Professional February 2019

Official publication of The Chartered Institute of Payroll Professionals

in Payroll, Pensions & Reward

Issue 47 February 2019

The future of payroll

Cause and effect Foresight and forethought

The Good Work Plan Change foreseen

A challenging, fascinating future The blockchain foretold

CIPP update | Policy hub | Career development


To save time and money

0845 370 3210


“When the winds of change blow, some people build walls and others build windmills.” Chinese proverb

Editor’s comment

What better way to start a new year than reading thought-provoking articles and commentary on the future of payroll? You’ll find stimulating articles and opinion on this subject from page 35. In my fifty+ years in the industry I’ve

(Today, for example, the ratio of payroll professionals to payees is substantially lower than in the past.) I am not convinced that similar improvements in efficiency can be achieved now. Surely, the result of automation efficiency is that payroll professionals must now possess more knowledge, skills and responsibilities than their predecessors? I am certain that demands on payroll will continue to change, and that the demand for qualified skilful payroll professionals will continue.

experienced and witnessed extraordinary change. Though automation (computerisation of calculations etc) has undoubtedly been the catalyst of this change, also significant is government’s continuing use of payroll to deliver rights and duties for employees and employers. In my early years in payroll there was enormous scope for automation to bring extraordinary efficiency to the payroll office.

Mike Nicholas MCIPP AMBCS Editor

Chair’s message

This is my first message, and I am extremely pleased to be writing to you all in this way. I thought it may be useful to provide a brief background. My journey in payroll began after leaving education, with a role as an

Just as retailers are changing shape to respond to the demands of shoppers, we must also take account of the changing demands of the employee base. I look forward to working with the CIPP board and would like to take this opportunity to formally thank Eira for her stewardship over the term of her appointment. Eira has been an excellent chair, providing strategic direction to the review of our portfolio and bringing Chartered membership to the Institute. As both a friend and a colleague, I thank her for the momentum gained and the course being followed. I’m looking forward to being at the helm for my period of stewardship. May the winds of success fill our collective sails. I do hope to meet as many of you as possible in the weeks and months to come, please do feel free to reach out to me at .

office junior for a local construction firm. This gave me an insight into working rule agreements, joint council rules and an appetite for delivering a product (payslip) as the result of many computations. My journey began in a time before computers, when each payslip was built up manually and carbonised paper was all the rage. In my position now, I want to focus on the future of payroll and pensions and what that means for our industry and the professionals within it. Our future is not just affected by the technology available to us, it is also about how we respond to broader expectations of individuals in the workforce. The gig economy and the increasing demand for immediate information will drive changes in how pay, pensions and the rewards of working life are handled by those responsible for delivering the numeration to bank accounts, and pension pots alike.

Jason Davenport MCIPP MIoD Chair, CIPP

So, what were your New Year’s resolutions – and are they broken, yet? The board of directors and the CIPP team resolves to continue to be at the CEO’s message forefront of continually promoting payroll and pensions education, training and membership

research team through our regularly updated online journal, Payroll: need to know, your guide to UK payroll legislation and reporting , an invaluable benefit of your membership. I extend a warm welcome to our two new board directors, Ros Hendren (who stood down at the end of her term and was successfully re-elected) and Diane Hoodless. You can see their profiles and learn how they will represent you as members at Thanks of course to our outgoing director, Eira Hammond (at the end of her term) for her ten years tenure and her excellent stewardship of the CIPP over the last two and a half years. Thank you, Eira. I wish you all a successful and prosperous 2019!

and as professionals we faced several challenges in 2018. The biggest challenge of 2018 was, of course, the introduction of the General Data Protection Regulation. We spent considerable time with fellow professionals having roundtables, producing magazine articles and holding training sessions that supported our industry. What else did we have come our way? Well we had changes to the tax treatment of termination payments, simplification of PAYE settlement agreements, and a rush to meet the deadline for publication of the first gender pay gap reports – and of course Brexit wending its weary way to a resolution (hopefully this will be the case when reading this issue!) And as members you are continually updated by our policy and

Ken Pullar FCIPP Chief executive officer, CIPP


| Professional in Payroll, Pensions and Reward |

Issue 47 | February 2019

in Payroll, Pensions & Reward PROFESSI NAL

Also available online at


February 2019


Cause and effect

Vickie Graham discusses payroll’s future





Opportunities for payroll professionals Clare Temprell sets out how to wow

Electronic submissions to HMRC SamanthaMann discusses developments

Parental bereavement Diana Bruce outlines new rights




Collaborations and mergers in the public sector John Harling considers employment taxation issues

Gender bias in statutory leave take-up CIPP policy and research team provide details of recent research

