in Payroll, Pensions & Reward PROFESSI NAL Official publication of The Chartered Institute of Payroll Professionals Issue 92 July - August 2023
Employment law latest Keep up to date with recent case law which could impact your role
Don’t get caught out With tax avoidance schemes on the increase, ensure you don’t get tangled up in one
Case laws galore! Read a selection of articles covering the numerous cases regarding holiday pay and entitlement
The holiday pay and leave issue
CIPP UPDATE POLICY HUB PERSONAL DEVELOPMENT
cipp.org.uk
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26
Our holiday leave and pay course continues to be one of our most popular courses. It’s certainly the course with the liveliest discussions, as getting answers on how you implement holiday pay compliantly is no easy feat, but our trainers do an excellent job of
navigating these choppy waters. Fiona Smith MCIPPdip, payroll training manager, The CIPP
36
Have your say
Editor’s
comment
I’m delighted to say, as I write this issue’s editor’s comment, that the sun is shining brightly, the weather is warm and I’m most definitely in the mood
Holiday pay and leave
for an ice cream. It’s also prompting me to start daydreaming about taking some of my annual leave and going on a holiday. I’m sure many of you reading this will
have booked holiday coming up, or you’ll be anticipating an influx of holiday pay requests, and subsequent pay and entitlement calculations, as we enter the holiday season. We regularly hear at the CIPP how holiday pay is an area of confusion and frustration for payroll professionals, as the laws are so complex. It doesn’t help that many high-profile cases on the topic of holiday pay and entitlement means things change at a rapid pace. That’s why this issue is ‘The holiday pay and leave issue’. Our feature article asks a host of experts for their views on this tricky area, and you can read all about this on page 40. There are also a variety of articles which cover the subject from multiple angles and perspectives, so be sure to check them out on pages 26, 36 and 56. Additionally in this issue, we have a lot of content on national minimum wage (NMW) compliance, so organisations can ensure they’re proceeding correctly in terms of both holiday pay and NMW… it’s minefield out there!
40
Lora Murphy MCIPP (editor@cipp.org.uk) Editor
56
26 - Government sets out plans to simplify holiday pay By Charlie Barnes and Jennifer Mansoor
A stroll through the world of holiday pay and leave
36 - Holiday pay: have your say By Payroll professionals
40 - Feature article – the holiday pay and leave issue By Jerome Smail 56 - Hot topic – a stroll through the world of holiday pay and leave By Karen Thomson
1
| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
Chief executive officer Jason Davenport MCIPP MloD CIPP board of directors Clare Warrington MSc FCIPPdip AFHEA Louise Gray ChMCIPPdip Stuart Hall MCIPPdip Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip FHEA ACIPD Jeremy Montgomery BA (Hons) FCIPP Brendan Mulkern FCIPP Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP Cliff Vidgeon BA (Hons) CMA ACG ChFCIPP Editor Lora Murphy 0121 712 1018 | lora.murphy@cipp.org.uk Advertising Daniel Cull 07795 652645 | advertising@cipp.org.uk Design James Bartlett and Nicole Davis design@cipp.org.uk Printing Acorn Press Ltd
Chair’s
message
The summer has finally arrived and hopefully you’re all looking forward to the holiday season, whether you are jetting off abroad, taking a staycation or resting at home. I’m sure your time off will be well earned and deserved. As payroll professionals, we know holiday pay calculations can be very challenging and complex, and we must ensure we keep up to date with the latest
information in a constantly changing environment. We’ve seen changes to the calculations over the years, including an extension to the reference period from 12 weeks to 52 weeks. We also see tribunals taking place, which rule that overtime payments and other elements of pay must be included in the calculation. To keep up with these changes, we need to ensure we: l review guidance from HM Revenue and Customs regularly l keep an eye out for new case law outcomes l seek advice where the rules are unclear. As a member you have access to the Advisory team, who are happy to help you with your questions and concerns.
Clare Warrington MSc FCIPPdip AFHEA (clare.warrington@cipp.org.uk) Chair, CIPP
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
CEO’s
message
Welcome to this issue of Professional , and my first writing to you as chief executive officer. I’m delighted and honoured to be here with you to serve the membership, raise the profile of the Institute and the industry and to work closely
with all at the CIPP and its associated partners. I’ll be working with Ken Pullar and the senior leadership team, allowing time to fully integrate within the business and get to grips with the key aspects of the organisation. In the first month, I’ll meet all the tutors as part of July’s tutor training event and have a planned meeting with the board. Here, I’ll be sitting for the first time in an executive position to answer questions, rather than with the non-executives posing the challenges, as I have been previously. I’ve had several months to prepare for this new opportunity following the recruitment process, which has allowed me to reflect on my career journey to date. I pinch myself when I realise I’m following in the footsteps of individuals that I’ve only ever read about when I joined the British Payroll Managers Association back in the 80’s. Individuals like Gordon Cresswell, who with others, has contributed so much to build the organisation to what it is to date. Although I’ll l be looking to the future, I recognise the importance of understanding our history and knowing what’s important to us all. I’ll take time with those around me to ensure key business decisions have collective agreement and are taking the Institute in the right direction. As a membership organisation, we deliver quality services, professional advice, training and qualifications. This is in addition to fantastic learning events and the best industry publications to support the membership. I’m especially interested to hear thoughts from you, the members, on what you’d like to see in the future. To that end, please email me with any thoughts, and I’d be delighted to pick up with you further at forthcoming networking events.
