MEMBERSHIP INSIGHT
tax purposes. There would be a reporting requirement if the loan (together with any other loans the employee has with the employer) was above £10,000.00. GOV.UK provides guidance regarding an employer paying their employee’s company credit card debt which can be found here: https://goo.gl/FWyp3W. Q: A new employee is relocating their home which will be closer to the workplace. The total distance they will be relocating is 17.6 miles and the employee has requested the company pay some of the cost of relocating. Is there a minimum distance that an employee has to move so that an employer can pay an employee relocation costs which would be exempt from tax and NICs? A: It is up to the employer to decide whether they want to assist an employee financially to relocate nearer the workplace. However, the employer has to ensure that they comply with the benefits code set out in the Income Tax (Earnings and Pensions) Act 2003 and treat any financial assistance in the correct manner. Unfortunately, there is nothing in legislation which categorically states a set distance when it comes to the exemption for relocation when an employee moves to a new home nearer to a new work location. It is what would be deemed as unreasonable daily travelling distance between the new workplace and the new residence; as compared to the daily travelling between the new workplace and the old residence. If the employer decides to give the package to the employee, but believes that the distance would not be considered exempt, then it should be reported in a P11D return. Guidance can be found in HMRC’s Employment Income Manual at https://goo.gl/VdCW4X. Q: An employee has said he has more than one job with different companies. As the collective earnings are well over the threshold for Class 1 NICs he believes that he has paid too much primary (employee) NICs and is due a refund from us for the previous (i.e. 2016/17) tax year. He wants the company to repay the excess Class NICs to him. Is he correct? A: From the information provided the employee is referring to deferment of
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Q: We have an employee who was made redundant on 13 April. On 23 April, he put in a statutory paternity leave request to take two weeks of paternity leave from 1 August. As he is no longer employed, does he still have a right to payment for time off and do we still need to pay this as a payment after leaving? A: One of the conditions of taking statutory paternity leave (SPL) and statutory paternity (SPP) is that the person is still employed by the same employer up to and into the time of taking SPL. So, as the employment ceased in April there is no entitlement to SPP or SPL now. GOV. UK has links to HM Revenue & Customs’ (HMRC’s) Statutory Payments Manual . This link confirms that the individual would need to be employed by the company to be eligible for SPL and SPP: https://goo. gl/k7SNQ5. Q: I have a query relating to the BACS hash in the full payment submission. We capture the employees’ net pay from a payroll report and process net amounts as bulk for over a thousand employees. Our bank credits the net amount to the individual’s bank account. Please can you tell me whether there is a compulsory requirement for BACS hash? A: You would only have to generate a hash cross-reference if the employer was paying the employees from the employer’s company bank account which has a BACS Service User Number (SUN). Additionally, employers who use extended transmission service or SwiftNet
transmission service, would also generate a hash cross-reference. If the employer uses another method of payment (other than those mentioned previously), then as the guidance suggests, you don’t generate a hash. GOV.UK guidance, which can be accessed using the links below, relate directly to HMRC’s requirements regarding the hash cross-reference and the data item guide for real time information (RTI): ● https://goo.gl/pVmZn7 – this provides general information and gives guidance on when to use the hash cross-reference ● https://goo.gl/cY3Vgs – this is a list of the data items used in RTI; please view item 118. Q: An employee has a corporate credit card bill consisting of personal items that he is currently repaying to the credit card company in instalments. Due to internal company year-end, the finance team are keen to get this credit card debt paid in full. The plan is for the employer to pay the balance on his behalf and set up a loan repayment plan with the employee. What are the ramifications in regard to tax implications? Would this be deemed as a benefit in kind and should the payment be grossed up or reported in a P11D return? A: Paying off the credit card bill that the employee has run up will mean the employee has had a benefit, and one that would attract Class 1 National Insurance contributions (NICs) liability so you would need to process that part through the payroll, and record in a P11D return for
| Professional in Payroll, Pensions and Reward | November 2017 | Issue 35 6
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