and fiscal forecast to be presented to Parliament alongside the statement. This will follow the King’s speech, which will take place on 7 November 2023. The CIPP’s policy team is committed to bringing you live, up to date coverage of any fiscal statements, and will be analysing the impacts on the payroll profession. Make sure you keep an eye out! Baroness Altmann said: ‘‘This Bill reflects the strong cross-party support in both Houses and continued political consensus on auto- enrolment. In that regard, I thank the noble Baronesses, Lady Sherlock and Lady Drake, whose work on the Pensions Commission recommended automatic enrolment, and the noble Lords, Lord Davies and Lord Palmer, for their speeches supporting the Bill, which paves the way for half a million younger people and at least 2.5 million older workers to build bigger pensions, particularly for the low paid. I look forward to the promised early consultation to confirm the details and timing of the regulations, which will see the provisions of the Bill implemented by all employers.’’ Pensions Bill receives Royal Assent THE PENSIONS (Extension of Automatic Enrolment) (No. 2) Bill has become an Act of Parliament (law), by gaining Royal Assent on 18 September 2023. The Bill can be viewed here: https://ow.ly/Fg9q50PNKyG. The Bill permits two extensions to automatic enrolment – abolishing the lower earnings limit (LEL) for contributions and reducing the age for being automatically enrolled to 18 years old. It has been reported that millions of people, including low earners and younger workers, will be helped to save more into their pension and look after their financial futures.
Diary dates
The CIPP’s Annual Conference and Exhibition
4 and 5 October
5 October 6 October
Last day of tax month 6 First day of tax month 7
Last day for submitting a real time information employer payment summary to apply to tax month 5 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method Deadline for payment of PAYE and NICs under a PAYE Settlement Agreement (PSA) by non-electronic method
19 October
22 October (this is a weekend date)
Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method Deadline for payment of PAYE and NICs under a PSA by electronic method
5 November 6 November
Last day of tax month 7 Last day of tax month 8
| Professional in Payroll, Pensions and Reward | October 2023 | Issue 94 8
INDUSTRY news
JGA Recruitment Group announces milestones: US expansion, enhanced website and new team members Expanding horizons: introducing JGA Recruitment Inc. in the United States JGA Recruitment Group, renowned for its exceptional payroll and human resource (HR) talent acquisition services in the UK, proudly extends its footprint to the United States. Operating under the banner of JGA Recruitment Inc., we bring a wealth of expertise in global payroll and HR technology talent to meet the dynamic needs of the American market. You can view our US website at https://ow.ly/ gQcw50PNH1i. Under the leadership of chief executive officer (CEO), Nick Day and senior Vice President (SVP), Tom Croughton, our teams in Delaware, Tampa and Austin are poised to cater to clients across all 50 states, exemplifying our mission to provide a recruitment service which cuts through the noise to transcend expectations. Tom Croughton, SVP said: “We’re excited about the opportunity of bringing our vast experience and proven track record in global payroll and HR technology recruitment in the UK and EMEA to the USA. As the first dedicated payroll specialist agency to set foot on American soil, we're eager to channel our proven expertise towards reshaping the payroll and HR talent acquisition landscape in the USA." Empowering success through diversity and ethical standards At JGA Recruitment, we believe in more than just connecting talent with opportunities; we believe in forging lasting relationships. Our commitment to sustainability, diversity, inclusion and ethical standards forms the bedrock of our approach. We believe in driving growth through accountability, transparent communication and trust, ensuring a sustainable and ethical path to success for our clients and candidates alike.
Launching a revitalised website to enhance the client and candidate experience In our relentless pursuit of excellence, we’re also thrilled to announce we’ll be unveiling our new and improved website at the beginning of October. The new platform will offer an array of enriching resources for both payroll and HR professionals. With a user-friendly interface, we hope to deliver a seamless experience for clients and candidates, further elevating our commitment to raising the profile of both industries. Due for launch on 2 October 2023 at: https://ow.ly/ btT550PNH2K. Welcoming new talent to the JGA recruitment family As demand for our niche payroll and HR recruitment services continues to surge, so does our family of dedicated search professionals. We’re pleased to introduce the newest members of our team: Alina Melkenbeek, accounts and credit controller (UK) Aaron Jupp, recruitment resourcer (UK) Sam Cainer, recruitment consultant (UK) Tom Verrent, senior sonsultant (UK) Charlotte Paterson-Croughton, senior consultant (US) Denise Hurley, senior consultant (US). Nick Day, CEO at JGA Recruitment Group said: “We’re excited to announce these latest developments as we continue to grow and expand our specialist payroll and HR talent search services in the UK, EMEA and the USA. We’re looking forward to embracing new challenges and setting higher standards as we embark on the next chapter of our exciting journey. We hope these announcements continue to support our goal of improving and reshaping the landscape of payroll and HR talent acquisition, one success story at a time.”