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. To get involved, contact Lora, at editor@cipp.org.uk. 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 2023. 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.
Jason Davenport MCIPP MIoD (jason.davenport@cipp.org.uk) Chief executive officer, CIPP
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 2
in Payroll, Pensions & Reward PROFESSI NAL
Contents July - August 2023
REGULARS
FEATURES
Welcome to your new CEO! By Jason Davenport
HMRC urges businesses not to get caught up in the supply chain of tax avoidance schemes By HMRC’s counter avoidance directorate
01 Editor’s comment 02 CEO’s and chair’s message 04 CIPP update News and developments 06 My CIPP
22
14
Safe as houses? Considerations when your employee is also your tenant By Jeni Morris
Underpaying the minimum wage By Tony Gibson
23
24
Events horizon, On your behalf, Payroll news, Industry news, Advisory Q&As, Welcome to your new CEO!, A day in the life of…, Spotlight on, Climate change update
Payroll’s true strategic value By Ellis Rees
How to remain compliant as HMRC
28
30
cracks down on NMW breaches By Cybill Watkins
20 Personal development BePayroll
21 Compliance
Making tax digital for income tax self- assessment: where are we now? By Richard Hattersley
The complexities of getting holiday pay and entitlement correct By Tim Bridgett
31
32
This issue, we explore the intricacies of compliance with national minimum wage regulations and holiday pay / entitlement rules
online exclusive content
40 Feature topic
Read all about the theme of the current issue
Technical panel update By Samantha O’Sullivan
Don’t do the bare minimum to ensure compliance with national minimum
38
34
44 Reward
Read the latest in employment law updates
wage rules By David Yewdall
56
Hot topic Take a stroll through the world of holiday pay and leave
online exclusive content
Elevating payroll with earned wage access By Ned Mcevoy and Sharon Kirby
New adventures in conflict resolution: mediation, innovation and the enduring need for skilled managers By Andrew Sutherland
44
46
online exclusive content
58
Payroll pets We say hello to some of your furry friends
Employment law update By Nicola Mullienux
Non-compete clauses to be limited By Danny Done
48
50
3
| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
LOOKING TO MAKE A DIFFERENCE IN YOUR ORGANISATION?
CIPP update
In partnership with Loughborough University, the CIPP offers experienced managers the opportunity to gain a recognised university qualification in Strategic Leadership, with the benefits of part-time learning to fit around their schedule. This qualification will help organisations to retain and develop talent, build management and leadership capability and bring an extra dimension to existing professional development within their organisation. MSc in Strategic Leadership
IAB awards ON 20 JUNE, we attended the annual Institute of Accountants and Bookkeepers (IAB) awards ceremony at the House of Lords, which brought together IAB members, partners and industry leaders to recognise their achievements, along with celebrating the IAB’s 50th year! We were so proud to sponsor this year’s ‘Payroll Professional of the Year’ award , which was presented by our chief executive officer (CEO), Jason Davenport. Many congratulations go to the winner, Caroline Metcalf MIAB.
Visit cipp.org.uk/study for details and to enrol
National Payroll Week 2023 – register your interest IT’S VERY nearly time for us to shine a spotlight on all of you, with National Payroll Week (NPW) 2023 fast approaching! Taking place between 4-8 September, make sure you get involved by registering your interest on our NPW webpage and you’ll receive updates regarding free to book webinars during the week. You’ll also be the first to receive our digital packs, filled with ways to help you celebrate the week and teach colleagues about the important roles you all play. Competitions will also be running throughout the week,, with the chance to win a ticket to our prestigious Annual Excellence Awards! We had over 4,000 downloads of the pack last year, so help us raise the profile of our amazing industry and register your details here: https://ow.ly/peux50OIOFk. Upcoming events IN JULY, we have two important events taking place, starting with our exclusive Chartered member dinner in Birmingham on 6 July. The evening celebrates our industry-leading members and provides a chance to network and discuss the industry, while enjoying an evening of delicious food. The following day, it’s our annual tutor training event, this year taking place near Nottingham. The day allows CIPP tutors the chance to network, hear updates from the CIPP internal team and gives us all the opportunity to celebrate together, as we present awards for the tutors’ services to industry.