The Good Work Plan Helen Hargreaves outlines the government’s response

| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 2



Editor Mike Nicholas 01273 412 836 | Advertising Jill Bonehill 0121 712 1033 | Design James Bartlett and Nicole Davis Printing Warwick Printing Company Ltd Chief executive officer Ken Pullar FCIPP CIPP board of directors Jason Davenport MCIPP MIoD Suzanne Gallagher MCIPP Stuart Hall MCIPPdip Ros Hendren MSc FCIPP, Mgr, FCMIdip, FHEA Dianne Hoodless MSc CHFCIPP FHEA Liz Lay MSc FCIPPdip Karen Thomson MSc ChFCIPP, FHEA Cliff Vidgeon FCIPP Ian Whyteside MCIPP, FMAAT, ATT

Worker status, PTSD, PHI Nicola Mullineux outlines decisions

Employment law in 2019 Danny Done looks ahead



Time to change Johanna Nelson discusses pension communications research findings A challenging, fascinating future Peter Van Ostaeyen on data usage and blockchain 41

Pension dashboard progression Henry Tapper discusses developments 42 Rolling pay into the future Brian Sparling reveals the technology drivers



Useful contacts

Membership 0121 712 1073 Education 0121 712 1023 Training 0121 712 1063 Events 0121 712 1013 Marketing and sales 0121 712 1033 General enquiries 0121 712 1000

Future of payroll Jerome Smail reveals views of industry luminaries

Think big, start small Glyn King urges step change


01 Editor’s comment, Chair’s andCEO’s messag e

17 Payroll insight 31 Reward insight 38 Pensions insight 41 Feature articles The future of payroll 56 Confessions of a payroll manager Additional online content 22 Outsourcing your payroll department 23 Blessing or a curse? 24 The basics of student loan deductions 31 Demotivation nation: UK epidemic 49 Future of the payroll profession 50 Calculating GTL insurance

Events, news and developments

04 CIPP update 06 Events Horizon 07 Membership insight Five minutes with, On your behalf, Advisory 12 Career development Diary of a student @CIPP_UK

Articles Please support this magazine so that it can continue to be a part of your membership package. Trademarks The CIPP logo, the initials ‘CIPP’ and the words ‘Professional in Payroll, Pensions and Reward’ and ‘CIPP Consult’ are trademarks of the Chartered Institute of Payroll Professionals. Copyright: The Chartered Institute of Payroll Professionals 2019. The Chartered Institute of Payroll Professionals, CIPP, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 Fax 0121 712 1001 Copyright This magazine is published by The Chartered Institute of Payroll Professionals in whom the copyright is vested. All rights reserved. No part of this publication may be reproduced, stored in a retreival system, or transmitted in any form or any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. The views expressed in this publication are not necessarily those of the CIPP or the editor. The information and comment contained in this publication are given in good faith, their accuracy or completeness cannot be guaranteed.

14 Industry news 16 Payroll news


| Professional in Payroll, Pensions and Reward |

Issue 47 | February 2019

CIPP update

Payroll Assurance Scheme THE FOLLOWING have achieved prestigious Payroll Assurance Scheme (PAS)

Payroll professionals recognised at the IAB awards THE CIPP was delighted to sponsor the payroll professional of the year award at the IAB and IAAP UK and International Business and Skills Awards hosted on 6 December at the House of Commons, London. Congratulations to Nicole Hagan-Kidd ACIPP from Armstrong Watson who received the runner-up prize and to Aisling Murray from Intelligo Software. Aisling was nominated by her employer for being a quick learner and committed to improving efficiency within her team, and constantly striving to improve internal processes in order to achieve the best client experience possible. The nomination stated that her exceptional technical ability and customer service skills have enabled her to build strong relationships with her clients which has had a positive impact on her employer’s levels of customer satisfaction. Commenting on her win, Aisling said: “I am over the moon to have been nominated and also to have won the Payroll Professional of the Year award. Winning this award means a great deal to me as it is recognition from my peers of my career achievements thus far. To be recognised as Payroll Professional of the Year proves I was spot on in my decision to specialise in payroll and it makes all the studying and hard work to get where I am now worthwhile. I plan to continue my studies and so this award has definitely spurred me on.”

accreditation: Safe Computing, Vibrance, NES Global Talent, Voyonic Crewing Limited, Merryhill Accountancy Services Ltd, FS4S, and Kinleigh Folkard & Hayward.

Ken Pullar, CIPP chief executive officer (CEO), said: “We are thrilled these organisations have joined the ranks of organisations to achieve this respected accreditation. It is imperative that organisations comply with government legislation and the PAS scheme is designed to help companies do just that.” Visit to find out more about the PAS.

Compact Payroll Reference Book added to CIPP membership benefits

WITH EFFECT 30 November 2018, the CIPP owns the Compact Payroll Reference Book and will be co-ordinating the publication and distribution for the 2019–20 and future editions. We will be in touch with members in due course to confirm which level of membership qualifies for a copy of the book, and with details on how to purchase additional copies. This book is an essential addition for any payroll office and ownership of the book sets the Institute, as your Chartered body for payroll, further apart in comparison to any other organisation. If you have any questions regarding this, or any other membership benefits, email or call 0121 712 1073.

