Professional June 2017

Professional June 2017

Official publication of The Chartered Institute of Payroll Professionals

in Payroll, Pensions & Reward

Issue 31 June 2017

CIPP’s Annual Conference and Exhibition 2017

National Payroll Week Spotlight on payroll

CIPP Annual Excellence Awards Casting enlightening nominations

Confessions of a payroll manager “And the winner is…”

CIPP update | Policy hub | Professional development

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People never lie so much as after a hunt, during a war or before an election. Otto von Bismarck (1815–1898)

Editor’s comment

The snap general election resulted in deep cuts being made to the extensive content of the 2017 Finance Bill to

pages 41–46. This issue also includes a roundtable on the changes to taxation of off-payroll working in the public sector (see page 18). I recommend you read all the insightful comments of the participating industry luminaries to comprehend the impact of these changes, particularly as the rules might be extended to the private sector at some not-too-distant date. Issue 32 (July/August) of the magazine will include the final instalment. And, finally, those who enjoy the Confessions articles will find this issue’s revelations on page 54.

Whether summer has hit the UK yet or not, I’m very fortunate to be writing my chair’s message this month from gloriously sunny Florida. It’s not every day that we can spend a full day at work and then have a couple of hours laying beside the pool – and I certainly don’t take it for granted, as I don’t most things in life. I’m really enjoying working on a new payroll implementation project based in the United States and spending a few weeks in several different US locations meeting local teams, as well as attending both the American Payroll Association congress in Orlando, where I’m a guest speaker, and the Canadian Payroll Association conference in Niagara. When I joined the CIPP back in 2002 after studying for my Diploma in Payroll Management, I could never have imagined that I imagine there will be a second 2017 Finance Bill after the election and possibly another (emergency) budget before the autumn budget. So, some if not all the withdrawn measures are likely to be resurrected, perhaps with retrospective application. Employee welfare and wellbeing is the feature articles topic this issue. This is a broad subject, which has rapidly moved upward in employers’ priorities, that embraces financial issues and health matters. With Brexit ahead, are we likely to see employers increasingly focussing on such policies to retain employees? See Chair’s message ensure fast passage into law of retained provisions. See page 4 for details. Clause one was retained – regrettably, some might think – as it imposes income tax for the current fiscal year.

Mike Nicholas MCIPP AMBCS Editor

my association with this wonderful organisation would open up so many opportunities for me. As Ken mentions in his message below, speaking with George Powell recently about his vision made me think how amazing it is that one little seed can grow into such a unique organisation. In this edition, on page 5 you’ll see we’re now actively looking for the right individuals to nominate themselves as part of the CIPP board to continue building for the future. If you want to discuss it further with any of the current board, or if you would just like to nominate yourself, we’d love to hear from you.

Eira Hammond FCIPPdip Chair, CIPP

CEO’s message

Hopefully this finds us all enjoying some inkling of summer coming our way. The CIPP board have recently concluded a strategy review of our lines of business, with a focus on how we can continually improve our service offerings to the

accurate content. Digital first is also high on our agenda as we look to provide more online content, within training and qualifications. And a new look prospectus is also being released this month, so look out for that in your mailbox. It was a pleasure to invite and meet up with retiree George Powell here in the CIPP office in early May. For those unaware, George was the gentleman who originally had the ‘dream’ of setting up a professional body for the payroll profession, and is the reason why today you have membership of the CIPP. A future issue of the magazine will include an article on George’s visit.

membership base. This is something we, like most organisations, carry out on at least an annual basis and with some detailed preparation and input from the CIPP management team. From reviewing our mission and values, right through to the uniqueness of the Chartered Institute we concentrated on those areas to receive special focus for this year. Our immediate focus will be in ensuring a clear payroll, pensions and reward career path through our education portfolio which includes a world class training provision with a unique review process where our payroll and HR legislation update course is no older than seven days old in terms of

Ken Pullar FCIPP Chief executive officer, CIPP

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| Professional in Payroll, Pensions and Reward |

Issue 31 | June 2017

in Payroll, Pensions & Reward PROFESSI NAL

Also available online at payrollpensionsandreward.org.uk

Contents

June 2017

41

Financial wellbeing

Brian Hall reveals the effect absence from work can have

Features

18

10

16

Hey dude – it’s an emergency Peter Minchinton sounds alarm about HMRC’s response

Workers’ services provided to public sector through intermediaries Roundtable with industry luminaries

