MEMBERSHIP INSIGHT
Where the employee is taking statutory shared parental leave and pay (SShPL and SShPP) and becomes sick and unable to care for the child, and they form a PIW, SSP takes precedence. Q: We are a bureau and our client, a sole trader, is incorporating on 1 July 2017 which means that the current pay as you earn (PAYE) scheme will be closed as at 30 June 2017 and a new scheme opened on 1 July 2017 for the new limited company. All the existing employees will then be transferred to the new PAYE scheme for the July payroll. Can the new company claim the full employment allowance under the new PAYE scheme? A: If, for example, company A is your sole trader and company B is the new incorporated company, then company B cannot claim the employment allowance for the employees that it gained from company A for the rest of this current tax year. This is because you cannot split the employment allowance and it also cannot be apportioned from one company to another. You must leave the employment allowance to be claimed in full for this tax year with company A, and company B will be able to claim in their own right from the following April. Q: We currently run a four-weekly payroll and are planning to change this to a monthly payroll cycle. Currently hours worked from 6 March 2017 to 2 April 2017 are paid on 7 April 2017 which is tax period four of tax year 2017–18 on our four-weekly payroll. We also change to a monthly pay cycle in April 2017, so hours worked between 3 April 2017 and 17 April 2017 will be paid on 26 April 2017 which is tax period month 1. How are the National Insurance contributions (NICs) for these two payments to be calculated? A: The employer should add the earnings together for both payment periods and decide how much NICs are due for the new monthly pay period for both these two amounts, then reduce the amount by the NICs that have already been paid in the four-weekly payroll cycle (7 April 2017). Guidance can be found in HM Revenue & Customs National Insurance Manual – see https://goo.gl/G98H2.
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m.
to 4.30p.m. on Fridays. It is free to all CIPP members * , students and attendees of approved CIPP courses and conferences in the last six months. Call 0121 712 1099 , email advisory.service@cipp.org.uk or visit cipp.org.uk for frequently asked questions.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: We have a situation where an employee is entitled to a company car and to use it for private commuting. Currently he does not need the use of this car for two months and so has now loaned it, with our permission, to another employee to use. Do we need to report the company car in the P11D return for both employees? A: Yes, if the business has provided a vehicle which the employee can use for private commuting this must always be declared in the P11D return as a taxable benefit. However, because this employee is giving up the use of the vehicle for two months the employer can reduce the amount of time the car is available from 365 days to the actual amount of time for which the employees had the car. For the second employee, this is reported as normal but the employer reduces the amount of time available to use the car in the P11D from 365 days to the actual duration that the employee is allowed to use the company car. Q: Could you please offer some advice as to which statutory payment would take precedence if an employee became sick during: statutory maternity leave (SML), statutory paternity leave (SPL), or statutory adoption leave (SAL)? A: When an employee is taking SML and falls sick during the maternity pay period (MPP) and also forms period of incapacity to work (PIW), the employer would not pay statutory sick pay (SSP). This is because the 39-week-MPP is the disqualification period for SSP. If the employee continues to be sick during and after the MPP period no SSP or statutory
maternity pay (SMP) would be due. If she recovers and then becomes sick again within eight weeks of the previous PIW this would be counted as a linked absence and would mean she would still be disqualified from SSP. Where the employee’s first instance of falling sick and forming a PIW is after the end of the MPP, then the employer would need to consider whether SSP should be paid, e.g. see if their average weekly earnings were high enough at £113 per week. If an employee were to fall sick during a week of SPL then the employer would not pay statutory paternity pay (SPP), as SSP takes precedence. The employer needs to bear in mind that if an employee is sick they have to form a PIW and SSP would have to be due in that particular week. For example, if the employee was sick at the end of a SPP week for three days, then SSP would not be payable in that week so SPP would take precedence. The legislation which governs this is Regulation 18 (a) of the Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations 2002 (https://goo. gl/GTBDdv). When an employee who is taking SAL and statutory adoption pay (SAP) becomes sick and a PIW is formed, SSP becomes due as it takes precedence. If the employee recovers during the adoption pay period (APP) then they would be entitled to SAP for the duration of the APP. This is covered by Regulation 27(1)(a) of the Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations 2002, and by Regulation 27(1)(a) of the Statutory Paternity Pay and Statutory Adoption Pay (General) Regulations (Northern Ireland) 2002
| Professional in Payroll, Pensions and Reward | July/August 2017 | Issue 32 6
Made with FlippingBook - Online Brochure Maker