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I think a hero is an ordinary individual who finds strength to persevere and endure in spite of overwhelming obstacles. Christopher Reeve
Editor’s
comment
It’s September, and while that may mean the return to school for many, payroll professionals will be turning their attention to National Payroll Week. This is the opportunity for everyone to celebrate all things payroll, and to reflect on the significant role payroll teams play for their organisations and wider society.
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That’s exactly why the theme of this issue of Professional is ‘the unsung heroes’. There are several articles within the magazine which focus on just how complex payroll is and praise those individuals who work tirelessly to ensure others are paid both accurately and on time, every time. Read about dealing with the constant changes to legislation and guidance, on page 20, and discover why payroll professionals are certified rockstars on page 36. We often discuss how people fall into payroll, but have you considered how many people actively choose it as a career? Flick to page 34 to read the journeys of others, but also to reflect on your own experiences. One of the areas commonly cited as one of the most complex in payroll is that of holiday pay. Read our hot topic article, on page 50, which discusses the outcome of the Supreme Court ruling in the Harpur Trust v Brazel case, and the implications this could have for payroll. We’re also hearing a lot in the pensions sphere at the moment, particularly in relation to collective defined contribution schemes. Turn to page 43 for an update on this fast-moving area.
36
40
47
Lora Murphy ACIPP (editor@cipp.org.uk) Editor
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20 - The times they are a-changing By Fiona Smith
36 - Did you ‘fall’ or did you choose? By payroll professionals
40 - Payroll rockstars By Katie Sharpe
47 - What’s all the fuss about CDCs? By Henry Tapper
54 - Hot topic – It ain’t no holiday… the importance of getting holiday pay right The CIPP’s policy and research team
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| Professional in Payroll, Pensions and Reward |
Issue 83 | September 2022
Chair’s
message
Editor Lora Murphy 0121 712 1018 | lora.murphy@cipp.org.uk Advertising Daniel Cull 0121 712 1021 | advertising@cipp.org.uk Design James Bartlett and Nicole Davis design@cipp.org.uk Printing Acorn Press Ltd
It’s September again, and time to celebrate National Payroll Week (NPW) with payroll professionals, regardless of organisation size, type or industry. Let’s continue to raise our profile by being ambassadors of the profession and assessing the last few years to see how payroll has had to adapt and change.
I’m sure most of you have experienced massive change (the coronavirus job retention scheme, or CJRS, immediately springs to mind). With the introduction of CJRS, and constant changes during its short lifecycle, payroll teams were required to stay alert to understand, decipher and implement the new rules as they were announced. Payroll teams worked many extra hours, at a time when others were being given time off because they couldn’t work. Real time information (RTI) was another big change. How did we manage before RTI, as we now submit pay information to Her Majesty’s Revenue and Customs on a regular basis, balancing and reconciling as we go? The tax year end now passes us by without any major hiccups or months of preparation, planning and worry. With the progress of payrolling of benefits, we can look forward to smoother waters in the future here too. Technology is constantly developing and changing with upgrades to systems, the introduction of the cloud, robotic process automation and the use of bots now moving up the agenda. How many of you continued with the progress of a new system implementation and launched during Covid? That’s testament to the dedication and commitment of payroll professionals. There’s also been massive changes in pensions, with the introduction of automatic enrolment. Although it’s now been in place for several years, some systems (depending on the pension provider) don’t yet fully manage automation. This means some tasks must be completed manually. There are now so many more employees in pension schemes, it’s become the norm and no longer the exception. Happy NPW, enjoy the celebrations and share them with us.
Chief executive officer Ken Pullar FCIPP CIPP board of directors Louise Gray ChMCIPPdip
Stuart Hall MCIPPdip Helen Higson ACIPP
Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA(Hons) FCIPP Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP Katie Sharpe MCIPPdip Cliff Vidgeon BA(Hons) CMA ACG ChFCIPP Clare Warrington MSc FCIPPdip AFHEA
Useful contacts
Education education@cipp.org.uk 0121 712 1023 Events events@cipp.org.uk 0121 712 1013 General enquiries enquiries@cipp.org.uk 0121 712 1000 Marketing and sales marketing@cipp.org.uk 0121 712 1033 Membership membership@cipp.org.uk 0121 712 1073 Training training@cipp.org.uk
Liz Lay MSc FCIPPdip FHEA ACIPD (liz.lay@cipp.org.uk) Chair, CIPP
CEO’s
message Payroll professionals have proved they can work from anywhere, overcome a pandemic and keep everyone paid accurately and on time. So, what better time to celebrate than with the CIPP’s NPW, taking place from 5-9 September 2022?
