in Payroll, Pensions & Reward PROFESSI NAL Official publication of The Chartered Institute of Payroll Professionals Issue 88 March 2023
P
e
My payroll pathway A selection of articles discussing the wide range of payroll careers on offer
The devolution revolution
Entitlement evolution? Read all about the consultation, which could change holiday entitlement calculations
What does devolution mean for businesses and employees?
CIPP UPDATE POLICY HUB PERSONAL DEVELOPMENT
cipp.org.uk
Payroll Outsourcing Services Accurate, Compliant and Secure
01276 456902 sales@frontiersoftware.com www.frontiersoftware.com
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So, reach for the stars, climb every mountain higher S Club 7
Editor’s
comment
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Yes, I’ve finally reached life’s pinnacle – I’ve managed to squeeze an S Club 7 quote into the magazine. The 12-year- old me wouldn’t have ever thought this possible! All jokes aside, the quote is completely
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apt and fitting for this month’s issue of Professional magazine, which centres on the topic
of payroll careers. The sky really is the limit in this industry, and the pages of this magazine explore and celebrate the multitude of diverse career paths and options there are available today. Ensure you read about the stories of others in the industry, located in the Rewards section of the magazine, so you can see the plethora of career paths there are in payroll, whether that be within the public sector (page 39) or exploring what alternatives there are to the payroll manager route (page 40). Additionally, our feature topic, on page 28, includes discussion of the vast array of roles there are to choose from. Unless you’ve been living under a rock, you’ll also be aware there’s been some big movement in the holiday entitlement arena. Our hot topic article, on page 54, gives a rundown of all the information you need to know and what could potentially be changing, so be sure to check it out. Another area of interest for payroll professionals is that of national minimum wage, so hear about HM Revenue and Customs’ new enforcement approach in this space, on page 21. On the horizon, we have the spring budget, due to be delivered by Jeremy Hunt on 15 March, so be sure to keep your eyes peeled for updates on News Online and across social media. We’ll also be bringing you the latest in the April issue of Professional magazine, of course.
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Lora Murphy ACIPP (editor@cipp.org.uk) Editor
21 - Location, location, location – a new enforcement approach By Jeni Morris
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28 - Feature – payroll careers By Jerome Smail
39 - Public sector payroll By Jim Woodlingfield
40 - When payroll manager isn’t the only option... By Katie Sharpe
54 - Hot topic – what next for holiday entitlement? By Mathew Akrigg
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| Professional in Payroll, Pensions and Reward |
Issue 88 | March 2023
Chair’s
Editor Lora Murphy 0121 712 1018 | 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
This is my last message to you as chair before Clare Warrington takes over from April onwards, for which I wish her well. To this end, it’s quite fitting that the focus of this issue is on payroll careers. My own payroll career has been quite diverse and has taken me around the UK and overseas, meeting a variety of different organisations and payroll professionals.
I believe anyone in payroll should know how to calculate tax, National Insurance contributions and statutory payments manually. They can build upon this for their chosen career direction, and there’s now a greater choice of Level 3 learning to start from. The direction of your payroll career will determine the direction of your learning. When you consider that every organisation in every industry, regardless of how big or small it is, is required to pay its employees, it’s not surprising that a payroll professional’s career can be exciting, varied and far-reaching. Careers are also evolving with the rapid growth of robotics, changing the way we work. You could be in a team processing payroll or leading a team. Or, you could be a payroll strategist, data analyst, implementation consultant, director of payroll or product developer. If you’re in your dream job, have advice for newcomers to the profession or have had a varied payroll career path you would be happy to share, please do contact us.
Chief executive officer Ken Pullar FCIPP CIPP board of directors Louise Gray ChMCIPPdip Stuart Hall MCIPPdip
Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA(Hons) FCIPP Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP Katie Sharpe MCIPPdip Cliff Vidgeon BA(Hons) CMA ACG ChFCIPP Clare Warrington MSc FCIPPdip AFHEA
Liz Lay MSc FCIPPdip FHEA ACIPD (liz.lay@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 Here we are, well into the new year – time as usual rapidly flying by, approaching yet another tax year end. I hope all is in hand, there are no reconciliation issues for you and all goes smoothly. We recently held our trainers’ day, which we normally host annually for all our trainers. They deliver training the depth and breadth of the country on many educational and practical topics. Led by Jill Smith (head of operations) and Fiona Smith (training manager), the trainers’ day was a resounding success. CIPP trainers came together online to share best practice, network and hear an update from policy lead, Samantha O’Sullivan. Sam gave some fantastic and timely insights into all the latest changes for payroll professionals going into the next tax year. Networking online can be difficult, but the team enjoyed getting to know each other (over Teams), while enjoying the hampers that were delivered to their homes. The sessions provided some great insights through continuous professional development on how we can improve our courses and delegate experiences going into the new year. The session was so well received by attendees that we aim to organise and deliver another online event for trainers later in the year. With the working landscape so changed (office / working from home / hybrid), the challenges around the need to adapt and be flexible in a marketplace was discussed. Many organisations and individuals want greater use of flexibility and technology in how we deliver training. It was lovely to see the passion and desire to educate come across so strongly. My personal thanks also to all the trainers who work with the CIPP. Their efforts, knowledge and professionalism on behalf of the CIPP is really appreciated. And, as I say every year, we’re once again in budget territory. After last year’s tumultuous political events, I’m sure that into the next financial year there will be changes to enact, though hopefully in a calmer way than last year.
