MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q: Our employees are required to undergo bag searches after clocking-out at the end of their shifts. On occasion this can cause employees to wait an extra five to ten minutes before they can leave the building. Should a company consider this extra time for payment as it is preventing the employees leaving the site? A: ‘Time worked’ includes time where an employee is at or near a place of work. As the employee is required to be available at the place of work, the time spent waiting to be let out of the building and having their bags checked should be paid. This would be regarded as time worked under the provisions in regulation 32 of the National Minimum Wage Regulations 2015 (https:// bit.ly/3s0HYzH). It would be advisable for the employees to clock-out after they have had their bags searched. Q: As my company is having our new office refurbished, is it possible to register for the construction industry scheme (CIS)? A: As the company using the building is refurbishing it for their own business, it would not register as a contractor for CIS even if it is regarded as a deemed contractor under regulation 22 of the Income Tax (Construction Industry Scheme) Regulations 2005 (https://bit.ly/3viSZOC). The company would therefore not need to apply the CIS to any construction expenditure as it relates to property used for the purposes of the business itself. (See HM Revenue & Customs’ (HMRC’s) Construction Industry Manual , page CISR15000 (https://bit.ly/3whTwke).) Q: Is it correct that employers cannot informally payroll benefits from the 2021/22 tax year? Also, would the
benefit being payrolled have to be reported in the full payment submission (FPS)? A: This is correct. HMRC’s Employer Bulletin (https://bit.ly/3qOifbW) for February 2021 explains that under end of year processing you must register to payroll benefits. The only way to payroll benefits from 2021/22 is to enter a formal arrangement with HMRC. The Bulletin provides a direct link to the guidance on how to do this. Benefits processed through the payroll are included in the FPS and submitted to HMRC via data item 60. The P11D return is no longer required where any benefit is payrolled under a formal arrangement. However, the P11D(b) return is still required to account for any class 1A National Insurance contributions (NICs) due. Q: Would off-payroll working (‘IR35’) apply if an individual is a sole trader supplying services through a chain of intermediaries? A: Hiring organisations are always responsible for deciding the employment status of anyone working for them. The IR35 off-payroll working rules can only apply when an individual supplies their services through an intermediary or if the individual is using a personal service company. Where an individual (a sole trader) is contracted directly and there is no intermediary involved, normal status tests should be explored as any pay as you earn (PAYE) liability falls on the company engaging them. However, the legislation relating to IR35 off-payroll working would not apply.
correct this in the next available payroll, but the employee has student loan deductions which will be taken at a higher rate when we process the back pay. Can we manually adjust this to put the employee in the position they would have been had they not been underpaid? A: Student loan deductions follow the same principles as class 1 NICs, in that they are a non-cumulative deduction. Deductions are made on total amounts, regardless of when they were earned. The deduction, unfortunately, will have to stand. If at the end of the tax year, the employee is under the threshold for student loan deductions to be taken, then they can contact the Student Loans Company for a refund. If in doubt with regards to the employee’s level of earnings, the Student Loan Company will be able to confirm the figures with HMRC and issue a refund if applicable. Q: HMRC have withdrawn paper P60 certificates and our software supplier is no longer selling its paper versions. We will, therefore, be printing our P60 certificates on plain paper this year for employees who require paper copies. Is it acceptable to print them out in black and white rather than colour? A: Yes, providing that all the required information is included on the bespoke P60 a different background colour would be acceptable. Q: I am setting up my own payroll bureau. Do money laundering regulations apply to a payroll business and will I be required to register with HMRC? A: Schedule 1, paragraphs 1(a) and 1(b) of the Payments Services Regulations
Q: We have underpaid an employee for the past three months. We are going to
| Professional in Payroll, Pensions and Reward | May 2021 | Issue 70 10
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