Delivered in conjunction with
Scan to book
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 4
PAYR LL NATIONAL WEEK 2023 Shine a spotlight on the champions behind every payslip Taking place 4-8 September 2023, National Payroll Week recognises and celebrates the hard work of dedicated payroll professionals. The unsung heroes working behind the scenes to ensure employees are paid accurately, and on time.
HOW YOU CAN GET INVOLVED
FEATURED WEBINARS *
● Register your interest - Receive an update as soon as the NPW pack launches and the webinar bookings open. ● Celebrate in your office or online - Remind your manager and team that NPW is important, not just for those in your department, but everyone in the company. And remember, NPW is for everyone - not just for CIPP members. Ensure you take photos of your colleagues celebrating and send them to marketing@cipp.org.uk or post on social media using the hashtags #NPW23 #KeepUKPaid #ChoosePayroll. ● Host a ‘check your payslip’ coffee break - Encourage employees to book meetings with the payroll department for a friendly chat about how their payslip works. It’s the perfect way to improve relations and make people aware of what’s available to them. ● Promote payroll - Mention NPW on your intranet, email signature, media requests, letterhead, payslips or put an article in your company newsletter. ● Join in the conversation - Follow the CIPP on LinkedIn, Twitter, Instagram and Facebook. ● Feature in Professional magazine - Show us how you’re celebrating NPW by sharing pictures and 200 words with marketing@cipp.org.uk .
CIPP Policy Update A policy team update taking place 4 September at 10am
Cross border employees – managing complexities
We will explore what can trigger an overseas payroll obligation alongside policies and strategies for managing dual withholding Pay On Demand panel Join Wendy Muirhead, Sharon Kirby, Will Jackson Advisory clinic With Karen Wareham and Chevonne Wilde from our Advisory team Bookings for our week of FREE webinars will be open July 31 - so save the date!
View the full programme at npw.org.uk
Programme subject to change. Visit npw.org.uk for the latest information.
View all the latest information and register your interest at npw.org.uk
THANK YOU TO OUR NATIONAL PAYROLL WEEK SPONSORS
SILVER SPONSORS
GOLD SPONSORS
BRONZE SPONSORS
HEADLINE SPONSOR
Scan to book
Event horizon Your guide to upcoming events and training
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.
Training courses Take a look at some of our upcoming training courses below. Those that are taking place on a face-to-face basis are highlighted. Please note, there are other dates and locations and training courses available. Please visit http://ow.ly/iVfT50MU7yr.
Don’t miss out on our Annual Conference and Exhibition 2023
Course
Date
Location
12 July
Online
Time is passing by at such a rapid pace, which means it’s very
Overpayment recovery workshop
nearly time for the CIPP’s Annual Conference and Exhibition,
03 August
Online
taking place in October 2023. The line up this year is arguably
our best yet, and we’d like to see as many of you there as
25 September
Online
possible, so we can educate, collaborate and celebrate all
18 July
Online
things payroll, pensions and reward.
Ensure you don’t miss your opportunity to attend. You can
Holiday pay and leave
18 August
Online
find more information here: http://ow.ly/bXgI50Oq2Hr.
11 September
Online
Global mobility: key payroll issues
16 August
Birmingham
17 July
London
02 August
Manchester
Joint event with The Association of Tax Technicians (ATT) The CIPP will be joining the ATT to deliver an update on payroll policy making and an employment tax round-up. The CIPP’s editor, Lora Murphy will be covering the topic of payroll policy making. This session introduces something a little different, as it will explore how payroll professionals can get involved in shaping the future of payroll policy. Find out how you can make your voice heard, listen to updates from the policy team and hear about the CIPP’s previous collaborative work with government departments. The ATT’s technical officer, Emma Rawson will be providing an employment taxes update. Emma will cover: l P11Ds and payrolling benefits – where are we now? l benefit in kind hot topics l the consultation on modernising and simplifying income tax services – what could this mean for pay as you earn? l off payroll working / IR35 update.