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. 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.
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
| Professional in Payroll, Pensions and Reward | March 2023 | Issue 88 2
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at cipp.org.uk
Contents March 2023
REGULARS
FEATURES
How is HMRC protecting customers claiming tax repayments? By Samantha O’Sullivan
Hybrid working across borders – should the foreign earnings exemption be
01 Editor’s comment
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expanded? By Moniza Syeda
02 Chair’s and CEO’s message
The devolution revolution By Justine Riccomini
Using the online service for managing child maintenance deductions By Andy Phillips
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04 CIPP update
Payroll: there’s more than meets the eye By Mae Kennedy
The basics of government / public sector retirement plans By Ronald L Moser
News and developments
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24
online exclusive content
05 My CIPP Spotlight on, Event horizon, Payroll news, On your behalf, Advisory Q&As 12 Personal development BePayroll
Moorepay advertorial By Moorepay
The history of the payslip: from clay to cloud – the role technology has played By Anton Roe
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26
online exclusive content
Being part of the CIPP family By Cox & Co Payroll Solutions
Building future-proof careers in accountancy
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34
and finance By Helen Livesey
14 Compliance
From the complexities of devolution to the intricacies of national minimum wage
My love for payroll By Sheryl Steele
Pre-pare for pre-paid? By Chris Ronald
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28 Feature topic
Read all about the theme of the current issue
Why I chose payroll By Jason Davenport
A focus on the payroll job market By Gemma Creamer
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44
32 Reward
Learn all about the current job market and hear unique payroll career stories
The future’s bright, the future’s payroll By Jaspal Randhawa
Dismissals and deductions By Nicola Mullineux
54 Hot topic
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46
Read all about the latest government consultation on holiday entitlement calculations
56 Payroll pets
An extra bank holiday for the King’s Coronation: what are the implications for employers? By Danny Done
We say hello to some of your furry friends
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| Professional in Payroll, Pensions and Reward | 3
Issue 88 | March 2023
CIPP update
2023 Annual General Meeting (AGM) AS YOU may have seen from our recent communications, this year’s AGM will be held face-to-face and online on Wednesday 29 March at 11.00am. This is your chance to have a say about how you’re represented at the CIPP for the year ahead, so please ensure you use your valuable vote by 29 March. The face-to-face AGM will take place at the Eastside Rooms, Birmingham and you can book * to attend, via our website: http:// ow.ly/htau50MTTv8. * Available to paid associate members and above only
AAT Parliamentary reception WE’RE DELIGHTED to have been invited to the AAT
Parliamentary reception by Sir Stephen Timms MP, to mark the launch of their seven-year strategy on the evening of 6 March. Our policy lead, Samantha O’Sullivan will be attending, to take the opportunity to speak to professionals from across the accountancy and related professions. This is with the aim of learning more about some of the current issues facing the sector and how, as the CIPP, we can support.
YOUR VOTE
THE CIPP’s Payroll Assurance Scheme (PAS) is designed to test payroll processing and compliance, along with people skills and development opportunities. One of the most crucial elements is ensuring business continuity plans are in place and effective, should they be required. Congratulations to all organisations that have achieved this accreditation and been able to put those plans into action.
Special congratulations to our recently accredited organisations: l University Hospitals Birmingham NHS Foundation Trust l Skanska UK PLC l The Chartered Institute of Payroll Professionals.