Elaine Gibson and Aisling Murray

CIPP Annual General Meeting THE INSTITUTE’S 2018 Annual General Meeting took place at the CIPP London offices in Arne Street at 11 a.m. on 4 December 2018 to consider and, if thought fit, to pass the following resolutions: ● To elect two directors to the board ● Approval of accounts for the year ended 30 June 2018 ● Re-election of auditors (Haines Watts) ● Any other business. Ros Hendren MSc CMgr FCMI dip FCIPPdip FHEA and Dianne Hoodless MSc ChFCIPP FHEA were elected as the board members. In addition to the two board positions, the other resolutions were voted as follows:

● Approval of accounts – for: 499 votes; against: 3 votes ● Election of auditors – for: 309 votes; against: 9 votes.

| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 4

CIPP update

Payroll Assurance Scheme Don’t wait until it’s too late

CIPP launches CEOpay ratio reporting online training course FOLLOWING YEARS of concern about high levels of executive pay, the government has introduced legislation requiring listed companies to disclose figures and narrative about the ratio between the pay of their CEO and that of average employees. The legislation, which has effect from 1 January 2019, applies to financial years starting on or after this date, so the first organisations will publish from January 2020 onwards. It is therefore important to begin preparations well in advance and even to calculate the ratios using recent data so that organisations know what to expect and can prepare themselves for the inevitable spotlight on the published data. This online course will enable delegates to: ● identify organisations required to submit CEO pay ratio data ● identify and collate appropriate data for calculations ● calculate the statutory pay ratio figures- ● outline the supporting information requirements for the calculated figures ● appreciate the wider internal and external implications of the reported figures for an organisation. To book your place on this essential online course visit or email for more information.

With penalties for non- compliance of up to £10,000 per day * , can your business afford not to be CIPP Payroll Assurance Scheme accredited.

Level one and two payroll qualifications on offer through the CIPP in conjunctionwith Sage THE CIPP is delighted to announce that since 2 January 2019 it is offering the following courses and qualifications:

● Computerised payroll level one ● Computerised payroll level two

● Level 1 Award in Computerised Payroll for Business (RQF) ● Level 2 Certificate in Computerised Payroll for Business (RQF).

The introduction of these courses and qualifications to the CIPP’s education offering positions the Institute as the only provider of payroll qualifications from level one to level seven. Providing payroll professionals with a clear pathway and educational support whatever stage of their career. Using the latest Sage software, the programmes provide the learners with an excellent understanding of payroll administration and calculations, as well as experience in using payroll software. Speaking about the launch, Elaine Gibson MSc ChFCIPPdip, education director at the CIPP said: “respondents to the CIPP marketing insight survey 2018 indicated that they wanted this introductory level of qualification for their payroll teams and so we are delighted to be working with Sage to provide this for them.” To enrol or find out more about the level one and level two qualifications, visit

For more information: Visit: Email Call: 0121 712 1000 Live chat with us @CIPP_UK


| Professional in Payroll, Pensions and Reward | XX *correct at time of publication

| Professional in Payroll, Pensions and Reward |

Issue 47 | February 2019

Events Horizon

Full details of events and training courses can be found at or you can email for

CIPP and AAT hot topics 7 March 19 | Leeds

Scottish National Conference and Exhibition 2019 5 September 2019 | Dynamic Earth, Edinburgh

This is your opportunity to take part in educational and interactive sessions, where you will learn all the latest payroll and pension legislation changes, including recent changes to the apprenticeship levy and salary sacrifice. You will have the opportunity to achieve your CPD, as well as discuss your CPD objectives with a member of the CIPP team.

We are delighted to announce the return of the CIPP’s Scottish National Conference and Exhibition on 5 September 2019. This prestigious event will be held at Dynamic Earth, a venue superbly located in the heart of Edinburgh’s World Heritage Site. Join us for a full day of interactive and engaging workshops and seminars. This is your opportunity to hear from our guest speakers and learn all about the latest changes and developments in payroll, pensions and reward. On the evening you are invited to meet with other payroll professionals and celebrate National Payroll Week at a drinks reception in the Dynamic Earth galleries. To view the programme and book your place please visit events-main/events-calendar.html or email us at .

50% off for members

National forums Bookings open in February

Available dates



2 May

13 June



9 May

18 June

Exclusive to CIPP members*, the national forums are a perfect opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation. This event will also provide an excellent chance for you to network with other CIPP members.



16 May

10 July



22 May

11 July



6 June

17 July


12 June

*applicable levels of membership only. Please be aware that lunch will not be provided.

