Official publication of The Chartered Institute of Payroll Professionals
in Payroll, Pensions & Reward
Issue 39 April 2018
A good payroll professional
Pay – performance and talent New approach to pursue?
Gearing up for the gap On track for equality?
Pay gap and employee benefits Figurative mismatch?
CIPP update | Policy hub | Professional development
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As a professional, I cannot afford to be complacent. Amitabh Bachchan (1942–)
Editor’s comment
Although real time information has reduced the admin burden at the end and beginning of tax years, there is still
(imminently) the General Data Protection Regulation (page 26). And just in case you become complacent (or blasé), there are changes in 2019 to provision and content of payslips (see pages 5 and15). I suspect these will pose a significant challenge for many employers, software/service providers and, of course, payroll professionals. April 2019 will arrive fast. All this brings me to the feature topic article (pages 40–42), which asks ‘what does it take to be a good payroll or pensions professional?’. I hope this resonates with you.
much that must be done at this time of the year (page 18). Perhaps I’m mistaken, but it seems this period this year is much busier than
I always find it encouraging, meeting and talking, to payroll professionals around the world about how passionate we are about our industry. I wonder if there are many other professions where the community is so close-knit, with many of us meeting up at events across the world and catching up as if we only met yesterday. Over the past couple of years, I’ve had some wonderful opportunities travelling to destinations that I had only ever read about, both with my day job – where I’m a payroll/human resources consultant working on an international implementation – and of course, through my role as chair of the board of directors for the CIPP. Last year, I visited several cities in the USA and Canada over ten weeks; this year, India for the first time, USA again, and Canada – and who knows where else. But throughout all my travels, there has been a constant: it’s critical the world over that if you’re in payroll you must keep up to date with statutory changes and ensure your payroll is compliant with whatever the tax authorities and other the same period in earlier years. Devolution of certain income tax raising powers to Scotland (with Wales to follow, soon) has clearly complicated matters (pages 16– 17, 43). In addition, we have to contend with: changes to employer- supported childcare, optional remuneration reporting, termination payments, and PAYE settlement agreements (page 19); increases to workplace pension contributions (which might provoke a peak in opt outs), and to national minimum wage and statutory payments rates; introduction of gender pay gap reporting (pages 31, 34) and Chair’s message
Mike Nicholas MCIPP AMBCS Editor
government bodies legislate. In the CIPP, over the last eighteen months, we’ve re-focused our efforts on our core services, training, qualifications and membership. We’ve launched Chartered membership and the new continuing professional development (CPD) tool so that all our members can maintain their knowledge with ease. We continue to provide all levels of qualifications, and free events for members to support their learning, as well as a comprehensive catalogue of training and other events, including the Scottish National Conference and our Annual Conference and Exhibition later in the year. Whichever events you choose to register on, be sure to maintain your CPD online; and when you’re ready to apply for Chartered membership, you will have all your learning documented and ready.
Eira Hammond ChFCIPPdip Chair, CIPP
Hope you find time to read the magazine this month! Yes – for our payroll members, here it goes, year-end once again and hoping there are CEO’s message
these views are particularly important in ensuring we continue to meet the needs of a wide and varied membership base. We will also review the strategic objectives set by the board in April 2017, which included setting out a clearly defined career and roadmap linked to our qualifications portfolio. On the training front, we have moved to a mix of in-house and external trainers, and this mix has facilitated consistency of excellence and quality control process on our materials and presentations. To conclude, it’s been gratifying to see the CIPP has become more inclusive with many organisations, companies and consultancies engaged in promoting our mutual industry in UK plc.