2021 saw our most successful NPW yet, with over 5,500 packs downloaded and engagement rates at an all-time high. Have you downloaded your pack? There’s still time – go to http://ow.ly/75BY30spk12. Make our payroll presence known by using the promotional items within the downloadable packs, getting involved on social media using #NPW22 and promoting NPW within your workplace. The digital NPW packs are available to all. There’s no limit on how many times you can download, so let’s share with the payroll world and celebrate all the payroll professionals who deserve praise for keeping the UK paid. The CIPP is holding a week of online webinars, bitesize training sessions and discussion groups from our policy team and sponsors. There’s also the future of payroll roundtable discussion, which takes place face-to-face and will feature in a future issue of Professional . Our Advisory team will be holding an advisory clinic on Wednesday 7 September, so send your questions in advance to events@cipp.org.uk. As we close the week on Friday 9 September, we’ll announce our shortlist for the CIPP Annual Excellence Awards 2022. Look out for updates on our social media channels. All these webinars are free to attend, and open to members and non-members, so get booked on, at http://ow.ly/GspG30spk18. This time of year sees the career roadmap developing, as it’s our autumn enrolment for the Foundation Degree in Payroll Management. Ensure you enrol and reap the considerable benefits to both you and your employer.
0121 712 1013 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 2022. The Chartered Institute of Payroll Professionals, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 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 retrieval 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.
Ken Pullar FCIPP (ken.pullar@cipp.org.uk) Chief executive officer, CIPP
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 2
in Payroll, Pensions & Reward PROFESSI NAL Contents September 2022
Also available online at cipp.org.uk
FEATURES
Did you know…? Statutory sick pay
Behind the payroll curtain By Mathew Akrigg
All you need to know about coronavirus job retention scheme compliance By Susan Ball, Carolyn Brown and Paul Marcroft
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13
17
By the CIPP’s policy and research team
HMRC’s one-to-many approach By HMRC’s OTM team
The changing landscape of off payroll working in the public sector By Sudeep Ganguli
For the record By Justine Riccomini
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18
22
Reviewing the Level 3 Payroll Administrator apprenticeship By Ian Holloway
Step aside, payroll giving week, and make way for payroll giving month!
Feature – The unsung heroes By Jerome Smail
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26
30
online exclusive content
How could a workplace savings scheme help your employees? By Kanika Kharbanda Harassment, long Covid, ethical veganism By Nicola Mullineux
Perfect UK payroll professional
“Payroll, it’s just paying people, isn’t it?” By Stewart Waddell
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41
34
required By Nick Day
online exclusive content
Not just the push of a button By Fernanda Prado
Fourthcoming changes to the working week? By Danny Done
46
42
44
REGULARS
01 Editor’s comment 02 Chair’s and CEO’s message 04 CIPP update Events, news and developments 05 My CIPP On your behalf, Payroll news, Industry news, Advisory Q&As, Spotlight on 12 Personal development BePayroll
13 Compliance
47 Pensions
Discussing what goes on behind the scenes in a payroll team and updates in the area of the coronavirus job retention scheme, amongst other things
What are collective defined contribution schemes?
54 Hot topic
What does the Supreme Court ruling on the Harpur Trust v Brazel case mean for payroll?
26 Feature topic
Read all about the theme of the current issue
56 Payroll pets
30 Reward
We say hello to some of your lovely, furry friends
Read the latest updates on payroll apprenticeships and find out why payroll professionals are the best!
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| Professional in Payroll, Pensions and Reward |
Issue 83 | September 2022
CIPP update
Subio collaboration WE’RE DELIGHTED to announce a new collaboration with Subio from July. This means all CIPP members can now benefit from a discount on the Subio product portfolio, allowing you to create a success mindset within your team or organisation. Working across a range of organisations and sectors such as the National Health Service, Mercer, Liaison Group and even the military special forces, Subio has helped individuals and teams create the agility to deliver objectives, projects and goals. A K2S programme will help you build robust plans, but more importantly, will help your team remain aligned in these ever-changing times. For more information, go to the member offers webpage within MyCIPP. Irish payroll helpline COMPLEMENTING THE CIPP’s own Advisory Service, we just wanted to remind you that, through your CIPP membership, you also have access to advice on Irish payroll legislation through IPASS. The partnership provides CIPP members with up to five enquiries a year and you can contact IPASS on +353 1 408 9100, quoting membership number 95408 to access the service.
Association Excellence Awards IN JULY, we learnt we have again been shortlisted for two Association Excellence Awards. This year we’re in the running for ‘UK Association of the Year’ and ‘Best Membership Support Since Covid-19’. We can’t wait to bring you an update following the announcements at the awards ceremony on 14 October 2022, at The Oval in London. Reward Strategy podcast LISTEN TO our chair, Liz Lay, as guest on the Reward Strategy, ‘ Friends in Benefits ’ podcast as she talks to Jade Burke. In this episode, Liz discusses: ● what payroll professionals should explore when it comes to their learning and development ● her tips on how payroll teams can strategise ● thoughts regarding trade union membership.
Emma Dunne, McDonalds, says: “I’ve had a number of occasions where I have had to call on the services of IPASS and found their customer support line to be highly professional, timely and it has assisted me in situations where external expertise was required.” In addition to the partnership with the Advisory Service, IPASS works with the CIPP to deliver Irish payroll training to CIPP members and payroll professionals based in the UK. These can be viewed via the training pages on our website.
THE CIPP’s Payroll Assurance Scheme (PAS) is designed to test payroll processing and compliance, along with people skills and development opportunities. One of the most crucial elements is ensuring business continuity plans are in place and effective, should they be required. Congratulations to all organisations that have achieved this accreditation and been able to put those plans into action. Special congratulations to our recently accredited organisations:
● Gap Personnel Holdings Ltd ● Royal Mail Group Ltd
● Sherwood Forest Hospitals NHS Foundation Trust ● St Helens and Knowsley Teaching Hospitals NHS Trust.