Introduction to payroll
14 August
Online
12 September
Birmingham
18 September
Online
Automatic enrolment and pensions for payroll
07 August
Online
05 September
Online
13 & 31 July
Online
24 July
Birmingham
01 & 23 August Online
Payroll update
09 August
London
07 September
Manchester
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 6
POLICY HUB
On your behalf
It's been yet another productive and busy month for the CIPP's policy and research team , with a range of activities, from events and webinars, to consultations and surveys. Find out what the team has recently been up to on your behalf, and some of the ways that you, as members, can get involved Policy team update
Events Editor of the magazine, Lora Murphy attended the DeHavilland event, ‘Engaging with the liberal democrats’ manifesto process’. This session explored
centred on the future of international tax reform. Additionally, Sam was invited to a ‘safe sick pay’ campaign roundtable event. The session brought together businesses, experts and policy makers to consider the costs and benefits of potential changes to statutory sick pay. Findings of new research from WPI Economics and the Centre for Progressive Change was summarised, with the study looking at the business, government and societal cases for change. Insights into experiences and comments on the research were shared, which was followed by discussion on how potential changes could be made. Sam didn’t stop there – she represented the CIPP as a panellist on an SD Worx ' Payroll question time' session on the subject of keeping on top of ever-changing legislation. Joined by other expert panellists and hundreds of members of the payroll and human resources community, this was an interactive webinar with a live Q&A. A CIPP public sector special interest group (SIG) event took place on 8 June 2023. This was an in-person employment tax update for the public sector, held in London. With speakers from HM Revenue and Customs' (HMRC's) public bodies team, key issues were outlined which were particularly relevant to those in finance and payroll dealing with employment taxes. Not only did this event include quality speakers covering a range of hot topics, but also a prime chance to network. Policy and research officer, Meena Salhan hosted a BeKnowledgeable webinar on the topic of national minimum wage (NMW), presented by Jeni Morris, head of national minimum wage and Gary Henderson, national minimum wage specialist at Ernst & Young (EY). With HMRC increasing its enforcement activity across many sectors, Jeni shared her extensive experience. This was a valuable webinar, in which Jeni and Gary delved into: l complex NMW regulations l the technical pitfalls many businesses and
organisations struggle to understand l the current NMW risks in the spotlight l the risks HMRC may be focussing on in the near future. Meena also provided a legislative update for Advanced, covering relevant case law, helpful reminders, a roundup of all the changes for 2023/24 and spring budget outcomes. The season for consultations Following on from ‘tax administration and maintenance day’ (TAMD), there were a flurry of consultations. The policy team has been extremely busy and working hard to reply to as many consultations as possible to represent the payroll profession. Visit the policy hub to read the responses to the consultations for the following: l Low Pay Commission consultation 2023 l Off-payroll working (IR35): calculation of PAYE liability in cases of non-compliance l Simplifying and modernising HMRC’s income tax services through the tax administration framework l Tougher consequences for promoters of tax avoidance. The following two consultation responses will be available at the end of July: l The tax administration framework review: creating innovative change through new legislative pilots l Retained EU employment law reforms. We encourage everyone to get involved in consultation processes as they offer you the chance to make your voice heard and to impact future legislation.
a range of topics, including: l the Liberal Democrats’ general election manifesto process l the key engagement points for inputting into policy development l effective ways for public affairs teams to engage with the party. With a general election on the horizon, it’s important for the policy team to understand what various political parties are pledging, to start to understand potential impacts on the payroll profession. Lora also attended a roundtable discussion, hosted by Nest Insight, which looked at earned wage access and employer- provided loans. Nest Insight has been conducting research into the relevance and effectiveness of these solutions, via: l a landscape review l expert interviews l research carried out with workers. This session was the opportunity to bring people together to discuss the early findings of this work and to consider any potential next steps. Given the current economic climate, assisting employees with their financial well-being has never been more important. Lora also hosted a webinar, joined by Shantha David, a practising solicitor- advocate, who provided an update on the Retained EU Law (Revocation and Reform) Bill 2022. Policy lead, Samantha O’Sullivan, delivered an update to Freelancer and Contractor Services Association (FCSA) members regarding the work the CIPP carries out. Sam also attended a Chartered Institute of Taxation (CIOT) event, on 8 June 2023. This year’s Chartered Tax Advisers’ Address
Our Benchmarking Survey is now live Benchmarking is an important
process and allows you to compare your business's performance to that of others in the industry. By completing this survey, you’ll help to create a report based on the activities of the profession as a whole. The expected closing date of the survey is 21 July 2023. n
7
| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
Educate, collaborate and celebrate at the UK’s largest independent payroll conference and exhibition
4-5 October 2023 | Celtic Manor Resort, Wales
The CIPP’s Annual Conference and Exhibition is the largest independent payroll conference in the UK, and brings together top payroll professionals, thought leaders and solution providers from across the UK.
Whether you’re a seasoned payroll expert or just starting your journey, the Annual Conference is designed to empower and elevate your payroll skills and knowledge.
REASONS TO ATTEND
Enlightening keynote sessions Gain insights from leading payroll practitioners, industry experts and HM Revenue and Customs (HMRC) officials who will share their knowledge and experiences. Dive deep into the latest payroll trends, legislation updates, compliance strategies and best practices. Interactive workshop sessions Participate in a wide range of interactive workshops and thought- provoking discussion groups led by industry experts.
Personal and professional development Develop new skills and explore new perspectives, and gain valuable updates to boost your professional development and career prospects. Celebrate excellence Attendance at the full conference includes a ticket to attend the CIPP’s Annual Excellence Awards 2023; the largest UK payroll awards ceremony celebrating excellence in the profession. Networking Engage with professionals sharing similar interests and expand your network for personal growth and professional connections.
Discover new solutions Discover the latest payroll technologies, services and products from our diverse range of exhibitors. Engage with providers from across the industry to find solutions that will transform the way you manage your payroll.