Training courses


Date *



Date *



11 March


19 March

Employment status and modern working practices


14 March


22 March

Payroll and HR legislation update (50% off for members)

Cambridge Newcastle Edinburgh

15 March 18 March 25 March


4 April


13 March

Gender pay gap reporting and HR implications


19 March


8 April


3 April


12 April

P11D expenses and benefits


12 March


15 April

Salary sacrifice and other optional remuneration arrangements


18 March

Dates are subject to change. More dates are available at training-listing


21 March

Can’t find a date or location for your needs? Let us know by visiting . New dates and locations may be added if there is enough interest.

Have you considered in-house delivery of training courses?

The full list of CIPP training courses can be found at

| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 6

Membership focus

Improve your chances of landing that new job

5 minutes with… Dianne HoodlessMSc

Level one and two Computerised Payroll for Business qualifications with RQF accreditation now available from the CIPP

CHFCIPP FHEA Board director

Tell us about your career and background in payroll? I have worked in the payroll profession for over thirty years. Most of those were spent working in a motor manufacturing company based in Birmingham. I then decided to move to the insurance sector where I now work for Hyperion Insurance Group as payroll manager – and I love it! When did you first become involved with the CIPP? I become a tutor for the CIPP in 2004 after completing the Diploma and have been involved with the Institute ever since; not only as a tutor but also student support and payroll trainer. Tell us about your role at the CIPP? As a tutor you are giving back to the profession. Not only are you sharing your experience, but you are developing new payroll professionals and are giving them the tools in their ‘tool box’ to help them to succeed in the future. What does the role mean to you? I have done this role for fifteen years and have loved every minute of it. The proudest moments are seeing the students you have helped on their journey, graduate and become the next set of payroll professionals. What does your appointment to the board mean to you? Everything, I can’t put it in words. I feel very honoured and thankful to all the members who voted for me.

What do you plan for 2019? I plan to fully embrace to role of a CIPP board director – so exciting times ahead. What do you think you can bring to the future strategy of the CIPP? A part of shaping the future strategy of the CIPP is to review current trends such as artificial intelligence (AI) and global mobility, and to also ensure the CIPP is leading the way in the payroll industry. What does the future hold for the future of payroll, pensions and reward? We sometimes talk about having a crystal ball in payroll and right now we could use one; not knowing what impact Brexit or AI will have on the profession, it is a hard question to answer. What I do know, is that it will be exciting and that we will need payroll professionals to lead the way. What do you do in your available time to unwind? I don’t have much of that, but currently I have been knitting octopi for premature babies ( as part of the Hyperion M4M charity, Plastic Oceans. Why was it important to you to become a Chartered Member of the CIPP? I obtained Chartered membership to show that I am dedicated to the profession and show others how important the profession is to businesses. It is such a great achievement. n

In conjuction with

For more information or to enrol: Visit: Email Call: 0121 712 1000 Live chat with us @CIPP_UK


| Professional in Payroll, Pensions and Reward |

Issue 47 | February 2019


On your behalf

Policy team update

The CIPP policy teamprovides details of recent poll findings and developments

I n the weeks running up to Christmas the policy team ran a series of quick polls that have built a picture of how employers utilise the opportunity that the festive season presents to be generous – or not – and to consider the impact that the tax system has on that generosity. Payroll’s influence In the first of our series of festive quick polls we asked the payroll community if the tax and National Insurance contributions (NICs) costs are considered when deciding what is included in their Christmas reward schemes. Just over a fifth of poll respondents said they do factor in these costs. Of the 148 responses received, over half (58%) do not provide any kind of seasonal reward scheme, but: ● 22% said that yes, the tax and NICs costs are a consideration ● 15% said that the costs were not a consideration in decision making at all, and ● 5% recognised that the costs should have been factored in to decisions, but actually they had not. Payroll professionals are in a unique position to really help their business. With payroll being one of the biggest parts of any business, it has a major influence over company costs. The knowledge held by payroll professionals is key to efficiency savings within an organisation; the tax and NICs costs of reward packages being a prime example. Thanking workers Our second quick poll revealed that three quarters of respondents who

provide a Christmas reward to their staff, do so to say thank you. The poll showed that 45% do not provide any kind of Christmas reward (“bah, humbug”, some might say) but of the 55% who do provide 75% do so to say thank you to their staff. Of those responding, 12% provide a festive reward for no other reason than it is just expected; however, 10% hope their reward will help to engage their workforce and 4% hope to inspire them. The results certainly indicate that most employers use their Christmas reward to convey a positive message. Christmas party cost Barely a year goes by when we don’t receive a salutary message from a legal specialist warning about the risk to the employer caused by ‘excess’ at the Christmas party. Yet, nevertheless, these warnings are not enough to prevent nearly half of employers providing and covering the full cost. Our third quick poll also revealed that nearly a fifth of employers contributed in part; however, a third pay nothing at all towards a party. Cost is always going to be the major factor that an employer must consider. It could be that staff have had a pay rise which they value over a festive work celebration, or there could be an alternative seasonal gift that is offered. Great expectations? In our fourth quick poll, we asked what you would be expecting from your employer at Christmas. Of responses received, 46% said that they would be expecting nothing. Like all our polls