no glitches or reconciliations issues, and all goes smoothly. And of course, going into the next fiscal year, we have changes to automatic enrolment rates and the changes to Scottish taxation, to name just a couple. And still, the belief from many (even today) as a county councillor I spoke to on a recent rail journey remarked, “Don’t you just push a button now”? I did reply politely… It’s also the time of the year when the board of the CIPP set out strategic objectives. This is predicated through our Chartered status in ensuring we act as a standard bearer in payroll, pensions and reward for all our members and the industry at all levels in the UK. In addition, many of you recently completed our market insight survey and that contribution has certainly helped us focus in some areas you have identified. As a membership-driven organisation,
Ken Pullar FCIPP Chief executive officer, CIPP
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| Professional in Payroll, Pensions and Reward |
Issue 39 | April 2018
in Payroll, Pensions & Reward PROFESSI NAL
Also available online at payrollpensionsandreward.org.uk
Contents
April 2018
40
A professional performance
Kavitha Sivasubramaniam discusses staying at the top
Features
16
18
14
Happy new year Kerry Crewe provides advice on a successful tax year-end
Scottish income tax Jill Smith sets out the effects of changes
I did it my way Frank Gallacher bids farewell
20
31
19
Simplification but not modernisation Samantha Mann brings us up to date with PSAs
Pay gap and employee benefits Iain McMath identifies problems and offers advice
Emergency vehicles and tax Duncan Groves dispels myths and clarifies
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 2
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Editor Mike Nicholas 01273 412 836 | editor@cipp.org.uk Advertising Jill Bonehill 0121 712 1033 | advertising@cipp.org.uk Design James Bartlett and Nicole Gumery design@cipp.org.uk Printing Warwick Printing Company Ltd
Gearing up for the gap Lisa Gillespie discusses latest pay gap figures
Pay – performance v talent Ruth Thomas sets out arguments for pay-for-talent approach
34
36
Chief executive officer Ken Pullar FCIPP CIPP board of directors
Termination date, disability, surveillance Nicola Mullineux reviews decisions in three cases
Jason Davenport MCIPP Suzanne Gallagher MCIPP Stuart Hall MCIPPdip Eira Hammond ChFCIPPdip Ros Hendren MSc FCIPP, Mgr, FCMIdip, FHEA Lizabeth Lay MSc FCIPPdip Karen Thomson MSc ChFCIPPdip, FHEA Cliff Vidgeon FCIPP Ian Whyteside MCIPP, FMAAT, ATT
Share the joy Danny Done reveals the government’s shared parental leave campaign
45
44
Useful contacts Membership membership@cipp.org.uk 0121 712 1073 Education education@cipp.org.uk 0121 712 1023 Training admin@cipp.org.uk 0121 712 1063 Events events@cipp.org.uk 0121 712 1013 Marketing and sales marketing@cipp.org.uk 0121 712 1033 General enquiries
Time to put the payroll back into pensions Henry Tapper argues for upgrade to our pension system
Financial education makes sense Alan Morahan explains impact of boosting employees’ comprehension
Regulars
01 Editor’s comment, and Chair’s and CEO’s message 04 Membership insight Five minutes with, On your behalf, Advisory 10 Events Horizon 12 Professional development Diary of a student 13 CIPP update CIPP best to work for, and new training courses Events, news and developments
26 Technology insight 30 Reward news 31 Reward insight 38 Industry news 40 Feature articles
GDPR roundtable – developing best practice
info@cipp.org.uk 0121 712 1000
cipp.org.uk @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 2018. 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.
A good payroll professional
44 Pensions insight 52 Confessions of a payroll manager
15 Payroll news 16 Payroll insight
Additional online content 22 Begin with the end in sight 25 World Health Day
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| Professional in Payroll, Pensions and Reward |
Issue 39 | April 2018
MEMBERSHIP INSIGHT
Suzanne Gallagher MCIPP, Head of operations at Armstrong Watson LLP 5 minutes with…
nothing is impossible. The 2018 elections are coming up so be brave and go for it. What do you think you can bring to the future strategy of the CIPP? At Armstrong Watson not only am I involved in blue-sky thinking and strategic areas of the business, I am also very much aware of what needs to be done operationally. I know the pressures the staff are under on a daily basis and the work that needs to get done, but also their ambitions and how they want to grow. I want to support the CIPP as it looks at how we can better serve those members where perhaps the Master of Science or Foundation Degree isn’t accessible for them for whatever reason. We need to be a smart and a more encompassing institute and we absolutely must embrace the new age of artificial intelligence (AI) which is coming whether we like it or not. What does the future hold for the future of payroll, pensions and reward? In one word, change. This isn’t something new to payroll, as we have dealt with it our whole careers. We won’t be processing payrolls as such in the future, more having conversations with the payroll AI bot that is doing it for us. So, in the spirit of embracing the future, can anyone come up with the new name of the CIPP Siri app equivalent? n
Tell us about your career and background in payroll You know that cliché of falling into payroll by accident? Well, it applies to me, too. I was studying a management course at a local college, and as part of my studies was placed at Granada services for work- placement in the human resources (HR) and wages office. They were going through the seasonal recruiting process and I offered to stay late over the period to help them out. By the end of the week they had offered me the position of HR/wages clerk and the payroll bug took hold. I have been with my current employer Armstrong Watson for more years than I care to remember; and have worked my way up from payroll admin to head of operations. Back then we had three employees and less than fifty small payrolls to run; now we are well over 1,000 payrolls and more than twenty staff. When did you first become involved with the CIPP? I remember becoming vaguely aware of the CIPP back in the early 2000s, and was so excited to find there was an organisation
dedicated to payroll. Generally, us payroll people back then were a solitary quiet bunch that just got on with the job in hand. So, finding this payroll organisation that gave us a unified voice was quite a revelation for me. Since then I have been an avid supporter and through CIPP created our Payroll Quality Partnership programme which we were accredited in 2009. This helped with our recruitment process as I could then offer as part of our remuneration package the foundation degree to help attract candidates, which it certainly did. What does being appointed to the board mean to you? Seriously, it still hasn’t really sunk in. I was still shaking two weeks after I had been told. From my perspective I am just a ‘normal’ payroll person. I have no fancy letters after my name – a bit jealous – as I can’t yet apply for Chartered membership. I decided it was all about pushing myself out of my comfort zone and hoping that the members may see some similarities with themselves. Now I have been voted onto the board I would like members to be able to see that
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 4
Policy hub
On your behalf
Policy team update
Diana Bruce MCIPPdip, CIPP senior policy liaison officer, provides an update on several significant developments
Payslips and hours worked From April 2019 employers will be required to include on payslips 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. The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 (‘the Order’) (http://bit. ly/2EcqgEu) was laid before parliament on 8 February 2018 and comes into force on 6 April 2019. This instrument amends section 8 of the Employment Rights Act 1996, adding to the list of particulars that must be included in the itemised pay statement which an employee has a right to be given. The amendment requires an itemised pay statement to also contain information regarding 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. The amendment states: “…where the amount of wages or salary varies by reference to time worked, the total number of hours worked in respect of the variable amount of wages or salary either as (i) a single aggregate figure, or (ii) separate figures for different types of work or different rates of pay.”