Visit cipp.org.uk/ACE for full details and to book your place
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 8
“THE CONFERENCE IS ALWAYS AN EXCELLENT OPPORTUNITY TO ENSURE YOUR KNOWLEDGE IS CURRENT, LOOK AT WHAT IS NEW AND NETWORK .” Ian Nicholson MCIPP, head of HR operations and reward, QIC Global Services Ltd
FEATURED SESSIONS
Pay transparency and equality on the global scene Ana Laiu MSc FCIPPdip Head of payroll, PPHE Hotel Group With expertise in UK and global payroll, Ana offers insights on global payroll practices. She discusses equal pay, pay transparency, minimum pay protections, and reporting obligations. Additionally, she explores the UK’s position on the gender pay gap and advises employers on implementing effective internal changes.
Taking place on 5 October 2023 as part of the CIPP’s Annual Conference and Exhibition; the Annual Excellence Awards are the longest running, independent awards in the industry. Nominations for the CIPP’s Annual Excellence Awards 2023 are closing on 31 July so make sure you get your submission in soon. Don’t forget to nominate
National minimum wage (NMW) Jeni Morris ACIPP head of the NMW team, EY
Jeni Morris, an expert in NM regulations, highlights the complexity and common misconceptions surrounding the area. Unintentional errors can harm a company’s reputation, regardless of perceived fair pay. In this
session, Jeni draws from her experience at HMRC’s NMW team and as head of NMW at EY, to discuss current and future NMW risks targeted by HMRC’s enforcement activities.
NEW FOR 2023: PAYROLL SERVICE PROVIDER STREAM What makes a successful payroll bureau? Barry Matthews Consultant, Bureau Strategy Many payroll bureau managers have one objective at the start of a month - to get to the end of it. In this presentation, Barry will share two decades of experience working with bureaux of all sizes and reveal the factors which the most successful bureau operations share.
Visit cipp.org.uk/awards for information and to submit your nominations
This years sponsors and exhibitors
IDEAS | PEOPLE | TRUST
HEADLINE SPONSOR
9
| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
PAYROLL news
issue with the company car tax calculator. If you used the calculator between 6 April and 14 April 2023 you may need to check your calculations l national minimum wage (NMW) common issues, including differentiating between someone on work experience and someone who is an intern l the PAYE settlement agreement (PSA) deadline is approaching, on 5 July 2023 l direct debit update l online employer services have been launched, where calls to HMRC could be resolved using online tools – you may instead be sent a text message directing you to the service rather than speaking to an advisor. Tax and updates to guidance l an increase to the apprenticeships care leavers’ bursary l occupation specific guidance for locum pharmacists will be removed from the employment status manual and the check employment status for tax (CEST) tool may decide to make up any gaps in their record, all the way back to April 2006. This can be particularly pertinent to those who are: l low earners l unemployed but not claiming benefits l self-employed but with low profits l living or working outside of the UK. These groups should be encouraged to review their record and see if making voluntary contributions is beneficial. It’s worth noting that filling gaps won’t always
will also be updated. If you’ve made a status determination based solely off the written contract, you should re-examine the determination l a reminder that the self-assessment threshold has been increased from £100,000 to £150,000 for the 2023/24 tax year l employment-related securities return deadlines and further information l preparing for the new tax year basis for income tax self-assessment. General information l making child benefit claims quicker and easier for new parents l how the National Cyber Security Centre helps businesses tackle cybercrime risks l National Insurance (NI) numbers can now be saved to the Apple Wallet l Tax administration framework review – calls for evidence and information published. The Employer Bulletin can be read in its entirety, here: https://ow.ly/YM2P50OQuE3. increase an individual’s state pension amount. The deadline was already extended earlier this year and has now been extended for almost two additional years. This will allow many more individuals the chance to make payments if they wish. With pensions adequacy being a very relevant topic right now, the CIPP encourages employers to speak to employees and make them aware of this news where possible.
June Employer Bulletin published THE JUNE issue of HM Revenue and Customs’ (HMRC’s) Employer Bulletin is now available online and covers a number of important updates for payroll professionals to be aware of. The CIPP recommends that payroll professionals read each of these publications in full, as and when they’re provided, to ensure they’re processing payroll in a compliant manner and understand any changes. This update provided information on: Pay as you earn (PAYE) l a reminder of the reference numbers needed on early / late payments to HMRC l P11D guidance to correctly report diesel cars on the working sheet for car and fuel benefit l further P11D guidance for filing and payment deadlines l confirmation that HMRC identified an Deadline for voluntary National Insurance contributions extended to April 2025 IN A joint release from HMRC and the Department for Work and Pensions (DWP), it was announced that the deadline to top-up voluntary NI contributions has been postponed until April 2025. Usually, individuals can only pay voluntary NI contributions for the previous six tax years; however, currently they
Diary dates
P11D submission date (to both HMRC and employees) P11D(b) submission date
6 July
5 July
Last day of tax month 3
6 July
First day of tax month 4
Last day for submitting a real time information employer payment summary to apply to tax month 3 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method
19 July
22 July (this is a weekend date)
Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method
5 August 6 August
Last day of tax month 4 Last day of tax month 5
Last day for submitting a real time information employer payment summary to apply to tax month 4 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method
19 August (this is a weekend date)
22 August
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 10
INDUSTRY news
Reward Strategy’s Reward 300 winners announced CONGRATULATIONS TO everyone who made the Reward 300 list for 2023, which was recently announced, and can be found here: https://ow.ly/ YnLw50ORFyt. The Reward 300 is a prestigious index which reflects the range of lights across the profession. These are the most influential leaders and dedicated professionals working across reward, payroll, human resources (HR), employee benefits, workplace pensions and associated sectors.
