MEMBERSHIP INSIGHT
the week in which falls the 1 September following their 15th birthday or their 16th birthday if the child is disabled. The second condition is regarding the premises of the nursery: it cannot be a private dwelling i.e. it cannot be the employee’s home under the provision of a nanny or a childminder’s home. The premises must also be registered under one of the Acts: In England, those specified under Part 3 of the Childcare Act 2006; in Wales, those specified under Part 2 of the Children and Families (Wales) Measure 2010; in Scotland, those specified under Part 1 or 2 of the Regulation of Care (Scotland) Act 2001; and, in Northern Ireland, those specified under Part XI of the Children (Northern Ireland) Order 1995. Thirdly, the employer must meet the ‘scheme employer’ condition or be in partnership with another employer. To be classed as a scheme employer they would be the employer that operates the scheme under which care is provided. Finally, the fourth provision is that it should be open to all employees or all employees working at the site where the provision is provided. The meaning of ‘care’ in regard to a workplace nursery for this exemption to apply can be defined as any kind of care and supervised activity apart from compulsory education provided in schools. If the conditions are not met, then it would become a benefit to the employees and the ‘marginal additional expense’ of providing the benefit to the employees is what should be reported in the P11D return. Q: This month we have an employee who wishes to have a share save deduction of £1,800 taken. Will this affect the NMW calculation for this employee? A: This will not affect the NMW. The guidance – national minimum wage and National Living Wage – calculating the minimum wage (see https://bit. ly/2waOo6F) – states that deductions from pay or a payment by the worker does not reduce NMW or national living wage if these deductions are for the purchase of shares, other securities or share options. Q: If we receive a new starter checklist for an employee and their home address is in Scotland, should we as the employer enter their tax code on to
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m.
to 4.30p.m. on Fridays. It is free to all CIPP members * , students and attendees of approved CIPP courses and conferences in the last six months. Call 0121 712 1099 , email advisory.service@cipp.org.uk or visit cipp.org.uk for frequently asked questions.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: An employee, who has received the maximum 28 weeks’ entitlement of statutory sick pay (SSP), would like to know when they will become eligible for SSP again. Is it a rolling twelve-month period or in the new financial year? A: If an employee has exhausted their entitlement to 28 weeks’ SSP for a period of incapacity for work (PIW) and has then been claiming employment and support allowance (ESA) from the Job Centre Plus, then on their return to work they should receive a letter from Job Centre plus explaining when they will be entitled to SSP again. HM Revenue & Customs (HMRC) provides guidance in the Statutory Payments Manual which explains that the employee will not be entitled to SSP if they are sick within twelve weeks of receiving ESA (https://bit.ly/2LpDzk3). Alternatively, if they return to work immediately after 28 weeks of SSP they will need to be back at work for at least eight weeks to be entitled to further SSP. If the new absence is less than eight weeks from the previous PIW, this absence will be linked, and the employee will not be entitled to SSP; you would have to issue a SSP1 form. Q: We are a bureau. A client pays their two employees a standard salary each month along with a very large bonus payment each quarter. Their standard salary will no longer meet the national minimum wage (NMW), but their bonuses from last year equated to over £70,000. We would like to understand
whether their basic salary should be increased to meet NMW or can it remain as it is because they will receive large bonus payments through the year? A: It is possible to account for some of the bonus towards NMW. For example, if you pay a bonus in March which relates to January, February and March and you pay the employees monthly you can allocate one third of the bonus to the February and March pay periods, but you wouldn’t be able to attribute any of the bonuses to the January pay period. This would mean that if the client did not increase the January salary it would be below NMW. If the bonus was paid monthly, then this could be used each pay period towards NMW. The latest guidance for NMW ( National minimum wage and national living wage – calculating the minimum wage ) can be found here: https://bit.ly/2waOo6F. Page 16 explains how annual bonuses can be applied to the NMW and the principle here is the same; however, the bonus is divided by twelve instead of three. Q: Would a ‘before and after school’ club meet the conditions for the income tax exemption for a workplace nursery? A: This could be included providing all four conditions are met for a workplace nursery. The first is that the person who receives the care must be a child or stepchild of the employee maintained wholly or partly at the employee’s expense, live with the employee, or be a child for whom the employee has parental responsibility. A person is a ‘child’ for the purposes of this exemption up to the last day of
| Professional in Payroll, Pensions and Reward | July - August 2018 | Issue 42 6
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