Ken Pullar, CIPP chief executive officer, said: “Congratulations to those organisations that have attained PAS accreditation. They’ve clearly demonstrated their sound payroll processes, knowledge and skills. This is imperative in the payroll profession, as reacting quickly to ever- changing legislation and guidance is crucial.” We reported in the February issue of Professional how Eque2 Limited, IRIS FMP (Cascade) (Leeds) and Anderson Anderson & Brown LLP (AAB) recently received PAS reaccreditation. Speaking about the accreditation, Richard Boston, marketing director, at Eque 2 Limited, said: “We’re delighted to again receive recognition from the PAS for our Miracle payroll software. The award is testament to the quality of our solution and the people working behind the scenes at Eque2 to make sure our software and the payroll services we provide to our customers remain best in class. The PAS accreditation provides existing Miracle customers with credible external validation that Eque2 and Miracle are best placed to continue supporting their business.” Lynn Gaunt ACIPP, regional operations manager, at IRIS Software Group, commented: “As the regional operation manager for both the FMP Cascade team and the FMP Stockton team, I feel proud to lead both teams to successfully gain the CIPP accreditations. When I received the emails to say we had passed the assessment, I was absolutely delighted. The teams worked hard to ensure we were ready to be assessed. A massive thank you to Sandra Lingwood, who undertook both assessments and gave us some important recommendations we’ll be starting to work on straight away. To be PAS accredited will put our business in a better place and show our clients (new and old) that we have the tools, payroll knowledge and skill set to be able to deliver and process any payroll given to us.” From AAB, UK payroll director, Karen Thomson MSc ChFCIPPdip FHEA, said: “AAB are delighted to achieve reaccreditation once again. Our payroll teams work extremely hard, and it’s great to know our people development and procedures are robust. This is testament to the commitment and dedication of our payroll service.”
To find out how the PAS can benefit your organisation, email compliance@cipp.org.uk
| Professional in Payroll, Pensions and Reward | 4 March 2023 | Issue 88
MY CIPP
Spotlight on...
Gemma Mullis MCIPPdip, end point assessment manager, IPP Education Limited
Tell us a little about your career and background so far I started my career as an accounts assistant under a youth training scheme back in 2001, working my way round that department and other areas of the business. You could say I fell into payroll; however, the diversity in the role, working with people and solving problems made it easy to choose this as a career. I moved from operational payroll in 2017 and joined the CIPP as an advisory officer. This role enabled me to put my ‘hands on’ payroll skills to use in a new way – guiding and advising other payroll professionals in the day-to-day running of their departments. I then wanted to get more involved in payroll policy, so jumped at the chance when a position became available, moving into the role of policy and research officer. There, I grew my confidence and got to engage with other payroll industry professionals, members of government bodies and those starting careers in the profession I love. When the role of end point assessment specialist was advertised, it stirred excitement in me, knowing that I could use my payroll knowledge to assess those wanting a qualification in payroll. What are your priorities as end point assessment manager? The team’s main priorities are to ensure that apprentices within the profession are: l assessed fairly
l assessed to the apprenticeship Standards l supported through a highly stressful time. The end point assessment team at IPP wants every apprentice to feel they’ve achieved something great when they pass their assessments, something they should rightly be very proud of. Our assessments are appropriate to the level of study and incorporate real life situations an apprentice would be exposed to. A great experience for apprentices also sits highly on our list of priorities. What does your role mean to you? Everything! I adore my role – I get to work with some wonderful people, both internally and externally, but working with the apprentices at the end of their training and letting them know when they’ve been successful gives me great job satisfaction. While some apprentices have worked in the profession for a while, there are lots that are new: knowing that me and my team have helped them to gain a qualification is a great feeling. As IPP Education LTD is now an Ofqual-approved end point assessment organisation, could you tell us a little more about what this means and how this can benefit apprentices? Being Ofqual-approved is a huge achievement for any organisation. For us, it’s a sign that our assessments and
the processes we have in delivery and development meet that quality seal of approval. For apprentices, their employers and training providers, it means we’re regulated by Ofqual, so everything we do follows the guidance and conditions of Ofqual. We’d never purposely defer from this as getting recognition was no easy feat. There’s also assurance that our assessments, those that govern the assessments and those who conduct assessments are all payroll professionals, whether they’re still working in operational payroll or have great experience in developing and creating qualifications and assessments. How does the CIPP work with apprentices? The CIPP supports all apprentices studying payroll apprenticeship Levels 3 and 5 by offering free affiliate membership for the duration of their study. This support was offered and supported prior to IPP becoming an end point assessment organisation and is set to continue in the future. The CIPP will continue to promote and support payroll apprenticeships, as the organisation is dedicated to raising the profile of the profession, and education plays a fundamental role in this. n
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| Professional in Payroll, Pensions and Reward |
Issue 88 | March 2023
Event horizon
Full details of events and training courses can be found at cipp.org.uk or you can email info@cipp.org.uk for more information.
National forums
Training courses Please note, there are other dates and locations and training courses available. Please visit http://ow.ly/iVfT50MU7yr.