we don’t know the reasons behind this statistic, so as with the Christmas party scenario above, it is not necessarily a negative result. Our quick polls just provide options, so it may well be that employees are provided with, say, an afternoon off to do Christmas shopping or an early closure on Christmas day eve. Some businesses may even close down between Christmas and the new year, providing employees with a decent break, despite the possible loss of revenue. Only an in-depth survey would drill down into these kind of details – watch out for one in 2019. It is encouraging to see that traditional gifts – such as drink and food, possibly in the form of a hamper or turkey – are still provided (10% in total). Cash and non-cash vouchers pulled in an equal response with 4% each receiving these gifts, but the top gift is still the Christmas party or other festive experience (65%) as opposed to a tangible reward. Processing gifts In our penultimate festive poll, we asked how your employer processes the value of your seasonal gift. Tax-savvy employers lead the way with 48% of relevant respondents ensuring that this generosity falls within the trivial benefit rules. Prior to April 2016, there was no statutory limit below which benefits would not be taxable and so this subject has been the cause of debates between the employer and their adviser and HM Revenue & Customs (HMRC) for many years. The news that HMRC had accepted the recommendation from the Office of Tax simplification, in a bid to increase administrative simplicity, was indeed welcome. For a gift, or token, to be considered a trivial benefit it must:

...employers use their Christmas reward to convey a positive message

| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 8

This qualification sets out to ensure an in-depth understanding of payroll, and the complex payroll legislation involved, and also provides management skills including performance, time, project and operational management Foundation Degree inPayroll Management Join over 15,000 * qualified payroll professionals in the UK

Policy hub

● cost £50 or less to provide ● not be cash or a voucher that can be exchanged for cash ● not be a reward for the work or performance of an employee ● not be given as a result of contractual entitlement. Gifts, and not just the ones given at Christmas, are limited only by the imagination of the human resources team, but increasingly they are becoming more imaginative than a turkey or bottle of wine. The final cost to a large employer may be significant, but as long as the above criteria are met for each employee, the principle will apply regardless of the final cost. Be mindful that accurate records which evidence that the criteria have been met, must be maintained. We received 165 responses to the poll, which asked “How will your employer process the value of your seasonal gift?” 39% of respondents marked their response as not applicable but, of those where the question did apply, 48% stated that the processing would fall within the trivial benefit rules. Of the remaining relevant respondents: 29% said that their employer used a pay as you earn settlement agreement; 13% would be payrolling the value; and just 8% would be using the P11D return route. Ho ho ho!? Our final festive light-hearted poll asked: “What personality type is your employer at Christmas?” We gave a number of options ranging from miserly-Scrooge to generous Father Christmas, and it would appear that as 2018 draws to a close, many employees perceived their employers to be both. With a slight majority, 33% cited their employer as being akin to Scrooge – which provides a reminder to the employer that we may not be seen by others as we see ourselves. However, this was followed closely by 31% referring to their employer as Father Christmas. The Grinch was next in the pecking order at 18% followed by The Snowman employer coming in at 8%. Level pegging finished off the poll results with 5% of respondents seeing their employers as a Naughty Elf and 5% as Bob Cratchit. As with all our polls, it is only a

snapshot in time, from a certain number of people, and from unknown industries as the poll is in an unrestricted area of our website. However, results can help provide an indication of a trend at a certain time or identify areas that may be of issue. ...guidance does not include more of the detailed, complex scenarios... (Itemised Pay Statement) (Amendment) Order 2018 comes into force on 6 April 2019. This requires employers to show on the payslip the number of hours worked by the employee for which they are being paid, but only in situations where the employee’s pay varies as a consequence of the time worked during the pay reference period. Shortly before Christmas, the Department for Business, Energy and Industrial Strategy (BEIS) published a small guide (just seven pages) to help provide clarification on what actions employers will need to take regarding their payslips for pay periods beginning on or after 6 April 2019. The minimal guidance includes a small number of examples (below) that aim to demonstrate the simplistic approach intended by this legislation: ● a salaried worker with no variable pay ● a salaried worker with additional variable pay ● a worker paid by the hour ● a worker paid by the hour with additional pay for unsociable hours ● a salaried worker takes unpaid leave ● an hourly worker on statutory sick pay. We are disappointed that this guidance does not include more of the detailed, complex scenarios cited by stakeholders, and we fear this will lead to confusion amongst employers. However, we continue to be in discussions with BEIS regarding the detail. As ever, we welcome any comments to . n Payslip information The Employment Rights Act 1996 ● term-time workers ● day rate workers

