MEMBERSHIP INSIGHT
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 https://bit.ly/2A2wWks.) 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 advisory.service@cipp.org.uk or visit cipp.org.uk to live chat.
Advisory
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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 https://bit.ly/2BobWUQ) 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: https://bit.ly/2SX9H29 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: https://bit.ly/2A2wWks. 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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