Professional May 2021

MY CIPP

On your behalf

Policy team update

The CIPP’s policy and research team provide an update on developments

O ne of the key responsibilities of the CIPP’s policy team is to convey the opinions and thoughts of payroll professionals to various government departments in relation to future policies that will impact the profession. This month has seen a flurry of activity in the consultation space, and there is plenty for CIPP members, and the wider profession, to get involved with. This month’s instalment of ‘On your behalf’ focuses primarily on that area and provides an overview of some of the consultations and calls for evidence that have recently been unveiled. Don’t miss your opportunity to get involved. ‘Tax day’ There was an unusual event this year in that, despite traditionally being released on Budget day, consultations and calls for evidence were actually published at a later date – on ‘tax day’ (http://ow.ly/ Nqe330rCebn). The rationale was to “allow for more transparency and scrutiny”, and to enable tax professionals to dedicate more time and attention to responding to these documents. Tax day was 23 March 2021, and the CIPP’s policy team waited with bated breath to see if anything would be released that would have ramifications for payroll professionals in the near future. As expected, a variety of the publications related to broader areas of tax that those working within payroll departments would not necessarily be familiar with. There were, however, some interesting offerings,

to which the team will be formally responding.

● a consultation: ‘Clamping down on promoters of tax avoidance’ (http://ow.ly/ dofa30rCeoh) ● calls for evidence: ❍ ‘The tax administration framework supporting a 21st century tax system’ (http://ow.ly/N5KN30rCeon), and ❍ ‘Timely payment’ (http://ow.ly/ tVdK30rCep8). We will be posting various surveys and hosting several virtual thinktank roundtable meetings over the coming weeks and months, so it is essential to keep your eyes peeled so that you can get involved, have your say, and potentially shape the future of payroll policy. LPC annual consultation Each year, the Low Pay Commission (LPC), which is an independent body responsible for advising the government in relation to the national living wage (NLW) and national minimum wage (NMW) rates, releases a consultation to inform its recommendations. This year is no different, and the latest consultation has been published (http:// ow.ly/uoM430rCetw). The LPC is requesting views on business conditions and the economic outlook, which is more relevant now than ever due to the ongoing impacts of coronavirus on both businesses and individuals. The consultation seeks feedback relating to the following. ● The affordability and impact of a proposed increase in April 2022 to a NLW rate of £9.42. ● The intention of increasing the NLW rate to £10.33 by 2024, and to widening the scope of the NLW so that it will be applicable to those aged 21 and over by, at the latest, 2024. (The NLW applied to those aged 23 and over from 1 April 2021.) ● The effects of recent increases to the

The CIPP was disappointed to see that there was nothing relating to future plans for pensions tax relief, particularly when the net pay anomaly remains such a prevalent issue. A visit to the consultation page (http://ow.ly/Ow9830rCecR) for the relevant call for evidence (which closed in October 2020), reveals that the feedback submitted to HM Treasury is still, at the time of writing, being analysed. One area in which the CIPP is particularly interested centres on the issue of raising standards in the tax advice market (http://ow.ly/uIGx30rCelG). On first glance, it might appear that this is not particularly relevant to the payroll profession, but on scratching beyond the surface our interest becomes clear. The consultation is divided into two main sections: ● one that looks at whether all tax advisors should hold professional indemnity insurance, and ● another that explores a fixed definition of ‘tax advice’. Within the document examples are provided of professionals who and activities that may be deemed as: ● an employer advising an employee about taxable benefits for the year ● a payroll bureau managing an outsourced company payroll. The outcome of the consultation could have far-reaching implications for CIPP members, and the payroll profession more broadly. Other areas of interest include:

...the consultation could have far- reaching implications for CIPP members, and the payroll profession more broadly...

| Professional in Payroll, Pensions and Reward | May 2021 | Issue 70 8

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