Ken Pullar, CIPP chief executive officer, said: “Congratulations to those organisations that have attained PAS accreditation. They’ve clearly demonstrated their sound payroll processes, knowledge and skills. This is imperative in the payroll profession, as reacting quickly to ever-changing legislation and guidance is crucial.” The PAS is still operating, with assessments currently operating virtually. To find out how the PAS can benefit your organisation, email compliance@cipp.org.uk .
| Professional in Payroll, Pensions and Reward | 4 September 2022 | Issue 83
POLICY HUB
On your behalf
Time never stands still in the world of payroll, and the same is true for the CIPP’s policy and research team . Read on to find out what the team has been up to recently and how you can get involved Policy team update
National Payroll Week (NPW) For payroll professionals, September is, of course, synonymous with NPW. We’re really excited to celebrate the profession – are you? Taking place between 5-9 September 2022, the policy team is involved in several events this year. The whole policy team will be kicking the event off in style, providing you with a legislative update, to discuss the changes we’ve seen so far and to consider what’s still yet to come. Make sure you stay up to date and sign up here: http://ow.ly/ v2bj30spkcf. Our very own policy lead, Samantha O’Sullivan will then be leading a face- to-face discussion regarding the future of payroll later that day. She’ll be asking what new, intriguing developments payroll teams could face in the months and years to come. Net Pay Action Group As you’ll know, the policy team sits on a range of government consultation forums. Several of them relate specifically to pensions, and one of those is the Net Pay Action Group. Policy and research officer, Mathew Akrigg, is the CIPP’s representative on this particular forum. A meeting was held on 25 July to discuss the proposed remedy for the net pay arrangement (NPA) anomaly. The anomaly occurs where individuals who earn above £10,000 (the trigger for automatic enrolment) but below the
current standard personal tax allowance of £12,570, are placed in a NPA pension scheme. It’s intended they receive 20% tax relief as the pension deduction is taken prior to tax being calculated. As they aren’t liable to pay any tax, they don’t end up receiving that relief. Her Majesty’s Revenue and Customs (HMRC) will address the issue by providing a ‘top up’ payment to affected individuals. This will come into force for the tax year 2024/25, with payments made as soon as possible following the tax year the contribution is paid in. The group discussed the proposals and their impacts. Notably, how they interact with universal credit (due to not being a tax refund, but instead a payment), the timescales involved and the legislative framework required. They will be drafting a response to advise HMRC of ways in which the process can be improved. BeKnowledgeable On 16 August, Andy Nicholls, industry liaison manager at The Pensions Regulator, delivered a BeKnowledgeable session. This webinar focused on pensions and automatic enrolment for payroll, and some of the topics covered included:
Thank you to Andy and to all those who joined – we hope you found it as informative as we did. The BeKnowledgeable sessions will be taking a brief hiatus so the policy team can focus on NPW this month, and of course, the Annual Conference in October. Fear not though, as they will return with a bang in November, as we unveil a whole new series for you to enjoy. Do you want to be a payroll celebrity? Yes, this dream could soon become a reality. The editor of Professional , Lora Murphy, is looking for
members to submit articles and to appear in the pages of the December / January issue of this
very publication. The theme is the member takeover , and it’s you guys who will decide the content and direction of that particular issue.
Is there a notable technical area of payroll you’d love to write about, or a recent development that really caught your attention? We’d love to hear from you. Contact Lora Murphy, our editor, at editor@cipp.org.uk , to request further details and to discuss potential pieces to go in the magazine. We can’t wait for you to have your say and get involved. n
● who to enrol ● opt-in / join ● opt-out ● postponement ● exceptions ● worker communications.
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| Professional in Payroll, Pensions and Reward |
Issue 83 | September 2022
PAYROLL NEWS
Payroll news
Supreme Court ruling on Harpur Trust v Brazel ruling ON 20 July 2022, THE Supreme Court issued its long-awaited ruling on the Harpur Trust v Brazel case. Harpur Trust’s appeal has been unanimously dismissed, meaning that the 52-week method is the correct interpretation of legislation concerning holiday pay. Therefore, no percentage method (12.07% or otherwise) should be used for the purposes of calculating holiday pay. Brazel was a part-time music teacher, who worked varying hours throughout the year. Her employer used the 12.07% calculation method to pay her when she took holiday. Brazel refuted this, as the legislation at the time was to use a reference period of 12 calendar weeks to calculate the holiday due. (This has since changed to a 52-week reference period.) The Court of Appeal found Brazel to be correct, and the Supreme Court has backed this judgment. Those processing payroll for casual workers, or workers whose pay fluctuates, need to be mindful of this ruling and ensure they proceed with paying holiday pay correctly and compliantly.
Introduction of digital PSA1 form WITHIN ITS Agent Update 98 , Her Majesty’s Revenue and Customs (HMRC) confirmed the creation of a new digital pay as you earn (PAYE) settlement agreement (PSA) form. The form has been created based on customer feedback and provides a more efficient submission route. HMRC has confirmed this is now its preferred method of receiving the PSA1 from employers. The benefits of using this method include: ● easy, standardised reporting ● improved accuracy ● speedier processing times ● fewer resulting queries. The Agent Update 98 can be located here: http://ow.ly/kgOR30sprmg, and the digital PSA1 form, here: http://ow.ly/KoT230sprmm.
