ONLINE LEARNING
POLICY HUB
Holiday pay and leave
you have them. HM Revenue and Customs (HMRC) can map their employee records to the corresponding taxpayer records so long as the following details are held: l employee’s full name l employee’s date of birth l the first two lines of the employee’s address. Qualifying years for the state pension Q: It’s my understanding that if you’ve been paid at 52 weeks x the lower earnings limit (LEL) over the year from one job, you’ll get a qualifying year for state pension. Directors pay their National Insurance contributions (NICs) on an annual earnings basis. So, for them, I assume they don’t need to be paid every month to qualify if over the course of the year, they’ve been paid at least the annual LEL? A: Yes, that’s essentially how it works for directors. So long as their annual NICable earnings are at or above the annual LEL, they’ll earn enough to get a qualifying year. Handling P45s when there’s been an overpayment to a leaver Q: A former employee was identified as having been overpaid after they left. We have calculated the amount of the overpayment and advised them; however, they have requested we send an amended P45 detailing what should have been paid. To date, they haven’t repaid the overpayment and subsequently, the P45 is currently correct. In situations such as this, should we wait to issue a corrected P45 until the overpayment has been repaid? A: HMRC has changed rules regarding overpayment recovery, as originally nothing could be corrected until the funds were repaid. However, if it’s an unintentional overpayment and there’s a recovery plan in place, the year-to-date (YTD) figures can What happens when a leaver has been overpaid, and incorrect figures have been provided on the P45?
be updated and a revised full payment submission (FPS) sent, even if the money hasn’t been paid back. A statement of earnings would then be issued or an adjusted payslip to reflect the correct payment figures. Once a P45 has been issued, it can’t be reprinted or amended, as the details will be sent to HMRC via the FPS. If the employee already has a P45 which has been given to a new employer, there’s no need to worry, as HMRC will send revised information to the new employer with the correct YTD details. This is unless the employee returns the original printed P45, but this is hard these days, as most P45s are on copied paper and not printed on HMRC stationery anymore. The statement of earnings shows the same information but cannot be used to reduce tax liability. Incorrect student loan plan type recorded Q: A new employee recently selected that they had a postgraduate loan, and that deductions were due to be taken through the payroll on their New Starter Checklist. Following the first deduction, a start notice from HMRC was received for a student loan plan type 2. The employee has contacted the Student Loans Company, and they should be repaying the student loan plan type 2, and not making repayments for a postgraduate loan, which the employee selected in error. Can we stop the postgraduate loan deductions before receiving the HMRC stop notice, and are we able to refund those deductions directly to the employee through the payroll? A: Once the New Starter Checklist has been completed, you’re obliged to continue operating any student loan or postgraduate loan deductions indicated as due by the employee until HMRC tells you otherwise. So, although it may seem silly, you must continue operating these postgraduate loan deductions until you receive a PGL2 notice from HMRC. Do implore your employee to contact HMRC to issue one. You cannot refund any postgraduate loan deductions without a written instruction from HMRC to do so. Such instructions can be issued, but they’re not common. What’s far more likely is that the Student Loans Company will refund the erroneous deductions directly back to the employee. n
Duration One half day
CPD 3 points
Case law continually produces changes to employees’ statutory holiday leave and pay entitlement, which are covered in this informative course, along with the various types of leave and the calculation of pay.
Visit cipp.org.uk/training to book your place
How do you treat e-vouchers for tax and NI purposes?
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| Professional in Payroll, Pensions and Reward |
Issue 96 | December 2023 - January 2024
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