paid in respect of a period of work which commences before the Order comes into force. ...minimalistic wording in the Order will need to be bolstered by good, clear, unambiguous guidance... The CIPP policy and research team, together with members that span all specialisms within payroll, have been working with the department for Business, Energy and Industrial Strategy (BEIS) on this proposal throughout 2017. As part of that work and on behalf of BEIS we have published two surveys to members and the wider payroll profession, as we believed that it was vital that BEIS were in full possession of all the facts, views and experiences when discussing the issue with members and in advance of producing legislative change. The results showed that a slight majority of respondents already provided this information on their payslips; however, a significant number did not, nor were they sure whether their software would enable them to do this. The somewhat minimalistic wording in the Order will need to be bolstered by good, clear, unambiguous guidance and we remain committed to working with
BEIS to ensure its timely and accurate production ahead of April 2019, to enable software developers and employers, through their payroll professionals, to be ready to comply with this tight timescale. The CIPP continue to support employers as they seek to comply with an obligation which will bring undoubted additional burdens for many in the payroll profession and have formed a Policy Think Tank to discuss the practicalities of this new requirement with vested stakeholders. This year promises to be an extremely busy year in many areas of pay and reward, and we thank members and the wider profession in advance for their constructive commitment to dealing with this change.
The amendments made by the Order do not apply in relation to wages or salary
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| Professional in Payroll, Pensions and Reward |
Issue 39 | April 2018
MEMBERSHIP INSIGHT
TFC implementation advisory forum STOP PRESS: Please note that on Tuesday 13 March Members of Parliament voted in the House of Commons to postpone by six months the date when ESC schemes will be closed to new entrants. As from 6 April 2018, employer-supported childcare (ESC) schemes in the form of childcare vouchers will be closed to new entrants. The employer and employee will need to have enacted a scheme (i.e. vouchers must have been provided by 6 April). It would be insufficient for parents, new to the scheme, to have put a marker down before 6 April 2018 to convert into use of their employer’s scheme later in the next tax year. Samantha Mann, CIPP’s senior policy and research officer, attended the tax-free childcare (TFC) implementation advisory forum in January. In advance of the meeting we had asked whether there were any specific issues that would be useful to raise on behalf of service providers and agents in relation to the employment of nannies for parents who plan to open a TFC account for their child or each of their children. Unsurprisingly the response confirmed our belief that an awful lot of calls to the helpline could be saved if only HM Revenue & Customs (HMRC) were able to build in better guidance on TFC, which service providers could then use in their own literature. Lack of detailed technical guidance has been a constant criticism levelled at HMRC as we have seen TFC rolled out. The policy team, together with other stakeholders, continue to lobby for improvements in this space. In view of this deficiency, we
information to hand and the system can provide an instant eligibility response (i.e. the data input rings true with HMRC data checks). They may, however, receive a response which would suggest that more checks need to be made or equally they may receive an instant fail response. It is no secret that there have been significant teething problems with the online service and many fixes have been, and continue to be, put in place; however, HMRC report an improving picture on service delivery. If problems do occur the helpline number is 0300 123 4097. As with any other helpline the quality of service can depend on the experience level of the member of staff answering. The number of staff on the helpline has increased to meet demand as the service has been rolled out. What information do our clients need to start the process? GOV.UK tells us that the parent and their partner (where they have one) will need their: National Insurance number; unique taxpayer reference if they are self- employed; date they started work, or are due to start; and, full details of any other government support currently in place. The Low Income Tax Reform Group (LITRG) has provided some useful information that working parents may find helpful – see https://goo.gl/bSYqaE – and, like us, the LITRG keep lobbying for more guidance. How long does it take to set up a nanny as a recipient? Assuming the nanny is already ‘approved or registered’, she will need a code which will have been in the invitation letter sent out to registered childcare providers by HMRC. If they have mislaid this they will need to contact HMRC on 0300 123 4097 for another code/user ID. Equally, if they didn’t get a letter and they are registered they should also contact the helpline. HMRC has been working with large agencies to process their nannies but this is work that is ongoing. The parent will search for their nanny using their reference number and postcode (no space in between the two). The nanny will also need her bank account details and National Insurance
thought it might be useful to share the following recent email content from a member who provides a payroll service to domestic employers of nannies as it summarises some key elements that all members might find useful. Who is excluded from tax free childcare? Working parents in receipt of tax credits or universal credit will not be eligible; parents working less than sixteen hours a week, although the self-employed in their first year of business have certain allowance built in; a parent earning in excess of £100,000 per year and those in receipt of employer-supported childcare (ESC), albeit they have until their first reconfirmation to issue a childcare account notice to their employer. The online calculator aims to provide help for working parents to decide which would prove to be more beneficial to them. ...Lack of detailed technical guidance has been a constant criticism levelled at HMRC... What is a childcare account notice? A childcare account notice notifies the employer that the employee wishes to withdraw from the scheme. It can take any written form but needs to notify the employer that they wish to withdraw from the scheme. If the parent chooses to stay in ESC they would need to repay any top up received in the first quarter. How long does it take to set up an account online? It should be an almost instant process (twenty minutes according to GOV.UK) once the identification verification process is complete. This is a process that should be familiar to anyone who has accessed their personal tax account or logged on to check their business account as the process is consistent across all HMRC online services now. However, the almost instant process assumes that the parent has all the