HMRC health and social care levy tool launched
Increases to interest and inflation rates WE CONTINUE to see the cost-of-living crisis discussed in the media. On 20 July 2022, the Office of National Statistics released its monthly inflation statistics, to show that June’s consumer price index, or CPI, was at 9.4%. This is an increase of 0.3% from May to June 2022, following a 0.1% increase from April to May 2022. The June figure is the highest recorded annual inflation rate since January 1997, which is when record keeping in this area began. View the inflation statistics here: http://ow.ly/8hz830sprnQ. The Bank of England sets interest rates as part of the plan for keeping inflation at its target level of 2%. On 4 August 2022, the bank rate was increased to 1.75%, which is a jump of 0.5 percentage points. This is the highest the rate has been since 2009, and the next date this is set to be reviewed is 15 September 2022. You can read more about this here: http://ow.ly/LcR230sprpk.
A NEW interactive guidance tool has been made available online, for individuals to use to establish if they should be paying the health and social care levy in tax year 2022/23. The tool uses a variety of multiple-choice questions to determine whether you’re an employee, employer or a self-employed individual. It enquires about your level of earnings, and whether you’re above or below state pension age. It then advises if you should be paying the health and social care levy in tax year 2022/23 or not. The tool can be accessed here: http://ow.ly/ tnIF30sprBJ.
Diary dates
5 September
Last day of tax month 5
6 September
First day of tax month 6
5-9 September
National Payroll Week
Last day for submitting a real time information employer payment summary to apply to tax month 5 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method
19 September
22 September
Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method
5 October 6 October
Last day of tax month 6 First day of tax month 7
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 6
INDUSTRY NEWS One hour skills boosting courses One hour e-learning courses for only £99 +VAT
Industry news
Experian acquires PayDashboard and Work Report TM Experian, the world’s leading global information services company, has acquired PayDashboard – the cloud payslip provider, and Work Report TM , an employment verification solution. The acquisition forms part of a wider strategy to facilitate easier access to payslip data for improved financial well-being for consumers. Created in partnership with Salary Finance, Sage, Zellis and IRIS, Work Report TM enables employees to securely share their payroll data with a lender in minutes to verify their employment and income when applying for a loan. PayDashboard will continue the status quo as a cloud payslip provider to payroll providers and businesses, but increased investment will see an accelerated demand for a truly digital payday experience that will encapsulate the other services offered by Experian. Visit the Experian website: https://rb.gy/xqz7sd and the PayDashboard website: https://rb.gy/564fy5.
One CPD point per course
Calculating income tax
Calculating Statutory Sick Pay (SSP)
Deel launches Global Payroll DEEL, THE cloud-based payroll and compliance software has launched its fully managed Global Payroll product. This will aim to simplify some of the complicated and resource-heavy processes employers who have staff in multiple countries must carry out. The software has arrived at a time when remote jobs are soaring in popularity. Deel has witnessed a 76% increase in London-based workers starting remote roles in the last six months, when compared to the previous six months. The most popular role taken is software engineer, then software developer, followed by customer support. This pattern isn’t restricted to the UK and is also being seen in other countries. For example, there’s been a 92% increase in Buenos Aires-based workers taking remote roles in the last six months, and a 104% increase in Madrid- based workers. By having all global staff on one platform, employers can make data-driven decisions regarding payroll. There’s standardised reporting for all worker classifications,
Calculating National Insurance Contributions
locations and roles. The dashboard is available across 90 countries. You can access Deel’s website here: http://ow.ly/Yt9u30spAO7.
Paying Statutory Maternity Pay (SMP)
Cintra announces launch of new cloud-based human resource (HR) platform PAYROLL AND HR software developer, Cintra, has announced the launch of its new cloud-based HR platform, Cintra HR. It’s powered by intelliHR. The product was unveiled at Cintra’s annual customer conference and was developed as part of Cintra’s ongoing £3.5 million investment in its software product set. Cintra is part of the Payroll Software and Services Group (PSSG). Chief executive officer of PSSG, Eric Dunmore, said: “Cintra has long understood the importance of a single supplier relationship. In a constantly evolving world, our next generation payroll and HR platform will now help organisations turn insights into opportunities enabling better decision making and results. As an award-winning payroll specialist, it was important for us to partner with a similar best in breed supplier. With intelliHR’s great customer interface, functionality and analytics, we believe we can offer something unique, that sets ourselves apart from the competition”. You can visit Cintra’s website here: http://ow.ly/9gjz30spARj.