Special congratulations to our CIPP colleagues: l Dianne Hoodless MSc ChFCIPP FHEA, board director l Julie Northover ChFCIPPdip, lead Payroll Assurance Scheme (PAS) assessor l Lou Gray ChMCIPPdip, board director l Vickie Graham DipM ACIPP ACIM, business development director. A massive well done also to our tutors, trainers, PAS assessors, independent end point assessors, consultants and members who made the list! allows for consistent data modelling and reporting, regardless of in-country provider. It also offers payroll managed services in 160 countries and 120 currencies. Through the acquisition, UKG will immediately begin offering fully managed, multi-country payroll services for businesses headquartered in the U.S. and Canada that seek support processing payroll outside of North America, or that simply want a unified, global view of their payroll around the world, even if they already have preferred payroll providers. “Combining Immedis and UKG ensures businesses and their employees will have the best possible multicountry payroll experience. As a longtime UKG partner, we have a great track record of success together,” said Irish entrepreneur Terry Clune, founder of Immedis and CluneTech. “Joining UKG expands the reach and impact of our ground-breaking technology. It also presents tremendous new opportunities for the exceptional people who make Immedis special. I am extremely proud of our incredible team, and I’m delighted that each of our 370 Immedis staff will gain from this acquisition.” “The acquisition of Immedis and the introduction of UKG One View is transformative for the HCM industry, delivering unprecedented levels of visibility, flexibility, and accuracy to the multi-country payroll process,” said Chris Todd, chief executive officer at UKG. “Having worked closely and strategically with Immedis for several years now, we’re thrilled to welcome the entire Immedis team into the UKG family.”
UKG acquires Immedis from CluneTech IT’S BEEN confirmed that UKG Inc, a provider of HR, payroll and workforce management solutions, has reached an agreement to acquire Immedis. Immedis is a global payroll provider with technology and services supporting more than 160 countries. This will help to transform multi- country payroll. Immedis, founded in Ireland in 2016, is a subsidiary of CluneTech, a suite of technology companies focussed on simplifying global business. With 370 employees worldwide, Immedis has built an extensive multinational customer base spanning key industries. Demand for the Immedis payroll platform has grown strongly, and this acquisition reflects an increase in valuation above its last investment round. UKG will launch UKG One View later
this year. Developed in close collaboration between UKG and Immedis, One View uses the strengths of both organisations to transform the traditionally fragmented global payroll model. “Tackling the persistent challenges of global payroll and compliance across multiple countries through completely new and innovative approaches that are technology-led has been the driving force behind our work at Immedis,” said Richard Limpkin, co-founder and chief strategy officer at Immedis. “Now, coupled with the powerful UKG human capital management suite and its industry-leading global workforce management, we’re excited to help further redefine the entire multi-country payroll market.” Immedis provides organisations with a modern, global payroll technology platform built on a perpetual validation engine. This
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| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Providing documentation for taking paternity leave Q: Please can you advise if it’s still the case that, if an employee goes on paternity leave, they should provide a copy of the MAT B1 form from their partner, even though the partner isn’t working? A: HM Revenue and Customs (HMRC) guidance states that proof of the pregnancy or birth is not required for the purpose of entitlement to statutory paternity leave and pay. Employees are, however, required to provide: l the child’s due date l the date they wish to begin their leave l whether they require one or two weeks leave. For reference, see: https://ow.ly/ umIf50OSyFe.