Papaya Global becomes first ever payroll and payments company in the TIME100 2023 Most Influential Companies List Papaya Global, the global payroll and payments company, has been named as one of TIME100’s most influential companies in the world for 2023. Papaya Global is recognised for its innovation which fundamentally changes payroll, with the understanding that payroll has a significant impact on individuals and on the global economy. Papaya's technology enables an automated and unified payroll and payments process, seamless artificial intelligence-powered integrations across critical tools for enterprises and direct payments to global workers. Papaya was built with the mission to move payroll to the forefront of the employer-employee relationship, and to
democratise payroll by elevating it from a mere ‘technical process’ to a process which enables financial-first thinking for individuals. This innovative approach provides better access to funds and supports bigger, better financial decisions (such as savings and loans) through payroll. "Payroll is the most important process in any organisation, and it deserves the best technology and attention,” said Eynat Guez, CEO and co-founder of Papaya Global. “TIME100’s recognition is a validation of our vision to provide our customers with control, compliance and transparency of their workforce worldwide." The TIME100’s Most Influential Companies List is compiled by TIME’s global network of editors and industry experts, who evaluate nominations from various sectors, including technology, finance, healthcare and entertainment. The final list features 100
businesses driving change and charting the path forward. This distinguished recognition is the latest of many accolades for Papaya Global, which include: l Forbes Cloud 100 l CNBC's Top Startups for the Enterprise l Fast Company’s Annual List of the World’s Most Innovative Companies for 2023.
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| Professional in Payroll, Pensions and Reward |
Issue 94 | October 2023
MY CIPP
How do you treat e-vouchers and NI purposes?
The CIPP’s Advisory Service team provides answers to popular questions
Tax treatment of payments made where an employee stays with a friend or family member Q: When an employee stays at a friend or relative’s house instead of a hotel, the employer makes a fixed payment to the employee per night. What’s the correct tax treatment of this? A: Since the abolition of dispensations, there’s no scale rate or benchmark rate available for overnight stays at a friend or family member’s house. Instead, any payment to reflect such a stay (that isn’t to reimburse a directly incurred expense) is considered a round sum allowance and is wholly liable to pay as you earn (PAYE) income tax and class 1 National Insurance contributions (NICs). The following link corroborates this: https://ow.ly/Hc8I50PK3sK.
would attract liability to income tax and class 1 NICs. You can account for the tax due by processing them through the payroll as you have outlined, but only if the organisation has registered to payroll this benefit category before the commencement of the relevant tax year. As you’ve indicated this registration hasn’t been undertaken, the vouchers would have to be reported on a P11D under section C. The NICs meanwhile, must be accounted for through the payroll, regardless of whether the organisation has registered to payroll the benefit. In the pay period(s) a voucher is gained by an employee, an element should be added to their pay which is NICable, but not taxable, pensionable or affecting gross pay. A possible alternative could be to add these vouchers under a PAYE settlement agreement (PSA). It might be worth highlighting this option to your client. Apprentices and the national minimum wage (NMW) Q: A new employee joined our organisation on 15 May 2023, with the job title of apprentice finance administrator. They haven’t signed an apprenticeship agreement and aren’t due to be enrolled on to their college course until September 2023. It hasn’t been reported via payroll that they’re on an apprenticeship. Should we be paying them at the apprenticeship NMW rate or at the standard rate for their age? A: The apprenticeship rate can only apply from the pay reference period in which the person starts their apprenticeship. If they’ve been hired earlier than this, the rate to apply will be based on the minimum wage rate for their age bracket. Once they start their apprenticeship, they need to sign the apprentice contract of employment, and for the first year, they could be paid the apprentice rate or the age-related rate (this is the employer’s choice). However, for the second year of the apprenticeship onwards, the apprentice rate won’t apply, and they’d need to be paid the minimum wage rate based on their age banding.
What happens to SMP where there’s a TUPE transfer?