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| Professional in Payroll, Pensions and Reward |
Issue 83 | September 2022
MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Reporting the value of cash and gift incentive awards Q: I have a couple of questions in relation to a new scheme we’re setting up to provide cash, and gift, incentive awards to some of our employees. I think the cash should be paid through payroll, but I’m not sure how to report the value of the gifts (watches, iPads, iPhones etc). A: You’re correct. The only correct treatment of the cash incentive is to process it via payroll, subject to income tax and class 1 National Insurance contributions (NICs). The non-cash award must be reported in one of three ways: ● report the cost of the benefit on P11D for tax and class 1A NICs purposes, or ● payroll the benefit for tax purposes and report the class 1A NICs due on form P11D(b), or ● apply for a pay as you earn (PAYE) settlement agreement (PSA) with Her Majesty’s Revenue and Customs (HMRC). The payrolling of new benefit provisions Q: We currently payroll medical benefits and have done for several years. How, and when, should I add a new type of benefit provision that I want to payroll? We’re proposing to implement this new benefit offering on an automatic opt-in basis, with the option for employees to opt out. Our target implementation date is 1 September 2022. A: When offering a brand-new benefit that hasn’t been offered to employees
and including the QW). The AWE must not be less than the lower earnings level for NI. So, the Switzerland employment service isn’t taken into consideration when establishing eligibility for SMP in the UK as no class 1 liability arose. See Section 164 of the Social Security Contributions Act 1992 here: http://ow.ly/ QXaO30soHgu. Late automatic enrolment into a pension scheme Q: I have discovered an employee who should have been automatically enrolled into the pension scheme in June 2021 but got missed. I have calculated the total employee and employer underpayment, and will automatically enrol the employee this month and pay over the total amount to our pension provider. What’s the legal position for recovering the employee contributions from the individual? A: The Pensions Regulator (TPR) provides guidance for circumstances such as this. If you’re late enrolling an employee, TPR requires you to pay back any missed contributions to put staff in the position they would have been in if you had complied on time. When backdating contributions, you must pay all the unpaid employer contributions and your employee must pay theirs, unless you choose to pay it for them. As part of any enforcement action, TPR may require that you pay your employee’s contributions as well as your own. Lawfully, you can enter communications with your employee to arrange a mutually agreeable repayment plan, or you
before, payrolling can start mid-year i.e., from the start date of the new benefit provision, if they’re already registered to payroll benefits. This must be added to your selection of benefits being payrolled using the payrolling benefits and expenses online service. This can be accessed here: http://ow.ly/jpiN30soH5e. However, it’s no longer lawful to use an automatic opt-in process. Following the introduction of the General Data Protection Regulation (GDPR) in May 2018, the UK GDPR set a high standard for consent, which must be unambiguous and involve a clear affirmative action. It specifically banned pre-ticked opt-in boxes. It’s necessary to obtain written agreement from these employees prior to the provision of the benefit and the deduction of tax on the benefit. Entitlement to statutory maternity pay (SMP) Q: An employee joined our UK entity on 1 April 2022, so has short service on our UK payroll. However, they were previously employed for two years by our Switzerland entity prior to coming to the UK. Does this count as continuous service for SMP purposes? A: For an employee to qualify for SMP, there are two qualifying conditions to meet. They must: ● have been continuously employed with an employer in the UK for 26 weeks by the end of the qualifying week (QW), and ● have average weekly earnings (AWE) that are subject to class 1 NICs liability, in the relevant period (the eight weeks up to
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 8
ONLINE LEARNING
POLICY HUB
Holiday pay and leave
Record keeping requirements Q: In relation to HMRC statutory reporting requirements, I understand that records should be kept for a minimum of three years. We’re currently in the process of transitioning our payroll from one vendor to another and would like to know which key reports we should retain. Is there a list of specific reports that should be kept? A: No, HMRC doesn’t provide a specific list of reports to be kept. HMRC says you must be able to show them you have provided accurate reporting, and you need to keep those records for three years from the end of the tax year they relate to. Consequently, you must be able to provide the following if requested: ● what you paid to your employees and details of the deductions made from those payments ● copies of the reports sent to HMRC (full payment submission, employer payment summary, P11D, P11D(b)) ● records of payments made to HMRC ● records of any employee leave and sickness absences ● tax code and student loan notifications ● details of all taxable expenses and benefits given to employees ● payroll giving scheme documents, including the agency contract and employee authorisation forms. Records for HMRC aren’t the only records that should be kept. For example, you’ll also need to keep records to prove that you’ve paid the correct minimum wage to your employees and to demonstrate you have satisfied TPR’s requirements for automatic enrolment. See: http://ow.ly/bKUN30soHhr. Paying employees who are leaving for their untaken annual leave Q: I have a client who doesn’t want to pay a leaving employee for their untaken leave. Can they do this? A: No, they cannot do this. An employer must make a payment for any unused accrued statutory holiday when a contract of employment ends, regardless of the reason for the termination. However, if an employer offers more than the statutory minimum of 5.6 weeks’ annual leave, they can agree separate arrangements for the extra leave. See: http://ow.ly/ ESw430soHiF. n
could consider offering to pay their past contributions for them as a goodwill gesture. Tax implications of providing gift baskets for long service Q: Can you please tell me what the tax implications are if we provide service awards in the form of gift baskets to our employees in the UK? Also, is it mandatory that we use UK vendors for the provision of the baskets? A: There’s a tax exemption for the provision of a gift in recognition of long service, laid out in Income Tax (Earnings and Pensions) Act 2003 Section 323. The legislation states: ● you are able to give an employee a gift (tangible moveable property, i.e., a gift basket) to mark no less than 20 years of service ● the gift may not exceed the value of £50 for each year of service. See: http://ow.ly/6ZE030spAgb and http://ow.ly/6xnb30spAgh. If you wish to provide a service award to an employee with less than 20 years’ service, the above tax exemption won’t apply. The tax and NICs implications in this instance are based on the cost to the employer of its provision. Your choices are as follows: ● report the amount of the benefit on P11D for tax and class 1A NICs purposes, or ● payroll the benefit for tax purposes and report the class 1A NICs due on form P11D(b), or ● apply for a PSA agreement with HMRC. Please note that, even if the value of the benefit costs you £50 or less, it cannot be treated as a trivial benefit. It’s a reward for service, which is one of the trivial benefit exclusions. There’s no requirement for you to use UK-only vendors for the provision of gift baskets.