Available dates:
Exclusive to CIPP members*, the national forums are a perfect opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation. This event will also provide an excellent chance for you to network with other CIPP members. *Applicable levels of membership only. 1 March 9 March 16 March
London Online Online
Course
Date
Location
27 March 24 April 30 May 6 March
Online Online Online Online Online Online Online Online Online Online Online Online Online Leeds
Automatic enrolment and pensions for payroll
Holiday pay and leave
6 April 2 May
Annual General Meeting (AGM) 2023 The CIPP’s twenty-fifth AGM is taking place at 11:00 on 29 March 2023 at the Eastside Rooms, Woodcock Street, Birmingham, B7 4BL. The AGM will conduct the following ordinary business: To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions: ● election of board members ● approval of accounts for the year ended 30 June 2022 ● re-appointment of auditors. The meeting will also transact the following business: ● approval of the minutes of the AGM held on 30 March 2022 ● any other business. For details of how to submit further agenda items (deadline 10 March 2023) and to book to attend the AGM (free for CIPP members * ), please click here: http://ow.ly/5y8j50MTVOi. Voting is open and will close during the AGM on 29 March 2023. Details of the ordinary resolutions and the candidate statements have been sent to you* by email.
10 March
Overpayment recovery workshop
5 April 19 May
20 March
11 April
P11D expenses and benefits
2 May
22 May 3 March 9 March 13 March 16 March 27 March 31 March 11 April 8 March 15 March 22 March 30 March
Newcastle Manchester
Payroll update
Online Online
Birmingham
Online Online Online Online Online
*Paid associate, full, fellow and Chartered members only
NEW COURSE Payroll year end
Annual Conference and Exhibition 2023 The CIPP’s Annual Conference and Exhibition will return to the luxurious Celtic Manor Resort in Wales on 4 and 5 October 2023.
National payroll week 2023
PAYR LL NATIONAL WEEK 2023
Although it’s only March, we’re already excited for National payroll week 2023, which runs from 4 to 8
This amazing event will allow payroll and payroll professionals from across all sectors and working environments (in-house / outsourced) to education, collaborate and celebrate all things payroll, pensions and reward. Further details can be found here, along with information regarding the renowned awards ceremony: http://ow.ly/ nHXA50MTYf9.
September this year. We’ll be posting announcements about the activities to come, and it’s never too early to start preparing for this hugely important week, which aims to boost the profile of the profession and celebrate all things payroll!
| Professional in Payroll, Pensions and Reward | March 2023 | Issue 88 6
EDUCATE COLLABORATE CELEBRATE
4–5 OCTOBER 2023 Celtic Manor Resort, Wales
TWO DAY CONFERENCE 6 PLENARY SESSIONS
20 INFORMATIVE WORKSHOPS NETWORKING OPPORTUNITIES PRESTIGIOUS AWARD CEREMONY
Visit cipp.org.uk/ACE to book your place Book before 30 June 2023 for the early bird rate of £995 for CIPP members *
Early bird rate for members, valid until June 30 2023
PAYROLL NEWS
Payroll news
DWP releases a consultation diving into small pots pensions WITH THE success of automatic enrolment comes a side effect which could cause issues further down the line. Many pension savers still move jobs frequently and leave behind a trail of small pension savings accounts, known as deferred small pots. With pensions dashboards on the horizon, despite delays, awareness of these pots is due to grow. However, this still leaves the issue of what to do with them once savers are aware of them. The Department for Work and Pensions (DWP) is looking for views on different solutions to this problem. The consultation proposes different methods of automatic consolidation, each with various pro and cons. Once a process for consolidating pots has been agreed, there’s the secondary issue of the pots that have already built up. The DWP will be assessing the solutions against five main criteria: l delivery of overall net benefits for members through improved value for money outcomes, achieving a meaningful impact on the number of existing, and flow of, new deferred pots l complements member engagement on their savings journey / retirement planning l supports a competitive, sustainable and more efficient workplace pensions market (trust and contract-based schemes) l minimising complexity and administrative burdens for employers l commands confidence in the system for savers and taxpayers. The CIPP is involved with the Small Pots Cross-Industry Co-ordination Group, mentioned within the document, and has been involved in getting the proposals to this stage. It can be very technical in parts, but well worth diving into if you’re interested in the pensions space and how we can shape the industry to benefit all pension savers. The consultation can be accessed here: http://ow.ly/lHqA50MP4nu.
Planned ‘fire and rehire’ statutory code A NEW consultation has been released by the Department for Business, Energy and Industrial Strategy (BEIS), presenting a draft code of practice for employers seeking to change employment terms and conditions. This seeks to act against employers who use dismissal to pressure employees into taking new, less favourable, terms of employment. In the press release, it indicated that the P&O Ferries situation, last year, was a contributing factor in the introduction of measures to tackle the issue. The code will give courts and employment tribunals the ability to apply a 25% uplift to employee compensation if their employer didn’t comply with the statutory requirements. The consultation is open until 18 April 2023. If you have any information to provide to BEIS, we strongly advise you to read through the consultation document and respond where possible. This again, is another place we can make our industry’s voice heard and improve the rights of workers across the UK. The consultation is located here: http:// ow.ly/1LJA50MTTAh and the press release can be found here: http://ow.ly/VkV950MP4ts.
