MEMBERSHIP INSIGHT
Time Regulations 1998 (being the first twenty days of holiday an employee takes). An employer could choose to calculate and pay average holiday pay on all of the statutory leave (5.6 weeks) or all of the leave they are entitled to (i.e. 33 days in your question) if they wish but the minimum is the first twenty days. To clarify, all types of overtime including voluntary must be included when calculating a worker’s statutory holiday pay entitlement. It only excludes overtime worked on a genuinely occasional and infrequent basis. Commission should also be factored into statutory holiday calculation including work-related travel. Please see the ACAS guide found here: https://bit. ly/1KB413N. Q: Are we ok to re-issue a P60 certificate with just a covering letter as the first P60 that was issued was incorrect? The only change is the company name and address, not the actual figures. A: If you are changing a P60 the amended P60 must state ‘REPLACEMENT’ regardless of the reason for the replacement. In your situation, though it is the company name and address that are incorrect the new P60 certificate will still need to read ‘REPLACEMENT’. You can also issue a covering letter with the replacement P60, but the key is the certificate must have the wording ‘REPLACEMENT’ on it. Q: I have a question regarding eye tests and payments towards glasses for the use of visual display unit (VDU) equipment. Is there a set fee for employers for reimbursement of eye tests? The company policy is that all team members receive £45.00 towards the cost of glasses when they are required for using a VDU. Do you know if this is a set amount that HMRC would allow tax and NICs free? A: There will be no chargeable benefit for the cost of an eye test where the employee uses a VDU to carry out the duties of their employment and if the glasses are only for using the VDU the cost of providing them will be exempt as well. If the glasses have a prescription for VDU use and general use the cost for the VDU prescription would be exempt; but not the general use cost. The exemption does not specify a particular value just that the employee must work with a VDU.
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Q: One of our employees will not qualify for statutory maternity pay (SMP), because she has been accidentally underpaid (payroll error) in one of the months we are using to calculate her average weekly earnings (AWE). Can you offer any further advice, or do I just issue form SMP1? A: The HM Revenue & Customs (HMRC) guidance states the following in regard to under- and overpayments: “If there are over- or underpaid earnings affecting the AWE which disadvantages either you or the employee, check if there’s documentary evidence agreeing to the amount that should have been paid. If there is use the agreed earnings to calculate the AWE. If there isn’t use the actual earnings.” This extract is taken from the following link: https://bit.ly/2IlojEA. So as long as you have the right documentary evidence to prove this situation was detrimental to the employee then you can use the earnings liable to class 1 National Insurance contributions (NICs) as they should have been. Q: We have an employee who is going to be in a temporary role for approximately eight months and in a different location. It is going to be extremely expensive for the employee to stay in hotels therefore we are looking into a short-term property rental. Please can you advise the tax implications for this? A: HMRC’s Employment Income Manual states that it is allowable for an employer to provide an employee on secondment at a temporary workplace with furnished
living accommodation. The guidance explains what limits ought to be placed on the relief under section 338 of the Income Tax (Earnings and Pensions) Act 2003 for the cost of living accommodation. Please visit https://bit.ly/2wqwppH for the full guidance. Q: We currently have an employee who is on a fixed contract until 30 November 2018 and is pregnant. Will she qualify for SMP? A: To qualify for SMP she will have to meet the earnings rule and the continuous employment rule. She must have been employed by the employer for a continuous period of at least 26 weeks into the qualifying week (which is the fifteenth week before the week in which the baby is due). This period must include at least one day’s employment in the qualifying week. You will have to check her dates very carefully using either the SMP calculator or the SMP tables and if she doesn’t qualify you will need to issue form SMP1. Please see these useful links: ● SMP calculator: https://bit.ly/1Bo1mUR ● SMP tables: https://bit.ly/2zwqvGj. Q: Can you confirm I must pay ‘average holiday pay’ on all of the holidays an employee is entitled to (i.e. 25 plus 8 bank holidays), and, if so, does this have to include overtime the employee has worked? A: The guidance states that to calculate the average holiday pay including ‘regular overtime’ you use the previous twelve weeks’ pay and this is for the any of the leave under regulation 13 of the Working
| Professional in Payroll, Pensions and Reward | November 2018 | Issue 45 6
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