Enrol now for spring visit for full details

Delivered in conjunction with

For more information or to enrol: Visit: Email

Call: 0121 712 1023 Live chat with us @CIPP_UK


| Professional in Payroll, Pensions and Reward |

Issue 47 | February 2019

*correct at time of publication


disguised remuneration loan in place which has an outstanding balance. I remember reading that we have to report this on his behalf. How do we go about reporting it? A: Yes, you are correct; this has to be processed through the payroll for pay as you earn (PAYE) purposes and reported via real time information (RTI) to avoid the employee receiving a fine. This should be reported in period 12 (or week 52 if you have a weekly payroll), by 5 April 2019. As an employer, you should include the loan amount in the existing period and year to date fields along with any other payments made to employees in this period in the RTI full payment submission (FPS) return. The calculation of income tax, class 1 NICs and student loan deductions will be based on this figure. You will then be required to use a new FPS field to identify the amount of outstanding disguised remuneration loans included in the ‘pay in period’ field. There will be no changes to the existing calculation or payment process for the employer’s PAYE liabilities. You may need to contact your software provider to ensure that the data file for the FPS return has been updated. The data is required in data items 197 and 198. (See Q: An employee has worked an eleventh keeping in touch day (KIT) day during her maternity pay period, with all eleven days taken during her unpaid maternity leave part. I understand that if they were taken during paid maternity leave then she would lose statutory maternity pay. Are there any implications when using more than the allowable KIT days during unpaid maternity leave? A: If an employee decides to take more KIT days than the statutory ten days permitted in her statutory maternity leave (SML) period, it would result in her leave ending. All the protected rights associated with the employee being on maternity leave will cease and any leave that the employee now takes will be seen as ‘unpaid’ leave. As an employer, you will need to look at your policies to establish what if any are your contractual requirements.

Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m. to 4.30p.m. on Fridays * . Call 0121 712 1099 , email or visit to live chat.


*please see summary at for details.

Q: A restrictive covenant payment is being made to an employee who is leaving. Does it attract income tax and class 1 National Insurance contributions (NICs)? A: My understanding of these types of payments is that they are treated for tax and NICs as normal in the payroll. HM Revenue & Customs (HMRC) guidance (visit regards them as earnings from employment. Therefore, I can confirm these would attract normal NICs. Q: What is the definition of ‘a lifestyle change’ where there is a salary sacrifice arrangement? A: The key to the definition of a lifestyle change where there is a salary sacrifice arrangement is that it is one which significantly changes the employee’s financial circumstances. Some of the reasons are because of marriage, divorce, death of partner, becoming pregnant or redundant. This link may be useful: Q: I have a client with several sites that wishes to employ a gardener to tend the areas around the three office sites. Would a gardener be classed as an agricultural worker? A: The guidance found on GOV.UK gives a definition of what counts as an agricultural worker. It is someone who works in: ● farming and rearing animals ● growing produce including non-edible crops like bulbs, plants and flowers ● forestry, market gardens and nurseries ● maintaining meadow or pasture land,

woodlands and reed beds. This list does not include everything. If you are unsure if a job counts as being in agriculture, call the ACAS helpline for further guidance. Q: If we are paying a dependent child (under age 16) a payment on our pension payroll, what do we do about their National Insurance number (NINo)? Do we just leave it blank, as I understand that temporary numbers should no longer be used? A: An absent NINo is not a barrier to paying someone either for salary/wages or a pension payment. A child under age 16 will not yet have a NINo allocated anyway, so, yes, HMRC expect you to leave the field blank. I can also confirm that temporary numbers are not to be used. Q: I would like to know how we should deduct the new postgraduate loan (PGL). If, for example, we have an employee who has both the student A: The PGL for England and Wales is due for repayment from April 2019 and will have a threshold of £21,000 and the deduction rate of 6%. The PGL will run concurrently with plan 1 and plan 2 repayment if the employee has these in place. Page 3 of the Agent Update 68 found at the following link explains this: loan plan 2 and a PGL, in terms of priority order which should be deducted first?