Duration One half day
CPD 3 points
Case law continually produces changes to employees’ statutory holiday leave and pay entitlement, which are covered in this informative course, along with the various types of leave and the calculation of pay.
Visit cipp.org.uk/training to book your place
What are the tax implications of providing awards for long service to employees in the form of gift baskets?
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| Professional in Payroll, Pensions and Reward |
Issue 83 | September 2022
MY CIPP
Spotlight on... Design team
James Bartlett
Nicole Davis
Tell us a little bit about your careers and background. The CIPP’s design team consists of two members: James Bartlett, creative manager and Nicole Davis, internal designer. James Bartlett : I studied media production at both college and university. I initially found myself working as a freelance videographer and editor for a small production company, which included a stint as an editing assistant for a Greek cooking show. I realised it was the graphic design side of these productions I enjoyed. I started at the CIPP in 2009 as a part-time administrator in the marketing team, as the CIPP was looking at bringing design in-house. I applied for, and became, the internal designer in 2010, gradually absorbing design work from our external agencies. I hired Nicole in 2015 to support the ever-increasing list of tasks. Nicole Davies : I studied graphic design at university and started working at the CIPP as a temporary design intern immediately after graduating. I was later employed on a permanent basis. I began assisting with the day-to-day design tasks and then moved to producing Professional magazine as my main responsibility. What are your day-to-day duties at the CIPP? Most public-facing communications or materials from the CIPP pass through the design team at some point. Our day-to-day jobs can be small, like creating enrolment and bookings forms, certificates, stationery, promotional items and completing website updates. There are also bigger tasks, like our prospectus, all the collateral for our events programme, and, of course, the magazine you’re reading now. The design team is small and the CIPP has many departments and services to support so it’s always busy.
What do your roles mean to you? Payroll is a complicated subject and the CIPP offers many products and services with technically heavy content. We aim to design materials which explain these difficult areas in an understandable way so members and customers can stay up to date with what’s going on in the industry. Payroll is deeply misunderstood and criminally underappreciated. We all want to be paid for the work we do, and errors in pay can be distressing. Payroll professionals are keeping people across the UK paid while adapting to ever-changing guidance and legislation. For us to be part of an organisation which is shedding light on these unsung heroes makes us very proud. The CIPP is here to support members, and the industry in any way it can. It’s so rewarding to know we’re playing even a small part in that. You’ve been heavily involved in our #BePayroll and payroll careers campaigns. How do you think they both inspire the payroll profession? Both campaigns put a spotlight on payroll professionals on a personal level. The #BePayroll campaign asks, ‘ what makes a payroll professional? ’. We wanted to show real members and the attributes they, and other payroll professionals, possess. Our payroll careers campaign is about how people got into payroll, and what they love about the industry and their career. Roles in the payroll industry can range from payroll administration through to business strategy, and include many areas in-between, such as software development and sales. We wanted to get stories from a range of members, at different stages of their career, with different backstories
and reasons for being in the industry. Most people in payroll will tell you they ‘fell’ into it, but what made them stay? What goes into putting Professional together each month and has it evolved over the years? The magazine has evolved massively, and we’re constantly making changes to the articles we include, and the layouts used, to keep the magazine fresh. A small team produces the magazine each month, with the bulk of the work completed by our internal designer, Nicole Davis, and our editor, Lora Murphy. We have lots of contributors, both internal and external, who provide the articles our members love, but the actual production is done by just a few people. The articles are sent to the design team by the editor, and these go through an initial layout. These layouts are sent back to the editor for proofing. Once proofed, the markups are returned to design for actioning, and this cycle continues until both sides are happy. Once all pages are complete, the design team creates the ‘book’; which is an assembly of the whole magazine. This full copy is distributed to the editor, creative manager and marketing manager before production. Once all parties have signed off, the artwork files are sent to our printers. After a final proof from our printer, the magazine is approved for production and distribution. We then create the online version, plus all the banners, buttons and assets to support the online version, along with the magazine email that’s sent to members. It’s a lot of work to produce a 50+ page magazine each month but it’s worth it, as it’s so well received by our members. n
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 10
JOIN US AT THE UK’S LARGEST INDEPENDENT PAYROLL CONFERENCE AND EXHIBITION
– 5-6 October | Celtic Manor Resort, Wales –
PROGRAMME
Your programme Choose from 20 workshop sessions to create your bespoke two day conference programme; with no need to book your places in advance. Plus , six keynote plenary sessions with prominent industry speakers.