Rishi’s cabinet reshuffle creates four new departments ON 7 February 2023, the UK prime minister, Rishi Sunak, announced the creation of four new departments. This means the end of BEIS. The new departments and ministers are as follows: l Department for Energy, Security and Net Zero – Grant Shapps l Department for Science, Innovation and Technology – Michelle Donelan
l Department for Business and Trade – Kemi Badenoch l Department for Culture, Media and Sport – Lucy Frazer. With parliamentary under-secretaries also being reshuffled in the wake of BEIS’s disbanding, it remains to be seen how this will impact us in the long run. The Department for Business and Trade (DBT) is the most likely, and logical, department to take over duties pertaining to payroll professionals. The CIPP will be keen to see how this impacts the current consultations open with BEIS, holiday pay guidance and statutory payment guidance that sit in BEIS’s remit.
Diary dates
5 March
Last day of tax month 11
6 March
First day of tax month 12
Last day for submitting a real time information employer payment summary to apply to tax month 11 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method
19 March (this is a weekend date)
22 March
Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method
5 April 6 April
Last day of tax month 12
First day of tax month 1 2023/24
| Professional in Payroll, Pensions and Reward | March 2023 | Issue 88 8
POLICY HUB
On your behalf
Although February is the shortest month of the year, for the CIPP’s policy and research team it has proven to be one of the busiest. We're eager to share all the activities we've been involved in with you Policy team update
Events The month started off with a visit to Westminster for the launch of The Institute for Fiscal Studies (IFS) report on ‘a better tax treatment of pensions’. Policy and research officer, Meena Salhan attended this event and fed back on the report's proposals to the government. Policy lead, Samantha O’Sullivan offered her expertise at The Institute of Accountants and Bookkeepers’ (IAB’s) coffee morning, giving an overview of payrolling benefits ahead of the deadline for registering in April 2023. Sam also attended the Good PAYE webinar, as a panellist, to discuss payroll’s role as a key strategic partner and the CIPP’s Future of Payroll report. Policy and research officer, Mathew Akrigg represented the CIPP as a panellist at the Global Payroll Question Time event, which was hosted by Reward Strategy. Global topics were discussed, such as: l remote working l pay-on-demand l how to elevate the payroll profession to engage young people. Additionally, an event for the specialist interest group (SIG) for the payroll services sector has been launched and we anticipate many more in the future. CIPP members from the bureau, software and payroll services space got together, collaborated and discussed issues they’ve encountered. This event included sessions on recruitment and the latest Department for Business, Energy and Industrial Strategy (BEIS) consultation. If you want to get involved in the future, head over to the SIG section on the ‘MyCIPP’ area of the website and keep an eye out for future updates. Sam and Mat also attended the HM Revenue and Customs (HMRC)
included discussion of concerns in the construction industry scheme field. Internal training We’re always covering the events held by the policy team, but we wanted to take this opportunity to highlight some of the internal training the team also undertake. We attended an exciting, interactive full-day session on media training, held by Gail Downey, who is an experienced journalist and broadcaster. The team learnt all about interviewing through different types of media and journalism. Budget day isn’t far away…
stakeholder conference, where they were accompanied by business development director, Vickie Graham. Keep a look out for the next issue of Professional, which will feature a joint article by Sam and Mat. Mat, Sam and Meena also facilitated three think tanks throughout the month, attended by CIPP members, on the topic of the the recent BEIS consultation, which considers introducing a holiday entitlement reference period for part-year and irregular hours workers. This is incredibly important for the CIPP as the feedback will be used to respond to the consultation on behalf of payroll professionals. Finally, BeConnected is one of the most significant and successful events at the CIPP. The sessions took place both face-to-face and online throughout February and are ongoing in March. Sam and editor, Lora Murphy led the first BeConnected in Birmingham on 8 February. The team provided a legislative update and discussed the BEIS holiday entitlement consultation.
The much-awaited spring budget will be delivered by the chancellor of the Exchequer, Jeremy Hunt, on 15 March 2023. The budget will lay out the government's tax and spending plans, with
changes which will inevitably impact many businesses and individuals. On this day, the policy and research team will be ensuring payroll professionals are updated with everything they need to know. Also, keep a look out for details on how to register for the budget outcome webinar taking place on 16 March 2023, and presented by the policy and research team. We recommend you bookmark these dates in your diaries ahead of the new tax year. The BEIS consultation response After weeks of thorough think tanks and surveys, it’s now time to collate all the responses we’ve received in relation to the BEIS consultation. It closes on 9 March 2023 and the policy team will ensure all your opinions are heard. We’d like to thank everyone who took part in the survey and think tanks and look forward to sharing the response outcome very soon. n
Forums Mat attended the compliance reform forum, hosted by HMRC, where the attendees were asked to review compliance methods, to ensure they’re correct and proportionate. Mat also attended the HMRC construction forum, which advised of planned changes, and
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| Professional in Payroll, Pensions and Reward |
Issue 88 | March 2023
MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Calculating redundancy payments Q: We have a scenario which involves calculating a redundancy payment, where the notice date is 23 March 2023 and the leave date is 14 June 2023. Which weekly cap applies in this case – would it be the maximum for tax year 2022/23 or the one applicable in 2023/24? A: The redundancy rate to use would be the one applicable at the leave date when the employment is terminated.
