MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
pension age? We would ensure they still receive payment of at least the (NMW). A: An employee has the right to join a company pension scheme up to the age of 74. From age 75, the tax benefits of being in a pension scheme fall away. As a salary sacrifice is a contractual arrangement, the employee may still wish to make use of the benefits that a salary sacrifice scheme provides. I would, however, advise they seek independent pensions advice to ensure this form of pension saving is suitable.
payroll sections often retain records for six years, plus current tax year. For further information, please view the Regulations here: http://ow.ly/WJnW50NLAIF. The Data Protection Act 2018 also allows data controllers to keep the data if a statutory requirement deems it necessary. Payments of day rates to directors and reporting requirements Q: I have a limited company, with three directors on it. To date, we’ve simply divided any net profits equally at the end of the year. However, this year, we’ve decided to pay ourselves a day rate of £123 for any ad-hoc work we do throughout the year, but this would never amount to more than £5,000 each. We also have other jobs, so this is just one element of our overall income. The annual total of the day rates will always equate to less than the National Insurance contribution (NIC) and tax thresholds, so can we simply record the day rates on our self- assessment tax returns? Or, would we still need to set up a pay as you earn (PAYE) scheme, and make monthly returns to confirm nil payments are due? A: You don’t need to register for PAYE if none of your employees are paid £123 (the lower earnings limit (LEL) for 2023/24) or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records. Also, note, that if any individuals receive benefits in kind, you must register for PAYE. Please see further guidance here: http://ow.ly/QC5w50NLA9G. However, if no payroll is processed, and employees earn between the LEL and the primary threshold, even though there’s no NIC liability, the following issues will arise: l a breach of PAYE regulations l the individuals won’t have a qualifying
What are the rules regarding the £8,000 qualifying relocation costs for couples?
Relocation costs for couples Q: We have a married couple who are relocating as part of their new employment. Would the couple be entitled to claim up to £8,000 qualifying relocation costs for each person, or £8,000 per couple? A: Sections 373 / 374 and Sections 272 / 273 of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003 are silent on the treatment of relocation costs for couples. Therefore, for clarity, the CIPP approached HM Revenue and Customs (HMRC) for guidance regarding this topic. HMRC’s response confirmed there’s no specific guidance in the Employment Income Manual or in ITEPA which makes specific reference to the £8,000 exemption for allowable relocation expenses being restricted to a household. But there are numerous references made to ‘the employee’, so the HMRC view is that the intention of the legislation was always towards the individual. HMRC hasn’t encountered this situation before, but on the rare occasions this does happen, it can see no reason why each individual can’t be entitled to the exemption, where the employer has agreed to reimburse allowable expenses and there’s no duplication of the expenses reimbursed. Salary sacrifice on pensions Q: Can a salary sacrifice be applied to an employee’s pension where the individual is over the state
What should organisations do when leavers ask for their records to be deleted?
Record keeping requirements Q: We’ve been contacted by one of our clients to advise that one of their staff leavers wants to ensure all their information has been deleted on both the client’s system and ours. As we’re required to keep records for six years for HMRC, where do we stand? A: Section 97(8) of the PAYE Regulations 2003 states: “For the purposes of this regulation, an employer must keep, for not less than three years after the end of the tax year to which they relate, all PAYE records which are not required to be sent to the Inland Revenue by other provisions of these Regulations.” The advice here would be to keep records for up to no less than three years plus current tax year, however, if HMRC finds issues (for example, in a compliance check), it could go back up to six years. Where six years’ worth of records aren’t available, HMRC could estimate a charge based upon its findings during an investigation. For this reason,
year for state pension purposes l the qualifying earnings won’t be
| Professional in Payroll, Pensions and Reward | May 2023 | Issue 90 12
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