COMPLIANCE
in kind. Further clarification can be found in the employment income manual (EIM), at http://ow.ly/qu9F50OzHKz (EIM21765). This panel meeting was held virtually, with most panellists wearing headphones of some sort. This begs the question, 'with virtual meetings now being the norm, should employers be doing more to look after their employees’ hearing, in the same way they look after their eyesight?' Hearing loss has been linked to other healthcare issues, including mild cognitive impairment and dementia. With ‘virtual’ being standard for most now, is it time for employers to listen up , and take care of their employees’ hearing? “There’s still uncertainty regarding the tax implications when eye tests are provided, and the pos i tion when they’re reimbursed” Veteran’s NICs When the initial policy paper for the veteran’s NI relief was published, the measure was anticipated to “have a significant impact on around 10,000 employers who are estimated to be the main employers of recent veterans”. You can see the policy paper here: http:// ow.ly/y8yt50OBWuu. However, in December 2022, Victoria Atkins MP confirmed, within parliamentary written question and answers (http:// ow.ly/LHZR50OBWIJ), “Between April 2022 and October 2022, 470 employers claimed the National Insurance contributions relief for employers who hire veterans”. This is less than 5% of the anticipated 10,000 employers who could save via the relief. The panel members raised a valid point – payroll professionals are aware of the relief, but are those who are recruiting? n
relief in investment zones: “Employer National Insurance Contributions relief: zero-rate Employer NICs on salaries of any new employee working in the tax site for at least 60% of their time, on earnings up to £25,000 per year.” Will we see more thresholds introduced along with the new investment zones in the future? Who knows! But once we do know, we will update you accordingly. The panel also discussed whether ‘returnerships’ should be promoted throughout the payroll industry, to encourage new talent to the industry. With the software stream of the profession always evolving, could we use the principle of ‘returnerships’ skills bootcamps to upskill professionals following a period away from work? NMW and salary sacrifice The next topic of conversation centred on the interaction between NMW and salary sacrifice schemes. All employers are aware of the complex legislation surrounding NMW compliance, and we understand employees cannot enter into a salary sacrifice scheme if this reduction to their pay takes them below the NMW. Recently, the policy and research team has been asking the question, ‘is it fair that low earners cannot benefit from the tax savings available through salary sacrifice schemes?’ The pensions landscape is working towards improving pension adequacies, and we believe that allowing low earners, on or at the NMW, to contribute into a salary sacrifice pension scheme could significantly increase the number of employees saving towards their future. It was good for the policy team to gain the panel’s thoughts on this topic. This is something the team want to work on, so please watch this space for further thoughts and information. Payroll giving The panel discussed payroll giving. The policy team wanted to know who offers it, and if payroll, as an industry, could do more. While surviving through the cost-of-living crisis, many individuals who previously donated to charity via direct
debits may have stopped this to keep hold of their hard-earned money. However, this prompts the question, 'are employees aware they can contribute to a charity of their choice, through their pay, in a tax- efficient way?' Employers can allow employees to make regular contributions, or to make one-off donations to timely causes, for example, an earthquake appeal. The CIPP is an avid supporter of payroll giving, and several panellists confirmed they offer payroll giving to their employees. This is a great way to allow employees to give back and they’re able to do so in a tax efficient way. Let’s spread the word about payroll giving. To find out more, please visit the payroll giving month website here: http:// ow.ly/CuyV50OxPtX. Eye tests Further discussion took place regarding employers providing eye tests and special corrective appliances (e.g., glasses / contact lenses), to employees. This has become normal practice, but it’s apparent there’s still uncertainty regarding the tax implications when eye tests are provided, and the position when they’re reimbursed. The legislation can be found at Section 320a of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). It states: “No liability to income tax arises in respect of the provision for an employee of – (a) an eye and eyesight test, or (b) special corrective appliances that an eye and eyesight test shows are necessary, if conditions A and B are met.” This shows that only the provision of eye tests and glasses / contact lenses is exempt from being a taxable benefit. Therefore, if an employer reimburses the cost of an eye test or glasses / contact lenses, this will result in a taxable benefit
How can members get involved in the technical panel? The CIPP is keen to hear questions and topics which members would like to see debated and discussed with the technical panel. If you have anything you’d like to ask, please email the policy team, at policy@cipp.org.uk to get your issues on the agenda.
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| Professional in Payroll, Pensions and Reward |
Issue 92 | July - August 2023
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