Q: We have an employee who has advised that he previously had a

Q: Can you clarify something about calculating average earnings for holiday

| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 10


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Certificate inPensions Administration Pensions legislation is changing constantly, and errors in your administration can be extremely costly. Make sure you have the knowledge and training you need to safeguard yourself and your business against financial risk.

pay? I understood that the average is calculated over the twelve weeks prior to the employee taking their holiday, and if there is a week where they were absent sick we would ignore that week and move back a further week . I’m told that the statutory requirement is that calculation is a twelve-week average over the period immediately prior to their holiday no matter what. Is this correct? A: The calculation for the twelve-week average for holiday pay should only be used when an employee works varied hours, has no fixed hours, earns commission and carries out overtime on a regular basis (including voluntary). When an employee takes their holiday, you should go back to the twelve weeks in which the employee ‘worked’. Any weeks that the employee was off sick or was in receipt of statutory sick pay only, or on holiday for the complete week, are to be excluded and you should go back to include twelve weeks the employee worked. The ACAS guide details the rules on what to include and how to process: Q: Our expense policy states that we do not pay home-to-work mileage and our claiming process requires employees to enter either a private mileage figure which deducts off the total claim or zero where there are no private miles. An employee has asked if they can make a claim where the journey starts from work to the location, even if they did not come into work. For example, home to location is fifty miles, home to work is ten miles, so the business mileage to claim would be forty miles. Can this be paid without there being an income tax and class 1 NICs liability? A: It is up to employers to decide what to pay an employee for business travel, but they would need to know what could be paid tax- and NICs-free. Many employers would only allow a payment for the extra miles travelled to be paid, which in this case would be forty miles. The rationale for deducting the home-to-office miles is that there would be no ambiguity regarding normal commuting which would be subject to PAYE income tax and NICs. It is possible that the employee could

claim tax relief if HMRC accepts that the business journey starts from their home to the temporary workplace. For this purpose, they would use a P87 form (https://bit. ly/2DgXUqT) to make a claim. Q: I am due to make to an ex- employee who left the company five years ago a payment applicable to their previous employment. How should I process this? A: This is a standard payment after form P45 has been issued, with regulation 37 of The Income Tax (Pay As You Earn) Regulations 2003 covering the situation. The employer must apply tax code 0T on a non-cumulative basis to the payment for PAYE purposes, and must decide if the payment was irregular or regular for the class 1 NICs calculation. For example, if the payment was for a bonus then this would be classed as an irregular payment and the NICs would need to be calculated on a weekly pay frequency even if the normal pay frequency was monthly. A regular payment would be calculated on the usual pay frequency. The figures would need to be reported in the FPS at the point the payment is made. Q: My client had to make a supplementary pay run in December 2017 after the usual pay day to correct an error. The usual pay day was 21 December 2017, and the date of the supplementary payment was 7 January 2018. When the client sent the FPS for the supplementary payment the pay day was entered as 21 December 2017. The client has received a penalty notice for the FPS which indicates it is due to having the wrong payment date. Is this correct? A: As the extra payment was made on 7 January 2018 it is in a different tax month to the original payment, so a different pay day is required. As the payment is to correct an error you would need to ensure that you have put a late-reporting reason in the FPS for this extra pay run. When an employer does not indicate a late reporting reason, it becomes liable to penalties. n

For more information or to enrol: Visit: Email

Call: 0121 712 1023 Live chat with us @CIPP_UK


| Professional in Payroll, Pensions and Reward |

Issue 47 | February 2019

*correct at time of publication


Diary of a student…

Did the fact that the CIPP is Chartered or recognised within the industry influence your decision to enrol with the CIPP? And were there any particular modules which were of interest prior to enrolling? Yes, having a degree that is recognised within the payroll industry was very important to me and knowing that the skills I have learnt are key to my job. All the modules are very useful in developing your knowledge and skills, but the one I most looked forward to and enjoyed was personal effectiveness and professional development in year three. I found this gave me the time to really sit down and assess my strengths and weaknesses. I could then focus on these and give myself goals to work towards. My manager at the time was really supportive and used these goals as part of my appraisal. I felt I was actually able to develop my skills. For someone who is thinking about studying for a CIPP qualification, what would your advice be to them? Do it! It does take up a lot of time and there is a large amount of work that you need to put into it, but it is definitely worth it. You soon learn to balance your commitments and social life around going to the module review days, tutorials and the reading required. The support you receive from CIPP and the friends you make from it are worth it. On top of that, you come out with a recognised qualification that you can proudly put on your CV. Once you’ve finished, you’ll wonder what to do with all your spare time! n

Helen Moody MCIPPdip Payroll Manager, Cedar + Co. Accountants + Business Growth Specialists

Can you give us a brief background into your life? I have always lived in Derby and bought my house there two years ago where I live with my boyfriend and rabbit, Daisy. I spend the majority of my time outside of work with my horse, Cricket, who I’ve owned for just over six years now. I enjoy taking him out to local competitions at the weekend and hacking out after work. Can you give us an insight into your career and qualifications background? I left college in 2008 not really knowing what I wanted to do. I fell into a payroll job working at the council where I mainly manually calculated payroll. The payroll was calculated once a month so to ensure employees were paid correctly manual calculations were the only option! I started year one of the CIPP Diploma in 2009. Wanting to progress further I moved to a private organisation. Within eighteen months I was promoted to senior payroll administrator when I took on extra responsibility for the payroll process and line manager responsibility. I began year two of my CIPP studies in 2014. After having a break from studying for five years I found it daunting initially but quickly picked it up again. Six months ago, I decided to do something slightly different and moved to my current standalone role where I process bureau payrolls.