Payments following death in service Q: An employee has sadly passed away but is due holiday pay and a final salary payment. The employee’s daughter has closed the employee’s bank account. Do you have any advice regarding payment of the outstanding amounts? A: Firstly, the termination date should be entered as the date that the employee passed away, with leaving reason selected as ‘employee deceased’. No NI is to be taken on the final pay, which should include all salary and any accrued untaken holiday pay up to the date of death. A P45 should not be issued. Most companies ask employees to complete a nomination form, on which they confirm details of their beneficiaries. It would be advisable to contact the human resources department, to see if a nomination form was completed, to establish who the next of kin is. If there is no such form, then a will should be requested from the family. If there is no will, ask if there was a family member or friend who was given power of attorney when the employee was alive. Ultimately, it is the employer’s responsibility to make sure this is paid to the deceased employee’s personal representative, which is usually the executor of the estate. Chief executive officer (CEO) pay ratio reporting Q: We didn’t complete CEO pay ratios for 2021. Do I need to now complete two years: one for last year and one for this year? How would I report this, as the information isn’t provided
to work. It would be advisable to discuss this with the employee prior to the start of their maternity leave. When do national living wage (NLW) rates apply from? Q: Does the NLW increase take effect from 1 April 2023, or is it from the commencement of the pay period following 1 April 2023? A: The National Minimum Wage Regulations 2015 state: ‘The single hourly rate of the national minimum wage at which a worker is entitled to be remunerated as respects work, in a pay reference period, is the rate which applies to the worker on the first day of that period’. This means checking the start date of the pay period and applying the rate of pay in force then. So, if payment is made weekly, and the pay reference period spans from Sunday 2 April to Saturday 8 April, then the new NLW rates would apply for that week. However, the revised rates would not apply to the previous week (Sunday 26 March to Saturday 1 April), as the rates do not increase until 1 April 2023, and the start of the pay reference period falls before that date.
What are the considerations when calculating redundancy payments?
Give as you earn (GAYE) deductions during maternity leave Q: Should GAYE deductions continue when an employee is on maternity leave and in receipt of statutory maternity pay only? A: GAYE isn’t a salary sacrifice arrangement in which an employee gives up the right to cash in exchange for a benefit. It is deducted prior to the calculation of tax, but after National Insurance (NI) has been taken. An employee can continue to have GAYE deductions taken from her during her period of maternity leave, or can suspend the contribution until she returns
When does the NLW actually apply from?
| Professional in Payroll, Pensions and Reward | March 2023 | Issue 88 10
POLICY HUB
Think strategically
Designed for ambitious payroll and pensions professionals, the CIPP’s BA (Hons) Business Management (CIPP) builds on your industry knowledge and skills to take your capabilities to a strategic level. BA (HONS) BUSINESS MANAGEMENT
on the HM Revenue and Customs (HMRC) website? A: The CEO pay gap data must be included in the annual directors’ remuneration report presented for shareholder approval, at the Annual General Meeting (AGM). There’s no deadline that all companies must meet. The reports published in 2020 had to be reflective of the financial year beginning on or after 1 January 2019. The data must be presented in table format to display total CEO remuneration as a ratio to the median, 25th and 75th percentile of employee pay. The table should be completed year-on-year, to include up to ten years’ worth of data in each annual report. Companies then need to include supporting explanations to put the findings into context. This includes the method used to calculate the ratio and reasons as to why the ratio may have changed from the previous year. The company must also confirm whether they believe the median is reasonable. It’s a legal requirement for large, listed companies that their annual directors’ remuneration report is available free of charge on their company’s website for ten years. Payroll bridging loans Q: We have a customer who wishes to move their pay period backwards. They currently pay mostly in advance but want to pay in arrears, so employees will, in effect, be without pay for a month. To help with this, they want to provide bridging loans for the difference in net in the month of the change, which the employee will pay back over a set period, interest free. Could you please advise: 1) whether there’s any specific guidance around payroll bridging loans being exempt from P11D reporting?