number and the official line is that it should take about ten minutes to
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 6
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Policy hub
complete registrations – but again verification is needed which can affect the time taken to register. How long does the transfer take to reach the nanny’s bank account? Assuming there are sufficient cleared funds in the account then three working days as per BACs frequency. Based on anecdotal commentary this doesn’t always seem to be the case and there may be other reasons for causing a delay to the ‘three working days’. For example, where a parent has un-cleared funds in their TFC online account as a result of a debit card top up failing from the payee’s bank account, the payment will bounce back and that will cause a further delay; bank holidays and other non-working days (as we in payroll well-know, but parents may not be so familiar with) will also affect the duration for payments, not only coming out of the TFC account but also going in to the TFC account from the payee’s account. Having sufficient cleared funds is the key to a successful payment achieving the target of three working days. How long does it take for the payment for PAYE (pay as you earn) remittances, falling due as a result of paying the nanny, to reach HMRC’s account? Three to five working days if there are cleared funds. Stakeholders continue to lobby for the TFC service to also have a faster payment option identical to that found in our normal bank accounts; this suggestion is being explored. GPG reporting experiences As we reach the end of the first year of gender pay gap (GPG) reporting, the policy team has been doing some research with members and the wider payroll community to find out more about what your experience has been over the last year or so, both as you prepared for the first snapshot dates and then as you worked with your payroll data to calculate each figure and subsequently report the results. We held a Policy Think Tank back in February on this subject and we were delighted with the number of people who had an interest in the subject and wanted to attend. To ensure that we provided the opportunity to all who couldn’t attend, to
share thoughts and experiences, we also published an online survey which was available to all through our website and social media channels. We specifically wanted the perspective of the payroll professional who serves the reporting employer, and of course there are many different areas of expertise that are called upon to comply with GPG reporting: software development, in-house payroll professional, specialist payroll bureaux, accountant or bookkeeper, consultancy, training and education, technical author – and the list goes on. Our particular interest was to hear what the positives, negatives and lessons learned have been from this first year, and what plans have been made going forward to reporting for the second year. Whilst recognising that it is still early days, we were also looking to discover what the impact or perceived impact has been to an organisation as a result of the publication of their figures. ...many different areas of expertise
Spring enrolments now open
that are called upon to comply with GPG reporting...
We have published a white paper on our findings which is available on the CIPP website. We would like to thank all those who took the time, in whatever form, to contribute; your input formed the most valuable part of our research. n
Delivered in conjunction with
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Call: 0121 712 1023 Live chat with us
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Issue 39 | April 2018
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*correct at time of publication
MEMBERSHIP INSIGHT
in advance is that tax allowances for the holiday weeks are applied separately. For example, holiday pay paid in week 29 will have tax allowances for weeks 30 and 31 applied. However, as it is week 52 this is not possible. An employee can only receive personal tax allowances for the tax year to a maximum of 52 weeks. The employer cannot apply tax allowances from a future tax year to a prior one; therefore, an employee being advanced holiday pay in week 52 could be pushed into a higher tax bracket. It may not be in the best interest of the employee to do this. If employees are really determined to take advance holiday pay at year end, and the employer is willing to do this, the payroll department cannot override the tax deducted. Your software will correctly apply one pay period’s allowance for the whole payment, instead of applying three weeks’ allowances. Q: We are currently changing our payroll software and propose to change the pay frequency from four-weekly to monthly. The final four-weekly pay day is 7 March (tax week 48) and the monthly payroll will be paid on 31 March (month 12). Both payments are in the same tax month (6 March to 5 April). Can you please explain how the PAYE and class 1 NICs should be calculated for this situation? A: As the company plans to calculate a weekly payment in March and is then going to calculate a monthly payment at the end of March you would have to aggregate the earnings for both periods to work out the NICs due for the monthly pay period. To calculate the amount of NICs which should be deducted from the employee’s monthly salary, subtract the amount they paid in week 48 from the aggregated calculation and the residue is deducted from the month 12 payment. As you are only changing the pay frequency you would use the current tax code, the taxable pay to date, and tax paid from the four-weekly payroll. You then calculate the tax due for month 12. As they have already had their tax allowances on the four-weekly payroll, they may pay more tax than normal (depending on which tax bracket they fall into). HMRC provide guidance on the changes to pay frequencies within the CWG2 guidance – Employer Further Guide to PAYE
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m.
