Policy hub
share their views came during the Annual Conference when Paul Tucker, partner employment tax at Smith & Williamson, delivered his session on salary sacrifice. Delegates always expect an excellent seminar with Paul and they were encouraged to share their thoughts and views. It was during this session that the subject of fairness was raised, specifically when considering employees who aren’t able to enter in to salary sacrifice schemes and reward arrangements because they are paid at (or very near) the national minimum wage. The impact of the recently introduced national living wage has already seen more employees being taken out of salary sacrifice arrangements and if the predictions, published by the Low Pay Commission come to fruition, this number will increase. Nevertheless, the timetable once again proved to be a huge area of concern along with concerns about the impact of the proposals on administrative simplicity. If change is to happen, and I don’t think any response we have seen or heard has failed to see the logic behind the need to change, April 2018 should be the earliest implementation date for all of the reasons
effectiveness of the work of the OTS, which would be extremely worrying as HMRC seem to be a significant beneficiary of many, if not all, of the simplification measures. On a final note There has not been a clear steer from members or the wider profession about what impact these proposals will have in affecting change in the behaviour of employers as it relates to their pay and reward arrangements. Some members will come out of any salary sacrifice arrangements as soon as necessary, where their BiKs are not on the ‘in’ list. However, this view is balanced against the belief that many employers will simply take the administrative hit of the additional administrative burden of a process that will see them taxing the greater of the cash equivalent of the BiK (either as per the benefits code or where it would otherwise be exempt), or the actual amount of the salary sacrificed by the employee. They will therefore fund the additional cost in Class 1A NICs, because the value of having a complex reward structure far outweighs the disadvantages brought about by an increasingly complex tax system. n
mentioned above. Albeit we accept a more immediate cut off point, to prevent schemes being promoted ahead of implementation that seek to maximise the benefits of any grandfathering arrangements. ...timetable once again proved to be a huge area of concern... How does this support the simplicity agenda? A note of concern has also been raised about the message being sent, with such a tight timetable, to employers who have already or who are in the process of engaging with voluntary payrolling. Voluntary payrolling proposals have come about as a result of recommendations made by the Office of Tax Simplification, and thus has been developed under the banner of simplification. We observe that HMRC are sending significantly mixed messages about its commitment to simplification measures and risk derailing or at least casting doubt as to the long-term
Counts towards CPD
Payrolling benefits and legislation update Training course
One day duration
This course is aimed at everyone responsible for, or involved with payroll, expenses and benefits or policies within their organisation; whether working in payroll, HR or finance, who need to be updated with this significant change in legislation.
The course covers: l New exemption to replace the dispensation regime l Review current expense policies l New exemption for trivial benefits l Abolition of the £8,500 threshold l Pay as you earn settlement agreements (PSA) l Voluntary payrolling of benefits in kind
For full details or to book your place, please visit cipp.org.uk , email training@cipp.org.uk or call 0121 712 1063
cipp.org.uk
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Issue 26 | December 2016/January 2017
| Professional in Payroll, Pensions and Reward |
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