Treatment of restricted stock gain units (RSUs) Q: We process a RSU through the payroll when company shares vest. Should the RSU gain be included in the calculations for the student loan deduction? A: Student loan deductions are based on the same gross pay used to calculate secondary employer’s class 1 National Insurance contributions (NICs). Any gain on vested shares for a UK-based employee are treated as earnings under Sections 7(3)(a) and 62 of the Income Tax (Earnings and Pensions) Act (ITEPA) 2003. Therefore, the gain will be subject to class 1 NICs as well as pay as you earn (PAYE) through the payroll. Student loan deductions are therefore calculated on the total gross pay, which includes the gain on vested shares in the pay period the gain was received. For reference, see: https://ow.ly/ xFbr50OSyHp. PAYE settlement agreement (PSA) calculations for taxpayers in devolved countries Q: We’re compiling our PSA for tax year 2022/2023 but are unsure how we treat taxpayers in Wales and Scotland. Can we include our Scottish and Welsh employees on our PSA? A: Only one agreement is required for all taxpayers, but HMRC requires a separate calculation for each devolved country. This is for employees who receive benefits regarded as minor, irregular or impracticable to report on forms P11D. HMRC should have previously agreed that these benefits can be included on an employer’s PSA prior to the start of the tax year. Since July 2022, PSA1s can be reported via an employer’s government gateway portal, for a more efficient submission route for employers. For reference, see https://ow.ly/ eVot50OSyMK.
How should an employer’s pension contributions be treated during a period of paternity leave?
Treatment of pensions during paternity leave Q: An employee is entitled to statutory paternity pay (SPP). How should the employer’s pension be treated? Is it based at the same rate as was paid prior to the start of the SPP period? A: During a period of paternity leave, an employee is entitled to the benefit of all their terms and conditions of employment, except for the right to remuneration. During periods of paid paternity leave, pension scheme members may be required to pay contributions based on the pay received within the SPP pay period. However, the employer must pay contributions based on the pay the pension member would have received if they’d been working, subject to pension scheme rules. However, the employer may (if they wish) pay additional employers’ contributions to make up any shortfall in contributions so that the employee’s pension fund is no worse off during the paid paternity leave. This will depend upon the contractual terms and conditions in place and the scheme rules. The rules surrounding an employee’s entitlement to their terms and conditions during a period of SPP are contained in The Employment Rights Act 1996 Section 80C. This can be found here: https:// ow.ly/cq7u50OSyzb.
What’s the correct treatment of diesel vehicles registered as Euro 6AP?
Treatment of diesel vehicles registered as Euro 6AP Q: Are diesel vehicles which are registered as Euro 6AP subject to the exemption of the 4% supplement? A: All diesel cars which meet the Euro 6d standard are exempt from the 4% diesel supplement. The Euro status of the car is displayed within its V5 Registration document and will be shown as: Euro 6AJ, Euro 6AK, Euro 6AL, Euro 6AM, Euro 6AN, Euro 6 AO, Euro 6AP, Euro 6AQ, Euro 6AR. Therefore, diesel vehicles which are registered as Euro 6AP would be exempt from the 4% supplement.
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 12
POLICY HUB
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How do you account for taxpayers in Wales and Scotland in a PSA calculation?
PAYE and NICs stance for individuals domiciled outside of the UK Q: Our UK-based company is employing an individual who’s domiciled in France. The expectation is that, although based in France, they’ll commute to the UK on a weekly basis and work here for two or three days per week. We have no place of business outside of the UK and are looking for advice as we’re unsure if UK PAYE and NICs arise. A: Where an employee isn’t UK resident but performs some of their duties here, it’s advisable to complete a Section 690 direction and submit it to HMRC. This will prompt HMRC to issue an instruction, ‘Application to limit PAYE’. The employer will be told how much, as a percentage of earnings, must be taxed in the UK. The employee will need to complete tax returns in both the UK and their country of residence. Schedule 690 applications can take anything up to a year to reach agreement with HMRC. In the interim (until
the Schedule 690 is received), 100% of earnings should be taxed as UK income. For reference, see: https://ow.ly/ ZbUQ50OSyS3. Where an employee performs duties in two or more European Union countries, an employer will be required to check which state’s social security liability applies, by completing a form CA8421 and submitting this to HMRC. HMRC will then inform the employer of its decision. If liability falls within the UK, National Insurance will become due on the employee earnings processed via the UK payroll. NIC liability may continue for up to two years following the start of the employment or assignment, at which time, employers should review the employee’s position regarding the number of working days spent in the UK. A further determination may then be required and HMRC may approve an extension, or issue a revised instruction regarding the employee’s NIC liability. For reference, see: https://ow.ly/ LiRo50OSyUR. n
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| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
MY CIPP
WELCOME TO YOUR NEW CEO!