Interactive sessions Got a burning question? Attend one of our interactive Q&A panel sessions and submit your questions to the industry experts.
Network and share Network with your peers in the industry and share your issues and experiences. And don’t forget to speak to the exhibitors and see what they have to offer you and your organisation.
Celebrate the profession The conference closes with the CIPP’s Annual Excellence Awards - giving you the opportunity to relax and celebrate the best of the profession with colleagues and friends, both new and old.
Book your place at cipp.org.uk/ACE
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WORKSHOP SESSION SPONSOR
PERSONAL DEVELOPMENT
# Be Payroll Evi Garoufi-London MCIPP, head of payroll and benefits at CIS Security Limited tells us why she values being a member of the CIPP and what her favourite membership benefits are
Why did you become a member of the CIPP? As the Chartered Institute of Payroll Professionals, it was important for me to get the CIPP seal from the beginning of my payroll career to gain recognition for my role within the industry. More and more payroll job adverts mention a CIPP qualification and / or membership, and it appears this has become a requirement as opposed to just being desirable for many companies. This confirms the importance of the Institute to employers across all sectors. How has your membership helped in your career? My membership has helped me considerably. Once I completed my CIPP qualification in 2011, I became a full member rather than an associate one. My CIPP membership gives me kudos in my current role and is a great way to showcase both my knowledge and expertise within the payroll industry. I will soon be applying for Chartered membership, as this will be a significant milestone in my payroll career. Which membership benefits have you used or enjoyed most and can you provide some examples? The Advisory Service is an excellent benefit we use regularly within the team. We’ve received fantastic support with more complex tasks, and confirmation we’re doing things right. Professional magazine is a great source of knowledge, and we enjoy the Advisory article as it provides direct answers to many questions which are relevant to what we do. My all-time favourite used to be ‘ Confessions of a Payroll Manager ’, which kept me entertained on difficult days, so I’m sad it isn’t included in the magazine anymore. Can you describe your payroll journey to us so far? I started working as a payroll administrator in 2007 with no previous payroll experience. I realised very quickly I’d like to progress in the industry. While studying for my CIPP Advanced Practitioner Certificate in Payroll, I was honoured to receive the Rising Star Award in the Annual Excellence Awards for Payroll Professionals in November 2011. My career took over from there.
I was fortunate enough to work as a payroll manager for some rewarding companies, such as: ● Searcys ● Cote Restaurants ● Gordon Ramsay Restaurants. In my current role as the head of payroll and benefits at CIS Security Limited, I’m privileged to have the support of a fantastic team, who are dedicated and customer-focused, but also great fun to be around. What are your hopes for your future career? Being awarded CIPP Chartered membership is my short-term goal, along with developing our current strategies to meet company growth requirements. I’m dedicated to my team and would like to assist them with their professional development. At some point, I’d like to mentor and provide support to young individuals interested in a career in payroll. Do you have any plans to study CIPP qualifications or training courses? In 2021, I successfully completed the CIPP’s P11Ds, expenses and benefits collection course and, more recently, the BeKnowledgeable holiday webinar, which was very useful. I’ve been considering an international payroll qualification for some time but am yet to take the leap with this. What advice would you give to those new to the payroll profession, who are just starting out in their careers? Payroll is very rewarding, as you’ll deal with real people and different scenarios every day. I would encourage you to sign up to a CIPP course and become a member, to ensure you’re up to date with current legislation. Read different publications, attend webinars and network as much as possible. n If you’re interested in taking part, contact us at marketing@ cipp.org.uk , and share your story with the payroll world. Together we can bring the payroll profession to the forefront of the business world.
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 12
COMPLIANCE
In 1983, the government laid legislation which meant that when an employee was unable to work because of sickness, their employer would have to process a payment to them. This is how statutory sick pay (SSP) was born. In this issue, the CIPP’s policy and research team explores various elements of the statutory payment Statutory sick pay What is it? SSP is the minimum an employer must pay an employee who meets certain eligibility criteria, when they’re unable to work because they’re sick. SSP is paid at a weekly rate of £99.35 (for the tax year 2022/23) and is paid for a maximum of 28 weeks.
Eligibility criteria To qualify for SSP, an employee must have: ● a contract of employment ● carried out some work under their contract
● been absent from work, due to sickness, for four or more days in a row. This includes non-working days and is known as a ‘period of incapacity for work’ (PIW) ● earned on average at least £123 per week (for tax year 2022/23) ● provided the correct notice ● provided proof of their illness if it exceeds seven days ● SSP is a day one right of employment, providing the employee has carried out some work for their employer. What’s a PIW? A PIW is created when an employee has been absent from work for four days in a row and there is a requirement for SSP to be paid. A PIW can include non-working days if the employee is still sick during this time. You cannot, however, count a day as a sick day if an employee has worked for a minute or more before they go home sick. If an employee works a shift that ends the day after it started and becomes sick during the shift, or after it has finished, the second day will count as a sick day. How much is paid? The weekly rate for SSP for tax year 2022/23 is £99.35 for up to 28 weeks. SSP is paid: ● for the days an employee normally works (these are called ‘qualifying days’) once they’ve been off sick for four or more qualifying days ● in line with their normal pay day ● is classed as wages. The daily rate of SSP will depend on the number of qualifying days per week. To calculate the average earnings, employers should add together the eight weeks’ pay prior to the date of sickness. *Please note the above information applies to employees only, and different rules may apply to other types of employment, e.g., agency workers, directors and educational workers.