to 4.30p.m. on Fridays. It is free to all CIPP members * , students and attendees of approved CIPP courses and conferences in the last six months. Call 0121 712 1099 , email advisory.service@cipp.org.uk or visit cipp.org.uk for frequently asked questions.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: I work for a payroll bureau and some of our clients are directors of small businesses and are always paid the maximum weekly or monthly pay that they can receive before their salary would be subject to pay as you earn (PAYE) or class 1 National Insurance contributions (NICs). Can you please advise me on the thresholds for the new tax year? A: The thresholds for the tax year 2018–19 can be found on the GOV.UK website at https://goo.gl/AJBsga and the amount an employee can earn before paying tax at the basic rate is £228.00 per week and £988.00 per month, based on £11,850.00 tax free pay per year. The NICs thresholds are as follows: lower earnings level is £116.00 per week, £503.00 per month and £6,032.00 per annum. Q: My question is regarding the General Data Protection Regulation (GDPR) that comes into effect on 25 May 2018. We email PDF payslips to employees and if any employee requests a duplicate we currently charge a small admin fee. Once GDPR comes into force can we still charge this admin fee? A: The Information Commissioner’s Office (ICO) states (see https://goo.gl/ rPY7Fy): “You must provide a copy of the information free of charge, however, you can charge a ‘reasonable fee’ when a request is manifestly unfounded or excessive, particularly if it is repetitive. You may also charge a reasonable fee to comply with requests for further copies of the same information. This does not mean
that you can charge for all subsequent access requests. The fee must be based on the administrative cost of providing the information.” Q: One of our employees was on holiday outside the UK when they became sick. I would like to enquire if they will still be entitled to statutory sick pay (SSP) for this absence? A : I can confirm that if an employee becomes sick whilst on holiday or leaves the UK while they are off work sick (for example, to go on holiday or visit relatives living abroad), you are still liable to pay SSP during their absence providing you consider their incapacity is genuine, that they meet the earnings test and they have been sick for four consecutive days or more. HM Revenue & Customs’ (HMRC’s) Statutory Payments Manual provides guidance and can be accessed at the following link https://goo.gl/sXUYHW. Q: I have had a request from one of our clients asking if we can make an advance of pay for one of their employees in week 52 for payday 31 March 2018. This is likely to result in the employee being deducted four times the normal amount of tax. I would like to know if our software will apply week 53 for this employee? A: In these circumstances the software won’t apply week 53, as the employee has been paid before 5 April. Anything paid in week 52 will only have one week’s allowance applied. The normal procedure for two weeks’ holiday paid
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 8
Policy hub
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and NICs – which can be found at https:// goo.gl/aVJQDR (see paragraph 1.10). Q: Several employees have queried that their cumulative earnings for the tax year 2017–18 are less than their actual annual salary and I would like advice on how I can explain the answer to these employees? A: You will have to carefully explain that an employee‘s annual salary is based on the first day they are employed by the company to 365 days later and not the tax year/tax basis. For example, a new employee joins the company on 22 August 2017, so the end of their contractual year will be 21 August 2018. To check whether the employee has received the correct annual salary, add together August 2017 pro-rata pay, then the monthly salary for the next ten months and lastly the pro-rata pay for August 2018. Q: We have an employee who has requested a loan of £1,500, which has been agreed by our human resources (HR) team and passed through to payroll to process. Are you able to advise how this would be treated in regard to benefits in kind (BiKs)? A: An employer can provide loans to their employees with no reporting requirements to HMRC providing they are £10,000 or less. If the total loans over the year are in excess of £10,000, then this will become a reportable BiK and will need to be reported via a P11D return. Please follow this link http://goo.gl/wCqcA7 which offers guidance on reporting requirements when offering loans to employees. Q: As an organisation we offer company cars to certain employees. One of the employees who drives a company car has been involved in a non-fault accident, and it is more than likely that the company car will be written off. The third party insurer has provided our employee with a hire car and so far they have had the hire car for six weeks. Given the length of time the employee has had the hire car should the benefit in kind be switched over to the hire car? A: The guidance from HMRC states the following in regard to replacement cars: “If the normal car is not available for a period of less than thirty days, there is no reduction because the car is not deemed
