MY CIPP
The CIPP's Advisory Service team provides answers to popular questions
Q: An employee is due to take adoption leave through a surrogacy arrangement. Guidance on the GOV. UK website states that “proof is not needed for leave or pay unless you ask for it”. What sort of proof could be required? A: An employer can ask for a statutory declaration from the employee confirming that they intend to apply for a parental order under section 54 of the Human Fertilisation and Embryology Act 2008 within six months from birth and expect that order to be made. The notice must include the baby’s expected date of birth, and as soon as possible the employee must inform the employer of the actual birth date. You can find information here: https:// bit.ly/2zdU6qj. Please refer to pages 23 to 29 for specific information on surrogacy and parental order parents. Q: Where an employee has a company car which is changed part-way through the tax year how is this reported to HM Revenue & Customs (HMRC)? A: The employer can submit an electronic P46(Car) return. (This return does not remove the employer’s responsibility to make a P11D return for the company cars at the end of the tax year.) The employee can set up a personal tax account with HMRC which they can use to inform HMRC that they have changed their company car. Q: For the purpose of claiming employment allowance, is the National Insurance contributions (NICs) bill to use the total of the employee and the employer NICs for the previous tax year? A: It is the employer (secondary) NICs only, in the tax year before the claim is made, that you need to use. Also, if the company receives any de minimis state aid that will also affect for what you can
claim. Guidance on the GOV.UK website can be found at https://bit.ly/2YEJwn2.
free of income tax liability. A similar provision applies for NICs. The exemption is for household expenses connected to the employee’s home where they must perform their employment duties. The exempt amount is £4.00 per week in tax year 2019/20 which in tax year 2020/21 has increased to £6.00 per week. Q: Does a salary sacrifice arrangement reduce the amount of attachable pay where an attachment of earnings order (AEO) operates for an employee? A: The legislation governing the AEO defines which earnings are included when calculating attachable pay. A salary sacrifice arrangement reduces earnings. The employer is giving the employee a benefit instead of cash, and benefits are disregarded for determining attachable pay. Q: Due to the coronavirus crisis the company has decided to offer employees a loan of up to a maximum of £5,000 to be repaid over a twelve- month period. Would this be a reportable loan? A: As this amount is below £10,000 it would be considered a ‘small loan’ and therefore it would fall within section 180(1)(b) of ITEPA. As long as the employee repaid the loan (salary sacrifice cannot be used for the exemption to apply) from pay after PAYE and NICs have been calculated and deducted, then even if the repayment crosses tax years there will be no reportable duties or tax or class 1A NICs due. If the employee has another loan which takes them above £10,000 then there will be a reporting requirement and liability. Q: Can you please advise how as an agent I can become authorised to act online for my clients, so I can make claims under the Coronavirus Job Retention Scheme (CJRS) for them?
Q: One of our line managers wants to ensure their staff can get to work during the lockdown period by using taxis instead of public transport and wish to reimburse such costs. Would this create a taxable benefit? A: A journey the employee takes to travel to their normal place of work is treated as ordinary commuting. If the employer reimburses the employee for the costs of the taxis the amounts are subject to pay as you earn income tax (PAYE) and NICs through the payroll. If the employer pays an allowance this will also be subject to PAYE and NICs through the payroll. If the employer pays the taxi company, then it is a reportable benefit. The following link should be useful: https://bit.ly/3e0CI8z, as it explains what benefits are exempt due to coronavirus. Q: A client has decided to payroll benefits. Is there a deadline for applying to HMRC? A: Yes, an employer would have to register with HMRC that they were going to payroll expenses and benefits. They must do this before the start of the new tax year i.e. before 5 April of the year the benefit is provided. GOV.UK has information on what to do and how to register: http://bit.ly/2uL3egN. Q: Several employees who worked from home last year received from our employer £4.00 a week for household expenses. Was it correct not to subject these payments to PAYE or NICs? A: If the employees do not have a choice but are required to work from home by the employer then under sections 316A and 336 of the Income Tax (Earnings and Pension) Act 2003 (ITEPA) an exemption means they can receive a certain payment
The CIPP Advisory Service is available * 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m. to 4.30p.m. on Fridays. Call 0121 712 1099 or email advisory.service@cipp.org.uk .
| Professional in Payroll, Pensions and Reward | June 2020 | Issue 61 10
*please see summary at cippmembership.org.uk for details.
Made with FlippingBook - Online magazine maker