MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q: We have a situation where an employee has been sick for over a week. Our client has been unable to contact this individual and has been unable to obtain a medical certificate. Can we withhold payment of statutory sick pay (SSP) until a medical certificate is received? A: Her Majesty’s Revenue and Customs (HMRC) advises that employees must inform their employer they are unable to attend work due to illness before the date stated in company policy, or within seven days, if there is no company deadline. SSP can be withheld for any day prior to notification being given if there is no valid reason as to why the employee has not notified you.
Guidance goes on to state that where notice has been given, an employer cannot withhold the payment of SSP if the medical certificate is late in arriving. We would advise that you write to your employee requesting medical evidence and asking them to submit this within an agreed deadline. You could also ask them to contact you to explain why the evidence is late. In the meantime, SSP should continue to be paid until the deadline date has arrived. If no medical evidence has arrived by the deadline, stop payment of SSP and pass this issue to your human resource (HR) team, as they may then regard this as unauthorised absence. For reference, see: https://bit. ly/3mCzH4E. Q: My client operates a relief at source (RAS) pension scheme. An individual, who is a higher rate taxpayer, is concerned that he is not receiving the correct tax relief in his pension fund as the scheme only reclaims 20%. How would he apply for additional tax relief on his contributions? A: RAS pension schemes are those that mean tax relief is claimed by a pension scheme administrator after the contribution is taken from net pay. This means that pay as you earn (PAYE) is operated on the full amount of the employee’s pay. The employer then pays the contribution over to the pension fund and the pension scheme administrator claims back basic rate tax relief from HMRC. It is not tax relief given through PAYE at the point of paying the employee. To obtain additional tax relief, higher
rate taxpayers can submit an annual tax return. Tax relief may also be claimed by contacting HMRC. A tax adviser would be beneficial in scenarios such as this to assist in the completion of the tax return. Q: My client has just discovered that two employees shared a company car in tax year 2020/21. We have received requests to submit amended form P11Ds, but we are unsure how this is calculated and reported on form P11D. A: Section 148 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) discusses the reduction of the cash equivalent of a company car when it is shared between employees of a business. The car benefit is treated as taxable earnings as in normal circumstances and then apportioned between each employee on a just and reasonable basis, with the employee who had most use of the car receiving the higher cash equivalent figure. The cash equivalent must then be reported in box nine of section F of form P11D. Employers are advised to ensure the ‘manual’ cash equivalent figures equate to the total cash equivalent for that car. Attach a letter to form P11D explaining the company car is shared and how the pro-rated calculation was arrived at. For reference, see: https://bit. ly/2YdNxB6. Q: Our HR department has requested that we deduct a pre-agreed £10 net deduction from employee wages to help cover the cost of the Christmas party. The £10 cost is an entry ticket to
Employees should advise their employers they are off sick within certain timeframes, and also provide relevant documentation when required.
| Professional in Payroll, Pensions and Reward | December 2021 – January 2022 | Issue 76 6
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