to be ‘unavailable’ during that period. If during that period the employee is provided with a replacement car, it is not also charged as a benefit if it is not: (a) materially better than the normal car, or (b) provided as part of an arrangement whose purpose was to provide the employee with a materially better car then the normal car.” Taking this guidance from HMRC on board, the car has now been provided in excess of the thirty-day period so you would need to report the replacement vehicle details if the replacement car is ‘materially better than the normal car’. Q: I have an employee for whom we are currently making a deduction for a Scottish earnings arrestment (SEA). We have now received an additional SEA from a different creditor and the employee has stated to us that we are legally only able to process one of the SEAs as a deduction through the payroll. I have not heard of this before and I wondered if this was correct. A: Scottish attachments of earnings are slightly different to attachments of earnings orders within England and Wales. In Scotland, an attachment of earnings is called an earnings arrestment. SEAs require the employer (like in England and Wales) to make deductions from the employee’s earnings every pay day until the debt is repaid in full. A single creditor may enforce payment of more than one debt payable to them by the same debtor by means of a single SEA. If an employee (as in this scenario) has two SEAs payable by different creditors, you will be unable to operate/action both: you will continue to action the first one received but unable to action the second one. The creditor of the second SEA will have to contact the courts to apply for a conjoined arrestment order (CAO). By doing this it will allow both creditors to enforce more than one earnings arrestment at the same time. Our advice in your situation would be to return the second SEA to the creditor and advise them that they will need to apply for a CAO as you are already enforcing a SEA for this employee from another creditor. As previously stated, you should continue to deduct monies for the first SEA until you receive further notification of a CAO. n
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Issue 39 | April 2018
| Professional in Payroll, Pensions and Reward |
Full details of events and training courses can be found at cipp.org.uk or you can email info@cipp.org.uk for more information. Events Horizon Scottish National Conference and Exhibition 5-6 September 2018 The only payroll conference in Scotland is the perfect opportunity to hear the latest legislative changes, meet a range of exhibitors and network with like-minded professionals. Why should I attend? ● Learn about the key changes to payroll and pensions legislation ● Network with other local members ● Ensure you are on the right track to achieve your CPD
Accommodation and networking dinner is provided on Wednesday 5 September.
For more information please call 0121 712 1013 , or to book your place please visit payrollevents.org.uk or email events@cipp.org.uk
Training courses
Course
Date *
Location
Course
Date *
Location
London
16 April
Belfast
18 April
Apprenticeship levy and funding
Solihull
24 May
Solihull
19 April 24 April
Payroll and HR legislation update
London Solihull
Manchester
11 April 11 May 16 May 16 April
General Data Protection Regulation
London
1 May
Leeds
Leeds
15 May
Salary sacrifice and other optional remuneration arrangements
London
Solihull
17 April
Online
Gender pay gap reporting
4 May
Leeds
17 May
Solihull London Solihull
24 May
* Dates are subject to change
3 May 5 July
Global mobility key payroll issues
The full list of CIPP training courses can be found at cipp.org.uk/training
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 10
National Forums Exclusive to CIPP members * , the national forums are an excellent opportunity to hear from the policy team, as well as other key speakers, on developments in payroll, pension and reward legislation and the impact the GDPR might have on payroll and HR. This event will also provide an excellent networking opportunity with other CIPP members.
Available dates
London PM London AM
Bristol PM Belfast PM
11 July 12 July 17 July
3 May
10 May 17 May 5 June 28 June
Manchester PM Glasgow PM Newcastle AM
Birmingham PM
CIPP Alumni event 13 June 2018
Online webinar AM
19 July
If you are an affiliate, trial, web user or student member and you’re interested in attending a national forum, please login to ‘My CIPP’ at cipp.org.uk where you can upgrade your membership; or email membership@cipp.org.uk for more information on how to upgrade.
Taking place 13 June 2018 in central London, the CIPP Alumni event is a unique opportunity for Foundation Degree and Diploma students to come together and network, as well as hear from BA and MSc graduates who share insights for the industry from their dissertations.
*applicable levels of membership only. Please be aware that lunch will not be provided.
National MinimumWage and other worker entitlements
One day
This new one-day course is designed to provide delegates with everything they need to know about achieving compliance with the National Minimum Wage Regulations.
