COMPLIANCE
Samantha Johnson LLB(Hons) ChMCIPPdip, CIPP policy lead, provides a whistle-stop tour of the changes for payroll professionals for tax year 2022/23 Payroll in 2022
A s 2021 draws to a close, twelve months and wonder what 2022 will bring. In payroll, change is a constant and 2022 will most certainly be no different. and Christmas and new year celebrations commence, it is natural to reflect on the last
which challenged the traditional perception that payroll processing can only take place in the office. Working from home became the norm in payroll in 2020 and 2021, and we are only at the beginning of the cultural journey to understand if working from home is here to stay. Many businesses have already embraced this change with open arms, issuing permanent policy changes to facilitate a more flexible approach to the traditional nine to five. Uninformed employees could create a tidal wave of queries if they are not With transferable skills that mean payroll professionals can work across all sectors, it will be incumbent on employers to ensure they are actively evaluating and assessing the needs of their employees, to avoid losing valuable talent from their organisation. In addition, with the removal of the temporary home working rule on 6 April 2022, employees who work from home due to Covid will no longer be able to claim for the £6 per week tax relief. Instead, they must show they are eligible under section 336 of the Income Tax (Earnings and Pensions) Act (ITEPA) rules, which are much more restrictive. The rules can be found here: http:// ow.ly/B4AI30s1Ihp. Employees must demonstrate that the expenses were incurred in the performance of their duties, were necessarily incurred and that they were wholly and exclusively incurred. If expecting the increase in NI
employees have changed their working arrangements to facilitate home working, they cannot be guaranteed they will be eligible for this allowance in the next tax year. Employment Bill The eagerly anticipated Employment Bill continues to keep payroll professionals waiting. This Bill will hopefully introduce an implementation date for statutory neonatal pay and leave, and statutory carer’s leave. It will also provide details on the introduction of the single enforcement body. In 2020, the government confirmed it would introduce neonatal pay and leave, however, an implementation date is yet to be confirmed. The introduction of this new statutory entitlement will provide parents with babies who are 28 days old or under and require neonatal care, with a new type of leave which will be in addition to the standard parental leave. Leave entitlement will be a day one employment right, with paid leave based on length of service. Leave and pay could last for a maximum of twelve weeks. Conversely, carer’s leave will be an unpaid entitlement for all and will be a day one employment right. Employees will be entitled to one week, to be taken in one block or used flexibly, by taking half or single days. The details of the single enforcement body are expected to appear in the Employment Bill. In June 2021, the government confirmed it would be moving forward with a single organisation, tasked to enforce key areas that impact payroll professionals on a daily basis. Holiday pay, national minimum wage (NMW) and statutory sick pay will be some of the areas that will be actively enforced by this new body.
Health and social care levy On 7 September 2021, the prime
minster, Boris Johnson, announced the introduction of a new health and social care levy. This levy will be set at 1.25%, and for the 2022/23 tax year only, will be added to national insurance (NI) rates. In practice, the implementation should be straightforward in 2022, with the increase applying to class 1, 1A, 1B and class 4 NI. However, the more significant impact in 2022 will be two-fold. Payroll teams will be asked to prepare both the employee and the employer for the additional costs. Uninformed employees could create a tidal wave of queries if they are not expecting the increase in NI. Although, employers are being encouraged to include a payslip message to aid employee understanding. Employers will also need to ensure they have allocated sufficient budget to this new employment cost and take action to adjust their business strategy if they are unable to absorb the oncost. In the payroll software space, developers will quickly be looking to understand the detail of the 2023/24 health and social care levy, which will be separated from NI at the start of the 2023/24 tax year tax year. Her Majesty’s Revenue and Customs has yet to confirm the detailed structure, and the clock is ticking for software to be designed, developed and tested before it can be rolled out to users. Flexible, hybrid and remote working The pandemic created an opportunity
NMW 2022 will see another step towards the
| Professional in Payroll, Pensions and Reward | December 2021 – January 2022 | Issue 76 18
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