2) if the answer to the above is no, do we just apply the rule that as long as the total of all qualifying loans is under £10,00 within the tax year, there’s no taxable benefit? 3) does the loan have to be paid within the same tax year as it was given, or could this be repaid over a longer period and remain tax-free? A: The employment-related loan legislation is designed to tax the benefit of a loan to an employee or officer where the loan value is over £10,000 at any time in the tax year, and either no interest is paid or interest below the official rate (currently 2.5%) is paid by the borrower. Please see Section180 of the Income Tax (Earnings and Pensions) Act 2003, here: http:// ow.ly/CpIq50MRBQx. If the loan doesn’t exceed this limit, then there are no reporting requirements providing the employee repays the cost of the loan within the agreed timeframe. Recording correct names on payroll systems Q: We have a few doctors who work for us who have different surnames from a medical point of view (e.g., Dr White, but they’re married and their legal married surname is Mrs Black), and we’re not sure what surnames to use in the payroll system. Do their surnames need to be their legal surnames on the payroll system, or does it not matter as we hold their NI numbers? A: The names on the payroll system should match the names HM Revenue and Customs (HMRC) has on record for them. When an employee changes their surname, they should advise HMRC of this. This follows marriage, divorce, deed poll etc. Sometimes an employee has a legal name but wants to be known by another name, so a payroll system may have a field in which their ‘known as’ name can be populated. n
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| Professional in Payroll, Pensions and Reward |
Issue 88 | March 2023
PERSONAL DEVELOPMENT
# Be Payroll Paul Unwin MCIPP, customer care manager, LivePay , chats to us about why CIPP membership is so important to him, and how it’s helped throughout his career
Why did you choose to become a CIPP member? Having moved from working in the construction industry to the payroll industry, I felt that becoming a member of the CIPP was the best way to validate the payroll knowledge I had gained to others within the profession. As I don’t hold any formal payroll qualifications, it was also to allow a professional body to help develop my skill set. The ability to show this to other professionals proves my commitment to the industry and the knowledge I hold. How has your membership helped in your career? It has enabled me to progress within the company I work for and to lead a team of other employees who are all working towards the CIPP Foundation Degree. What membership benefits have you used or enjoyed the most, and can you provide examples? I have made use of the Advisory Service for assistance with queries and find this an invaluable resource when a customer asks a curveball of a question. The newsletters and magazine are also useful for keeping everyone at our office up to date with any changes. Can you describe your payroll journey to us so far? My payroll journey started on my placement year while at university, working in a small accountant practice, where we would process the payroll for several small local businesses. Upon graduating, I worked for a construction company as a business development manager; however, part of my role was
to assist the finance director, to process the weekly payroll for the staff. Just before the pandemic, this company closed, and I was made redundant. After a short, enforced career break (and the birth of my daughter) I was asked by LivePay, the company I work for now, if I could come and help them with the production of furlough reports for their customers in a temporary capacity. I started in this ‘temporary position’ in June 2020. By September 2020, I had been made a permanent member of staff and by May 2021, promoted to their customer care manager. What are your hopes for your future career? To continue to progress within the industry and gain the knowledge and skills required to upgrade my membership with the CIPP to the next tiers.
Do you have any plans to study any CIPP qualifications or training courses?
At present, I’m not looking to undertake any further training or qualifications but this may change in the future when my daughter is a little older and I have more spare time. What advice would you give to those new to the payroll profession, just starting out in their careers? Stick with it – the initial period will be hard, getting to grips with all the calculations, terminology and legislation, but once you get into it you’ll find a rewarding profession with the ability to move into any industry, anywhere around the globe.
If you are interested in featuring in our BePayroll campaign, email marketing@cipp.org.uk
| Professional in Payroll, Pensions and Reward | March 2023 | Issue 88 12
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COMPLIANCE
How is HMRC protecting customers claiming tax repayments?
H MRC opened a further market, specifically focusing on protecting customers claiming tax repayments, which ran from June to September 2022. The CIPP policy and research team responded to the second consultation in the series of ‘raising standards’, providing the views of the Institute and the wider profession. HMRC published the full outcome of this consultation in January 2023, and I want to share this with you. The consultation can be found here: http://ow.ly/4s4u50MzSLV and the response can be found here: http://ow.ly/ AbO550MT2CF. consultation around raising standards in the tax advice
Samantha O’Sullivan MCIPPdip, policy lead, at the CIPP , discusses the outcomes of a recent HM Revenue and Customs (HMRC) consultation, which sought to protect customers claiming tax repayments
Jargon buster
Assignment An assignment is used by repayment agents to legally transfer the taxpayer’s repayments to the agent. Once an assignment is in place, taxpayers cannot unilaterally rescind an assignment. Some repayment agents will refuse to revoke an assignment, while others charge a fee for doing so. Nomination A nomination is used by repayment agents, but does not involve legal transfer of the taxpayer’s repayments to the agent. Taxpayers can remove a nomination to receive the repayment directly, but would need to pay the agent the agreed fee.