This course covers: ● Who is eligible to be paid the minimum wage, including the implications of recent worker status cases ● What pay and hours to include and what to exclude ● How to make the calculations ● How the processes vary for different types of work ● How to apply annual rate increases, including the implications of pay increases on pay structures
● How deductions can affect the calculations ● Interaction of the minimum wage with aspects of the Working ● Time Regulations ● Compliant record-keeping ● Penalties compliance and HMRC’s enforcement powers ● Tips on avoiding the most common errors
Book online at cipp.org.uk/training , email info@cipp.org.uk or call 0121 712 1000 for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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| Professional in Payroll, Pensions and Reward |
Issue 39 | April 2018
PROFESSIONAL DEVELOPMENT INSIGHT
Diary of a student…
colleagues and, more importantly, fellow students. I recall one assignment: I was full of flu; it was new year eve, and I wanted to be getting ready to go out; I was crying at my laptop and my angel (a fellow student) texted me and gave me some pointers. I managed to get the assignment flowing support of everyone and their constant encouragement – oh, and my cousin who became my cleaner. 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, it did influence my decision, and as it’s designed to be done whilst you are working in payroll you know that everyone doing it is in the same boat. This helped when at tutorials and talking through assignments. I would recommend anyone in payroll to register with CIPP as there is so much help available from them. The modules that were of interest to me prior to starting were the management ones and leading a team as these are quite different to everyday payroll. For someone who is thinking about studying for a CIPP qualification what would your advice be to them? Definitely do it, as the experience and knowledge that you gain is invaluable. It is a lot of work so be prepared for this, but it will help you progress in your career. After doing mine I have taken the next step and I’m now training to be a tutor with the CIPP – which shows how much I enjoyed doing it. n from then, and I got my night out. To be honest I don’t think I could have got through it without the
Denise Brown MCIPPDip Payroll Specialist, Arcadis LLP
Can you give us a brief background into your life? I live in a small town with just my cat – but I’m not a crazy cat lady, yet. I spend a lot of time with my parents and enjoy getting out and away with them and visiting new countries. In my free time I like live music, good food and a nice wine. Can you give us an insight into your career and qualifications background? When I finished my A-levels I went to work in a private accountancy practice and started studying towards an accounting qualification. Whilst there I started working on small payrolls and found that I enjoyed this much more than the actual accounts side, so fell into payroll like everyone does. I had a short stint working outside of payroll but drifted back into it. I have been with my current company for three years now and there is always a new project on the go and something new to get to grips with which I find quite exciting as well as sometimes a little daunting. Why did you choose to study the Foundation Degree? When I was looking for this current role I found that most payroll roles were looking for the payroll qualification as desirable. So, after fifteen years on and off in payroll I thought it was about time I had a qualification to show for what I knew. Also, as my role at Arcadis had then become
permanent I decided that it was the time to start as I knew I would get the support that I needed from my manager and colleagues. How important is this degree in relation to your career? You see roles now advertised more and more with the qualification as desirable, so this degree would hopefully give you more chance over other candidates to gain that role. Although I had years of experience it was nice to know when doing my studies that I knew more than I’d thought. People seem to think that payroll is just numbers but it’s much more and with ever-changing legislation keeping up to date is a challenge itself. The knowledge I have gained I can now also use as I progress to become a tutor for the CIPP. The contacts I made along the way have often helped with situations that don’t come up every day. In payroll there is always something different, and when you reach out to colleagues and contacts someone has almost certainly always had to deal with something similar so can help. In the world of payroll people will always help – that’s just what we do. How did you cope with the work life balance and your study? I’m not going to lie, I found this so hard; living on my own trying to study, do housework and see family and friends became very difficult. Luckily for me I had very supportive parents, friends, work
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 12
CIPP update
CIPP update
CIPP in 100 best not-for-profit organisation list THE INSTITUTE is riding high after being named 47th in The Sunday Times top 100 best not-for-profit organisations to work for list after demonstrating its commitment towards staff development. The award acknowledges excellence in workplace engagement and is judged purely on a staff survey – with only the highest level of overall employee engagement qualifying for the top 100. Ken Pullar, CIPP chief executive officer, said: “The CIPP is committed to delivering quality and excellence in everything that we do, aligning us with The Sunday Times top 100. It is only through achieving excellent employee engagement that we are able to deliver quality and excellence in our services to members. The fact that our employees have been engaged enough to respond to the survey, and are motivated and committed to the CIPP mission and values speaks volumes, and I thank them for their hard work and dedication, we could not have achieved this accreditation without them.” Shirley Harris, CIPP head of human resources and payroll, added: “It gives me great joy and pride knowing that we work for an organisation which is so highly regarded. We want our employees to be happy and to not treat their job as just a 9-to-5 which is why our relationship with our employees is so important. We treat everyone as an individual and help nurture and grow talent.” The best companies to work for lists have been recognising excellent employee engagement for almost twenty years. The accreditation programme was modelled on the Michelin Guide star system, which means it stands for quality and excellence.