Jason Davenport MCIPP MIoD became CIPP chief executive officer (CEO), on 1 July 2023. Here, we discuss his career journey to date, and his exciting plans for the Institute, both now and in the future
M y whole career has been centred around payroll. Having said that, I’ve moved sideways within businesses and moved out to experience the next level of learning and development I was seeking at the time. To help bring that to life, I know most talk of falling into payroll. However, when I was first employed, I had the option of accounts or payroll. This was when
terms) was so broad, it interested me to learn more. I moved to Wimpey Construction, eventually moving with the civil engineering side of the business to Tarmac, who supported additional learning, so I could continue to develop and gain qualifications to support my future. Knowing payroll was where I enjoyed working the most, I then looked to join an outsourcer. I was clear with my manager
accounts were written up in massive ledgers as wide as a desk, and payroll was completed by hand on carbonised paper, with tax tables to support calculations. In the construction industry (where I started my career), the diversity of the workforce, from groundsmen and electricians to bricklayers and plumbers (and their associated joint councils, who set out working rule conditions and payments
| Professional in Payroll, Pensions and Reward | July - August 2023 | Issue 92 14
MY CIPP
of the time, Andrew Chilton, regarding the reason I wanted the move, and he supported my review of the market and eventual move to CMG. The support and guidance provided by Andrew in my early career was invaluable. That is also the time when I first joined the British Payroll Manager’s Association and read about individuals such as Gordon Cresswell, Trevor Lakin, Pete Blackhurst and Chris Williams. Legends in the industry. CMG (now CGI) was a meritocracy and very clear that with hard work and skill, if you passed their internal management development programme, you could become a director of the business. Lots of individuals didn’t make the grade, but I remember the day I was told I’d passed the course and was made an associate director, and how fantastic that achievement felt. Do please ask me about the three days of tests you had to go through, I’d be more than happy to explain. I remember also receiving a bottle of champagne as the business reached 1,000 employees. The business now has many tens of thousands of employees. Gaining experience developing and building shared service centres in the North, across multiple industries, allowed me the opportunity to recruit some fantastic people to the industry. I’m incredibly proud to follow how their careers have gone from strength to strength. CMG also allowed the opportunity to work across other European countries, in delivering service models that were multi-country. This experience made my next move to Northgate Arinso (now Zellis) a very natural move, as the UK delivery model was then introducing off-shore services, in support of near and on-shore delivery. This is when Ken Pullar and I first worked together. Ken is another person who has been incredibly supportive to me throughout my career, and has helped guide me with decisions, and support the direction of my career for many years, for which I’m truly grateful. My career then moved from UK operations to global operations. This included time spent managing third party providers across the globe and working with the international product teams responsible for building integrated systems
There’s much more for us to do, which includes: l ensuring qualifications and training are the best they can be and continue to evolve with the business landscape l continuing to deliver the end point assessment capability for apprenticeships l ensuring HM Revenue and Customs and other bodies recognise the efforts and skills of those within the industry l working with other countries in the global setting of payroll. As more and more within the UK become responsible for multi-country delivery, I’m keen that we support them in their journey, as well as those who deliver within very specific pockets of the industry, such as marine and the air industries. With that in mind, I look forward to working closely with partners across the globe and supporting those broader initiatives. Although I’ve been in management now longer than operations, the feeling of delivering accurate, on time payroll results has never left me. Neither has the importance of ensuring an employee’s pay positively reflects their earnings. This is incredibly important to households, and it’s what lights a fire in me – to continue to serve and raise the profile of the industry. Education for school leavers (especially those joining the workforce) to understand payments and deductions and the broader understanding of financial management is also extremely important to me. This links in with how the CIPP can support our future generations. As for outside interests, I’m an England Rugby Union coach and a power boat captain. I’m married to Louise with three children, Gabrielle, Charlotte and Patrick. They’re my bedrock, so do allow me to wax lyrical about them when we meet. I was also once on security detail for Princess Diana... do ask me to elaborate, and I will say what I am allowed! n
to support the service offering to the multi- country client base. Working with so many teams in product development, operations, sales and third-party partners provided a wealth of experience to build from. Having spent a number of years in a global capacity, the opportunity then arose to work with Capita in the UK, which came along at just the right time for me. I first took up a role responsible for several National Health Service (NHS) Trusts, which provided additional learning, to understand the multiple terms and conditions of all who work within the NHS. I left Capita three years later as chief operating officer, having supported the development of the shared service centre network and all their people in the human resource division, to start my own consultancy. This was another step into new territory and a bucket list aspiration ticked off. Stepping away from the consultant work and clients I’d developed strong working relationships with hasn’t been easy. I’ve had the opportunity to work with many fantastic individuals within this industry – too many to name here, but all of whom have contributed to my development and rich tapestry of experiences, both in the domestic market and internationally. My CIPP journey Throughout this time, I had also been a non-executive director with the CIPP. I had a good insight into the industry, and I’ve seen how the organisation has developed, and strived to promote the payroll and pensions professions to be recognised alongside other Chartered bodies. Having been recruited to the role of CEO, I’m delighted to be here and look forward to continuing to promote the hard work of all who contribute to the success of the Institute. Working with the fantastic team here at the CIPP , the tutors, Chartered members and all who contribute to promoting and ensuring the industry is recognised for its contribution to business will be an honour. In recent years I have also worked as a ‘be the business’ mentor, to support the drive to improve productivity within the UK’s small to medium-sized enterprise (SME) businesses.
One further reflection would be, what’s my favourite payroll anthem? Well, as a Liverpool supporter, there’s only one payroll anthem for me, which hopefully sums up the comradery and support that we show each other “You’ll never walk alone!”
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| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
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