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
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