Background Let’s refresh on why this consultation ran in the first instance. The crux of it is that the government wants to ‘make tax fairer, simpler and to help our economy thrive’. HMRC had received significant numbers of complaints regarding the unclear terms and conditions repayment agents require taxpayers to sign, which results in customers not fully understanding, or being made aware of, what they’re signing
| Professional in Payroll, Pensions and Reward | March 2023 | Issue 88 14
COMPLIANCE
away. Some customers may not have been aware they were dealing with a third party and not HMRC. What next for assignments? From the responses HMRC received, most respondents who weren’t repayment agents supported restricting the use of assignments. Individuals and tax agents supported the prohibition of assignments. However, professional bodies expressed mixed views on this matter. Some supported the removal of assignments altogether, whereas others suggested the continued use, but recommended a consumer protection message be added to provide clarity to taxpayers. Most repayment agents expressed concerns that restricting the use of assignments would be detrimental to their business. This comes as no surprise, as this is a form of revenue for these business models. HMRC listened to the views of all respondents, and has now created a dedicated repayment agent taskforce, who will review the processes being used by agents, especially around the use of assignments and ensuring they create a valid legal assignment. Moving forward, the consultation response confirms, ‘the government intends to legislate to render void assignments of income tax repayments. The effect of such legislation will be that assignments of income tax repayments will have no legal effect and the repayment will remain the property of the customer.’ HMRC is aware that some repayment agents provide invaluable services to taxpayers, and are doing so by using nominations, which will still be available for them to use. This allows taxpayers to still use a repayment agent to help with their tax repayments, and agents to continue to collect their fees in advance of paying their customer. This seems to be a practical and reasonable solution for all parties involved, including HMRC, as nominations are processed quicker than assignments. Updated Standards for agents The consultation responses supported the need for greater transparency in repayment agent advertising, and the terms and conditions of agreements used. As such, HMRC updated its Standard for agents guidance pages in January 2023, to provide clarity around a number of issues
raised in the consultation, including, but not restricted to: l ensuring marketing material clarifies that agents are not part of, or acting on behalf of, HMRC l ensuring the identify of the agent or firm is clear, especially when known by a trading name / shortened version of the legal name l before any contract is agreed, ensuring the client understands: ❍ how the agent should be paid for their services ❍ how any repayment that arises will reach the client and what conditions apply (if any) ❍ details of deductions by the agent from any repayment the agent handles for the client ❍ the rights that both the agent and their client have to end the arrangement early or unilaterally. In the response summary, HMRC states it has, ‘a range of powers it can and will use where agents breach these Standards, including refusing to deal with that agent. Where behaviour falls short of the Standard, HMRC will work with the agent, and will pause processing their claims if they fail to improve’. It’s promising to see that HMRC is committed to reducing the number of repayment agents not acting in line with the Standards set out in its guidance. You can familiarise yourself with the HMRC Standard for agents here, http:// ow.ly/qO8b50MT2WK.
ensure it maintains a modern approach to customers who provide agents permission to act on their behalf. HMRC will then be more comfortable that the customer is aware of what they’re agreeing to and provides the correct level of consent. This is especially important in scenarios when a nomination is implemented where the repayment is paid to someone other than the customer. Repayment agents: register here This may come as a surprise to some of you, but as it stands, repayment agents aren’t required to register with HMRC. This means the department is currently unable to check if agents are registered for anti- money laundering supervision, or if they’re meeting the Standards for agents. HMRC has confirmed, ‘HMRC will introduce a new requirement for repayment agents to register with HMRC that will meet the needs of both repayment agents and HMRC, and support future strengthening of oversight of the tax advice market’. More information about this new approach will be set out in early 2023. HMRC also published a policy paper, How HMRC works with agents , in January 2023. You can view this paper here http:// ow.ly/ZjF650MzUVq. To view the CIPP’s response to the consultation, head over to the Policy Hub area of the MyCIPP pages http://ow.ly/ QEsg50MA7iZ. n ‘HMRC will introduce a new requirement for repayment agents to register with HMRC that will meet the needs of both repayment agents and HMRC, and support future strengthening of oversight of the tax advice market’
The strengthening of agency authorisation
As mentioned earlier, HMRC has created the newly set up dedicated repayment agent taskforce. In line with this new team, HMRC has also confirmed that a review into the sign-up processes used by repayment agents will be carried out, to ensure they meet the criteria laid out in the Standard for agents guidance. The responses highlighted to HMRC that the current methods of authorisation don’t allow customers to limit agents to specific repayment claims. The responses questioned whether HMRC should do more to validate claims received, which have been signed with the customer’s intent. Therefore, over the coming year, HMRC has pledged to meet with agents, customers and software providers, to
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| Professional in Payroll, Pensions and Reward |
Issue 88 | March 2023
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