Treatment of statutory maternity pay (SMP) in Transfer of Undertakings (Protection of Employment) (TUPE) scenarios Q: We’ve taken over a new business and its employees are being transferred to us under the TUPE Regulations. One of the employees is currently on maternity leave and in receipt of SMP. Can you confirm whether the new employer should take over payment of the SMP to the employee? A: If this is a true TUPE situation, this won’t affect SMP. In TUPE arrangements, the employee moves to the new employer’s payroll, but nothing should change for the employee; it should be like they haven’t moved employer. So, the new employer takes over where the old employer left off, paying SMP to the employee to ensure payments continue seamlessly. The employee may be transferred onto a new payroll, but their SMP payments will not be affected. See here for further details: https://ow.ly/wrLm50PK8p0. Can you reinstate a previously cancelled employer PAYE scheme? Q: One of my clients ceased her payroll scheme in September 2022 as she was decreasing her workload in preparation for retirement. Her business has recently taken off again, so she wants to re- register as an employer. Does she need to apply for a new scheme or is there a way of reinstating her previous scheme? A: We would refer you to the following guidance from HM Revenue and Customs (HMRC): https://ow.ly/obX350PK6wU. This states:
How do you treat e-vouchers for tax and NI purposes?
Tax and NIC treatment when providing e-vouchers Q: Our client’s employees collect points and can trade them for e-vouchers from different stores such as Amazon, Adidas, Mango and Ikea. We’ve been advised to add this to payroll for tax purposes and then deduct the net value so that tax is calculated but employee pay doesn’t increase. There’s no mention of NICs. Isn’t the correct process to ensure that non-cash vouchers are reported on P11Ds for tax, but NICs are deducted in real time through the payroll? The employer isn’t registered to payroll benefits, hence the P11D requirement. I don’t think the NICs exemption applies to those vouchers. Is this right? A: Non-cash vouchers such as these
| Professional in Payroll, Pensions and Reward | October 2023 | Issue 94 10
ONLINE LEARNING
POLICY HUB
Learn how to process a number of common termination packages correctly, from redundancies to contractual breaches, retirement and death-in-service. Termination payments
“It is possible to reopen an employer record which was previously cancelled. From 6 April 2011 an employer record can only be reopened in the year the record was originally cancelled or in the following year. This can happen when l A business has now started to trade l A record was cancelled in error l A business now has employees liable to Income Tax and / or National Insurance. When an employer record is re-opened, the computer will automatically remove the previous cancellation date.” The CIPP is aware this can take up to 72 hours, but members have reported that their requests to reopen an employer record have been successful.
What are the tax implications of allowing employees to charge their cars at the office?
work (for a period of over 56 days) and is now sick again. Are they eligible for SSP for another 28 weeks? A: I can confirm that if the employee has returned to work for more than eight weeks, the new absence is not linked, so yes, they would be entitled to 28 weeks of SSP again. Charging electrical vehicles at the office Q: There are several employees who have electric company cars. If the employees charge their cars at the office location, is this a benefit in kind (BiK) and would it need to be reported on a P11D? A: I can confirm that if the employer allows the employees to charge company electric cars at work, there’s no reportable BiK. It’s important to note, however, that this is the current situation, which could potentially change at some point in the future. This is one of several relaxations in place to encourage the take-up of electric vehicles. Do payslips need to be issued even when there’s no pay data to report? Q: Do we need to provide payslips to all employees, even if there’s been no activity that pay period (nil pay), or for zero hours workers who haven’t worked? A: HMRC guidance states: “Your payslip must show: l your earnings before and after any deductions l the amount of any deductions that may change each time you’re paid, for example tax and National Insurance l the number of hours you worked if your pay varies depending on time worked. Employers must also explain any deductions fixed in amount, for example, repayment of a season ticket loan. They can choose to do this either on a payslip, or in a separate written statement.” If there are no earnings or deductions, there’s no requirement to issue a payslip. The guidance noted can be found here: https://ow.ly/Hg4650PK7sc. n
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How do you treat e-vouchers for tax and NI purposes?
CPD 3 points
Is there a specific way to pro rata salary calculations?
The correct way to pro rata salary calculations Q: Our client has a new employee who’s questioning the pro rata salary calculation used. We use 260 days per annum for the day rate rather than deducting days not worked. Do you have anything to show that this is the correct way to calculate pro rata salaries? A: The 260 method is one regularly used in practice. We’d advise that any method of calculation should be in the company handbook or company policies, but there’s nothing in guidance from HMRC. If the company’s policies and employment contracts are silent, then using a 365 divisor is the only lawfully accepted method for pro rating. The company should seek employment law advice when writing new policies regarding apportionment of salary. The following link to the Apportionment Act (1870) states that salaries need to be divided by 365 (if not otherwise stated in the employment contract). The day-to-day apportionment is specified in Regulation 2: https://ow.ly/VneS50PK6PL. Entitlement to statutory sick pay (SSP) Q: An employee was off sick for 28 weeks and in receipt of SSP, then came back to
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| Professional in Payroll, Pensions and Reward |
Issue 94 | October 2023
NATIONAL PAYROLL WEEK 2023 Full coverage coming in November 2023 issue
Remember you can watch all the free webinars from the week at npw.org.uk
Payroll Technician Certificate ADVANCED The CIPP’s Payroll Technician Certificate meets the industry’s rapidly evolving requirements for knowledgeable payroll administrators.