50% discount off payroll and HR legislation update course THE CIPP is pleased to announce it has extended its range of membership benefits to include a 50% discount off the cost of its payroll and HR legislation update course, making this essential annual update just £235 + VAT for CIPP members * . This unique course is updated every seven days, ensuring that delegates always have access to up to date content. The course builds your expertise and confidence as you will receive detailed explanations and practical information about recent, current and proposed changes in tax, National Insurance contributions, employment law, deductions and statutory payments. The course covers amongst other things: ● the 2018–19 rates, thresholds and other figures announced at autumn budget 2017 ● Welsh income tax from April 2019 ● proposals in Finance Bills 2017–19 ● changes to car benefit charge from 2020 ● tax-free childcare and the end of employer-supported childcare ● plus much more. * Terms apply - visit cipp.org.uk for details
Online GDPR course now available
THE INSTITUTE has launched an online General Data Protection Regulation (GDPR) course, available for members and non-members through its online learning platform. The comprehensive and interactive online course provides: ● the basics of GDPR (narrated presentation lasting 25 minutes) ● a quiz to test your knowledge and understanding following the first presentation ● further information on GDPR and what it means to payroll (narrated presentation of 25 minutes) ● the full course material, available through the CIPP’s online learning portal ● sample policies and procedures ● access to a live webinar delivered by a trainer to allow the delegate to ask questions (date TBC).
For further details of and to book on any CIPP course visit cipp.org.uk/training or email info@cipp.org.uk .
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Issue 39 | April 2018
| Professional in Payroll, Pensions and Reward |
Frank Gallacher FCIPP, industry luminary (and regular letter writer to this magazine), reflects with fondness and pride on his career and the profession, and bids farewell as he enters retirement I did it my way
I left school in 1967 at the age of seventeen, clutching my A- and O-level certificates and applied for a post in the National Health Service (NHS) in Fife, Scotland. I spent a couple of years working in the admin office at West Fife Hospital in Dunfermline which has sadly been replaced by several blocks of flats. Part of my job was to collate the menus from the wards and summarise them for the kitchen staff, so they could prepare the meals for the next day. On one occasion, I ticked the wrong box and Sunday lunch for the entire hospital was steamed fish and fresh vegetables – not the roast beef, roast potatoes, Yorkshire pudding and gravy that most had ordered. Nurse Thomson from the male orthopaedic ward was not at all pleased and came to my office to express her displeasure in no uncertain terms on the Monday morning. Shortly afterwards, however, romance blossomed and we married in 1970. I moved to East Berkshire Health Authority in Windsor as a finance trainee, hoping I would be better at numbers than menus. I was attached firstly to the payroll department as they were short-staffed – and never managed to escape! There followed a spell with Manchester Health Authority before moving to South Lincolnshire Health Authority initially as payroll manager, and subsequently as head of payroll services for the newly created Lincolnshire Shared Services Partnership, serving the whole of Lincolnshire’s NHS Trusts. In 2006, I joined the University of Warwick’s payroll team as project manager – initially on a twelve-month contract – a relationship that has lasted twelve years.
I am grateful to Tal Dhaliwal MCIPPdip, payroll manager at Warwick, for giving me the opportunity to work for one of the top universities in the country. It was an honour to be in the audience when Tal graduated in 2008. During my career, I have served on several national payroll bodies. These included the National SPS Payroll Consortium, the NHS Pensions Agency’s Employers Forum and a working group for the Chartered Institute for Public Finance and Accountants (CIPFA) which set the standards for national vocational qualifications in payroll and pensions. Apart from my time at Warwick University, some of my most memorable experiences in payroll include becoming the first NHS member to sit on the board of directors of the Association of Payroll and Superannuation Administrators (APSA), hosting APSA’s inaugural NHS conference in Birmingham which resulted in a flood of NHS members joining APSA, subsequently becoming APSA’s education director, and overseeing the partnership between APSA, UNISON and CIPFA in providing the first payroll and pensions qualification. It is extremely rewarding for those of us approaching the end of our careers to see young people coming through who have a passion for payroll and pensions and for providing a high level of customer service and professionalism. This is where the Institute plays its part by providing a professional home and a high profile for its members I have seen many changes over the years. When I joined the payroll team at Windsor in the 1970s we used a comptometer to provide our payroll totals
and reconciliations. We had no desktop or laptop computers then, so all payroll staff had to know how to manually calculate gross to net payslips including shift and overtime payments. In terms of where I see payroll and pensions going, I think continued technological advances will see an increase in self-service/self-certification options for employees and a significant decrease in paper. Payroll has historically been hung up on having everything confirmed in writing. As technology has a great impact on how we work those pieces of paper that go from A to B to C finally arriving in the payroll department too late to be actioned that month because it has taken a week for the relevant people to sign it, will no longer exist. I urge the Institute and its members to take up the challenge and drive these issues forward so that payroll and pensions is, and remains, at the leading edge of technology. Regrets? I’ve had a few, but then again, too few to mention. Payroll has been good to me: providing me with a career, the ability to become involved on the national scene, and to make some good friends along the way. There is a saying that ‘behind every successful man there is a good woman’. I wish to pay tribute to my dear wife, Mhoraig, who has supported me all the way throughout my career both in practical terms (always a hot meal on the table and a clean shirt for each new day) but also listening, supporting, and inspiring in equal measure. I wish the Institute and its students, members and fellows every success and happiness in the future. I am confident I’m leaving the profession in safe hands. o
| Professional in Payroll, Pensions and Reward | April 2018 | Issue 39 14
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