Policy hub
You may find this direct link to GOV.UK useful: https://bit.ly/2DyGaJi. Please refer to the content titled Section 320A ITEPA 2003, as this explains what is exempt. Q: We have a temp provided by an agency and was an employee of the agency. She has been working for us since March and has today become our employee. My human resources (HR) team have advised that the employee is pregnant, and the baby is due in September. (The HR team were aware of this before she became our employee.) What rights are there to SMP and leave? A: An employee has the right to statutory maternity leave from day one as there is no employment service test to satisfy. However, the employee must have an employment contract with the employer regardless of the length of service and the employee must also have given the company the correct notice i.e. she should have told the employer at least fifteen weeks before the baby is expected, the date the baby is due, and when she wants to start her maternity leave. If she was employed by the agency in the qualifying week, then SMP would be their responsibility. If she was employed by your company in the qualifying week, she would need to satisfy the employment test for SMP to be entitled. If she failed this test the employer would issue form SMP1, and she may be entitled to maternity allowance instead. Q: I am currently processing this month’s payroll and making payments to employees for dividends in relation to their company shares. Some of our employees are set up on the system to have a student loan deduction from their pay. Are the payments made in relation to the dividends to be included in the calculation for the student loan deduction? A: HMRC’s Collection of Student Loan Manual (https://bit.ly/2N2U7P9) gives full details of what is deemed to be classed as earnings when calculating a student loan deduction. The guide advises that any dividends that are paid in respect of company shares are not classified as earnings for a student loan repayment; therefore, any amounts paid in respect of
dividends will need to be excluded when calculating the student loan deduction. Check with your software provider to ensure that the element in your software for this payment has been set up correctly and carry out manual calculations to ensure that the figure isn’t included. Q: The company I work for run a payroll for pensioners and each month we get a lot of leavers due to death. Can you please advise how we would process the final payment of pension? A: The processing of a final payment for an employee who has passed away, whether they are paid on a pensioners payroll or workers payroll, is the same. Within their payroll record, you would enter the date of leaving as the date that they passed away ready for the full payment submission and tax the employee using the tax code that was previously used. No NICs are to be deducted from the employee on a workers payroll and a form P45 should not be issued. Q: Is it possible for an employee who is registered as disabled to use a company car for home to office journeys without it being a reportable benefit? A: Where the employer provides a company car to a disabled employee that they can only use for business journeys, between their home and workplace, and attending work related training, the provision will be exempt from tax or NICs. This is covered by section 247 of ITEPA. There are three conditions that must be met for the exemption to apply: ● The car would be expected to be either adapted for the employee’s special needs or that it is an automatic as due to the disability of the employee they cannot use a manual transmission. ● The employee can only use the car for business journeys and transport of any two journeys which are normal commuting i.e. home to work or travelling to work-related training. ● The above must apply to the whole of the tax year. n
Payroll Assurance Scheme Don’t wait until it’s too late
With penalties for non- compliance of up to £10,000 per day * , can your business afford not to be CIPP Payroll Assurance Scheme accredited.
For more information: Visit: cipp.org.uk/PAS Email compliance@cipp.org.uk Call: 0121 712 1000 Live chat with us
cipp.org.uk @CIPP_UK
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Issue 45 | November 2018
| Professional in Payroll, Pensions and Reward |
*correct at time of publication
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