When is someone not eligible? Employees do not qualify for SSP if they:
● have exhausted the maximum amount of SSP (28 weeks) ● are in receipt of statutory maternity pay or statutory maternity allowance – there are other rules for pregnant women and new mothers who don’t get these payments ● are absent from work because of a pregnancy-related illness in the four weeks before the week (Sunday to Saturday) their baby is due ● were in custody or on strike on the first day of sickness (which included any linked periods) ● are working outside the EU and the employer isn’t liable for their National Insurance contributions ● received employment and support allowance within 12 weeks of starting or returning to work for their employer. If an employee doesn’t qualify for SSP, form SSP1 must be sent within seven days of the sickness-related absence. When an employee’s SSP is ending, they must be sent form SSP1 either: ● within seven days of their SSP ending, if it ends unexpectedly while they’re still sick ● on or before the beginning of the 23rd week, if their SSP is expected to end before their sickness does ● if a new episode of sickness absence begins within the linked period, eligibility for SSP is determined based on the assessment from the first episode of sickness absence. Read more about linked periods of absence here: https://rb.gy/t2xmz6.
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| Professional in Payroll, Pensions and Reward |
Issue 83 | September 2022
COMPLIANCE
All you need to know about coronavirus job retention scheme compliance
Susan Ball, tax partner at RSM Employer Solutions and president of the Chartered Institute of Taxation, Carolyn Brown, employment law partner and head of client legal services, RSM UK and Paul Marcroft, tax director, RSM UK, discuss compliance activity surrounding the coronavirus job retention scheme (CJRS) now it’s closed, and how you can prepare O n 20 March 2020, then chancellor of the Exchequer, Rishi Sunak, delivered a speech that would over the following 18 months, through its taxpayer protection taskforce (TPT). The TPT has 1,250 dedicated staff in place until March 2023 to concentrate specifically on this. Up until the end of March 2022,
correct, with any overclaimed CJRS grant amounts returned directly to HMRC or reported on their tax returns. The TPT will look to payroll teams to understand how businesses remained compliant with the complex guidelines and legislation surrounding CJRS. What action is HMRC taking? HMRC has been undertaking several compliance intervention activities, including investigating reports to its hotline, issuing ‘one-to-many’ nudge letters and commencing one-to-one compliance reviews, focused on three areas of concern, namely: ● errors – genuine mistakes in legitimate claims and calculations ● opportunistic actions – any artificially inflated claims ● organised crime – fictitious claims or hijacking of legitimate claims. CJRS grants must be reported on employer tax returns and HMRC will risk assess these to decide whether to enquire into them. For corporation tax returns filed by the normal due date, it has the following time scales in which to open a compliance check: ● 12 months from the actual filing date for small companies (or companies that are members of a small group), or ● 12 months from the normal due date for other companies For late or amended returns, it has 12 months from the specified quarter day
continue to have implications for payroll professionals for several years to come, when announcing the introduction of the CJRS. The words, “For the first time in our history, the government is going to step in and help to pay people’s wages”, rang profoundly in the ears of the profession. You, the payroll professionals enabled employers to claim and calculate CJRS grants and were the ‘unsung heroes of the hour’. In fact, it took a national emergency for the profession to be recognised as business critical, in March 2020, when the Department for Education confirmed you were key workers. You had an undeniable impact on the job security and welfare of staff, as well as the continuation and bottom line of many businesses. The CJRS provided grants to employers between March 2020 to September 2021, so they could retain and continue to pay staff during the pandemic, by furloughing employees at up to 80% of their wages. CJRS has, of course, come with some drawbacks:11.7 million employees were furloughed through the scheme, at a cost to UK taxpayers of £70 billion. Her Majesty’s Revenue And Customs (HMRC) chief, Jim Harra, stated in November 2021, that HMRC expected to recoup around £2.3 billion of overclaimed CJRS and other coronavirus grant monies
HMRC opened nearly 41,000 one-to-one compliance interventions and contacted over 63,000 people via one-to-many campaigns. In a letter from Mr Harra to the chair of the House of Commons Public Accounts Committee in April 2022, he confirmed the TPT expects to recover up to £1 billion in overclaimed coronavirus grants during 2021/22 and 2022/23. In July 2022, HMRC confirmed, since the start of the schemes, it had prevented more than £775 million from being lost through error and fraud in the various coronavirus financial support schemes. This was done through compliance activity or by recovering overclaimed grants. With the total amount of money either blocked from being paid out or recovered through its compliance work sitting at more than £1.2 billion, HMRC compliance activity is still ongoing. In addition to this figure, employers and other grant claimants have made unprompted decisions to repay £970 million, either because they decided they no longer needed the money claimed, or because they recognised an error and returned it. It’s clear HMRC expects employers to review their claims to ensure they’re
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 14
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