Why did you choose to study the Foundation Degree? In my first role, my manager encouraged a few of us who were new to the company to sign up to the first year of the CIPP course. At the time I didn’t realise how important this would be to my career. I really enjoyed the first year but the company I worked for were unable to pay for any further studying and it wasn’t something I could fund myself. Wanting to progress I began to look for a new job. How important is this degree in relation to your career? I feel that this degree is very important for my future career and I wouldn’t be in my current role without it. I have the confidence to process payroll without being surrounded by a payroll team as I always have the support from the CIPP – and the friends I made while doing the course are always there to ask. How did you cope with the work-life balance and study? Having a horse to look after made this difficult. Luckily, my parents and friends helped me with him a few evenings, so I could study a couple of nights a week. I could study better while being in a work environment, as I had everything there that I needed. I would either go in a quiet room somewhere or sit at my desk and stick my headphones in.

| Professional in Payroll, Pensions and Reward | February 2019 | Issue 47 12

Career development insight

Opportunities for payroll professionals

Clare Temprell, payroll managed servicesmanager at Cascade HR, believes that the new year brings newprofessional opportunities, and sets out how to wow the wider business environment

It’s what you know… It may be an age-old saying, but there’s a lot of truth in the phrase ‘knowledge is power’. In a seemingly volatile business environment – being continually rocked with the uncertainty of Brexit, to name just one catalyst – payroll professionals need to maintain an unswerving focus on professional development. By remaining abreast with – if not ahead of – industry trends and legislative changes, payroll teams can speak to customers (internal or external) with confidence. There has never been a more important time to provide organisations with a ‘safe pair of hands’. …And who you know! Savvy payroll professionals know there’s far more to the job than simply hitting a button and remunerating people. But it’s not something we should keep to ourselves. There needs to be a greater level of interaction with employees – and clients in the case of bureau providers – to highlight just what we do. However, this mustn’t be seen as an exercise where we feel we have to prove our worth – customers don’t need to know the detail of what’s involved day-to-day. Yet we ought to be thinking more about our mindset and how we communicate our role in the business environment. We operate in a service culture, where standards matter, and we need to take that service to the next level. It links to my first point: we have the chance to be a ‘go to’ aide for so many business professionals and the workforce alike. But the customers who are centric to our world need to know it. Colleagues need to know it, too. There are so many opportunities for payroll teams to contribute to finance and human resources (HR) projects internally, for

instance, and the debate surrounding our relationships with these departments is not new. However, with movements such as gender pay gap reporting and the ongoing grumbles surrounding shared parental leave, for example, the need for knowledge transfer and collaborative working has never been greater. We need to be clearer – and more confident – about the value we can add to strategic conversations in the boardroom. ...far more to the job than simply hitting a button and remunerating people Be a compliance champion Helping to ensure legislative compliance is another fundamental requirement of a payroll professional. From gender pay gap reporting to the General Data Protection Regulation, regulatory changes in recent times have been vast, and amidst this sea of complexity we have the opportunity to once again ensure we’re viewed as a safe pair of hands. Business owners and management teams have enough compliance headaches to worry about – how great to show that we can remove a couple of those headaches, just by doing our job well. The modernisation of employer pay as you earn submissions is now finally here, auto-enrolment pension contributions are on the up again, payslips are evolving once more and – as of 1 April – the first postgraduate loan deductions must be recovered via payroll at a rate of 6% (on

earnings over £21,000). Compliance is not an exciting topic by any means, but it is an important one, whether we’re thinking about data security, non-discriminatory practices or HM Revenue & Customs requirements. Again, linked to my first point, remaining abreast with regulatory requirements is not easy but this ongoing top-up of knowledge is crucial. Amplify our voice It is important to have a voice not just within the businesses we work for, but in the wider landscape too. This is achievable by contributing to both internal company- specific publications and external forums such as LinkedIn groups. Whether we use these channels to transfer knowledge, seek advice or build connections, payroll’s voice will be amplified as a collective, and our profile will raise as a result. but a number of payroll professionals seem to shy away from shouting about their successes. 2019 should therefore be the year that, as an industry, we challenge ourselves to step out of our comfort zone and applaud our achievements. There are a number of celebratory award schemes in the industry – such as the CIPP’s Annual Excellence Awards – but they can only recognise talented individuals, teams and successful projects, if they are aware what accomplishments have taken place. I urge my peers to research what opportunities exist to raise their profile – and that of their colleagues – as the year unfolds, as it will benefit morale, professional development and the profile of the industry altogether. n Celebrate our successes It’s perhaps a huge generalisation to make,


Issue 47 | February 2019

| Professional in Payroll, Pensions and Reward |

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