The Advanced certificate contains the same content as our excellent Payroll Technician Certificate, but includes three extra modules covering the following areas:
● data protection and audit considerations ● automatic enrolment and pension principles ● administering salary sacrifice for payroll.
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Visit www.cipp.org.uk/PTCA for full details and to enrol today
| Professional in Payroll, Pensions and Reward | October 2023 | Issue 94 12
PERSONAL DEVELOPMENT
# Be Payroll Emma Watson MCIPP, payroll and human resources (HR) manager at AWS Accountancy Limited, shares her experiences of studying with the CIPP
What course(s) have you studied / are you currently studying? I achieved my Payroll Technician Certificate (PTC) in 2018 through the CIPP. I then moved on to gain a HR support qualification in 2020 through a local college. In 2021, I completed the Foundation Degree access course with the CIPP to begin studying for the Foundation Degree in Payroll Management, which I’ve recently completed. How would you describe your experience of studying with the CIPP? It has been a very positive experience. My course was mainly online due to Covid-19. However, the module workshops and tutorials were extremely helpful, and were structured to assist you with writing your assignments. The study material was also useful and accurate, and I aimed to read this before entering the module workshops so I understood topics before they were discussed as a group. The tutors throughout the course were fantastic – they would ensure all questions were answered in the module workshops and tutorials before moving on to the next topic, so you left the sessions feeling assured. They were also only a phone call / message away if you needed assistance. Can you describe your payroll career / journey to us so far? In 2016, I left my role in science with no back-up plan. A job role came up at a local accountant for a payroll junior with on-the-job training. I’d always been good at maths at school so thought I’d have a good chance at succeeding in the role. To begin with, I was shadowing the payroll manager, learning about tax / tax codes and National Insurance. I quickly learnt that payroll wasn’t just about maths. It was about good communication skills with both the team and clients. It was about hitting deadlines and being the first port of call for clients when they received correspondence from HM Revenue and Customs (HMRC) and The Pensions Regulator (TPR). After a year of training and watching webinars by HMRC and TPR, I decided I wanted to gain qualifications in payroll. They would be valuable for personal growth and would give clients and managers confidence I was qualified in what I was doing. I began Googling available payroll qualifications and the CIPP popped up at the top of my search. After meetings with the directors, it was agreed that I was to begin the PTC with CIPP. It was here that I gave myself a goal: I wanted to have as many qualifications as possible, especially while I was still young and in the studying mindset.
After completing my PTC, I moved onto a HR qualification through a local college. We received many queries through payroll regarding contractual issues, such as holiday entitlement and redundancy payments, so gaining more knowledge in these areas would allow me to provide more accurate answers to clients. In 2021, I decided it was time to knuckle down and begin the Foundation Degree in Payroll Management. It was something I’d always wanted to achieve but the word ‘degree’ scared me, especially knowing it would be alongside my full time role. In April 2021, when the furlough calculations finally started to calm down, I decided I’d complete the access course to the Foundation Degree to begin year two in September 2021. I’ve recently completed the Foundation Degree in Payroll Management and can’t wait for the graduation in November. Do you have any plans for further study with us? If so, what are they and why? For now, I’m taking a break from courses but keeping my knowledge up to date with the CIPP’s Professional magazine and webinars. If I’m to study further, I’d be looking into a pension course through the CIPP, so I’d be qualified in payroll, HR and pensions. What advice do you have for anyone thinking of studying a qualification with us? I’d say if the option is there to complete a course though the CIPP, to take it! You’re not only expanding your payroll knowledge, but you’re also gaining invaluable skills to take with you through your work journey. It may seem intimidating committing to a course, but if you remain positive, organised and in touch with your tutors, you’ll have all the materials you need to complete your qualification. How do you feel about working in payroll? What does working in payroll mean to you? I’m proud to work in payroll. I’m keen to promote payroll and help it gain the recognition it deserves. When starting out, I was told payroll is mainly colouring in with highlighters. Covid-19 and furlough calculations certainly shifted this opinion and I’m excited to see the growth of the industry. I enjoy helping people. So, to be able to carry out manual calculations which help people understand their pay is a reward. To be the person clients can trust and rely on with their needs is the most important part of the role, as you’re using your knowledge to reassure people on important business matters. n
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| Professional in Payroll, Pensions and Reward |
Issue 94 | October 2023
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