Apprenticeship reforms Jason Clark provides an update

28

31

30

Is 2017 the time to check- in? Chris Kerridge and Neil Tonks discuss performance management of work

Gender pay gap reporting Samantha Mann questions whether the glass ceiling will be broken

Surviving the next industrial revolution Doug Sawers discusses the role of HR

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34

Editor Mike Nicholas 01273 412 836 | [email protected] Advertising Jill Bonehill 0121 712 1033 | [email protected] Design James Bartlett and Nicole Gumery [email protected] Printing Warwick Printing Company Ltd

Redundancy alternative, dismissal for poor attitude, worker status Nicola Mullineux reviews decisions in three casesmotivation

Dress redress Danny Done discusses developments

38

42

Chief executive Ken Pullar FCIPP CIPP board of directors

Employee wellbeing - simple! Lisa Gillespie relates her experiences and provides helpful advice

Can we get beyond politics? Henry Tapper conveys exasperation and concern

Gordon Cresswell FCIPP Jason Davenport ACIPP Eira Hammond FCIPPdip Ros Hendren MSc FCIPP, Mgr, FCMIdip, FHEA Paul Rains MCIPP Karen Thomson MSc FCIPP, FHEA Cliff Vidgeon FCIPP Ian Walters Msc, FCIPP, FHEA Ian Whyteside MCIPP, FMAAT, ATT

43

Workplace inactivity Charles Alberts explains what we can do

Useful contacts Membership [email protected] 0121 712 1073 Education [email protected] 0121 712 1023 Training [email protected] 0121 712 1063 Events [email protected] 0121 712 1013 Marketing and sales [email protected] 0121 712 1033 General enquiries

Regulars

01 Editor’s comment, and Chair’s and CEO’s message 04 Membership insight On your behalf, Advisory, Five minutes with 11 Professional development Diary of a student 12 Events horizon 14 CIPP update CIPP delivers excellence in training, Compliance accreditations Events, news and developments

36 Pensions news 37 Pensions insight 41 Feature articles

The Pensions Regulator

Employee welfare and welbeing

47 Industry news 48 A week in the life of 54 Confessions of a payroll manager

[email protected] 0121 712 1000

cipp.org.uk @cipp_uk

Articles Please support this magazine so that it can continue to be a part of your membership package. Trademarks The CIPP logo, the initials ‘CIPP’ and the words ‘Professional in Payroll, Pensions and Reward’ and ‘CIPP Consult’ are trademarks of the Chartered Institute of Payroll Professionals. Copyright: The Chartered Institute of Payroll Professionals 2017. The Chartered Institute of Payroll Professionals, CIPP, Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, West Midlands, B90 4ZL. Switchboard 0121 712 1000 Fax 0121 712 1001 Copyright This magazine is published by The Chartered Institute of Payroll Professionals in whom the copyright is vested. All rights reserved. No part of this publication may be reproduced, stored in a retreival system, or transmitted in any form or any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. The views expressed in this publication are not necessarily those of the CIPP or the editor. The information and comment contained in this publication are given in good faith, their accuracy or completeness cannot be guaranteed.

15 Payroll news 16 Payroll insight 28 Reward insight

Additional online content: 37 Getting pensions governance in shape 44 Employee back pain

Includes roundtable on off- payroll working

45 Holistic approach 46 Wellbeing schemes

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| Professional in Payroll, Pensions and Reward |

Issue 31 | June 2017

MEMBERSHIP INSIGHT

On your behalf

Policy team update

Diana Bruce MCIPPdip, CIPP senior policy liaison officer, provides an update about legislation, some CIPP polls and the CWG2 guide

General election We normally include a consultation update in On Your Behalf, but the announcement of a snap election to be held on 8 June 2017 has delayed consultation proceedings somewhat. On 21 April, the government went into the pre-election period known as ‘purdah’ and during this time only essential government business is meant to take place so expected publications are also delayed. The government’s own guidance says that in a period of purdah “decisions on matters of policy on which a new government might be expected to want the opportunity to take a different view from the present government should be postponed until after the election, provided that such postponement would not be detrimental to the national interest or wasteful of public money”. We have already seen the impact of purdah through the dramatic shortening of what would have been the longest Finance Bill in history. The Bill, which originally stood at 762 pages, has been reduced to approximately 140; the committee stage debate was limited to four hours, and all Treasury Select

Committee evidence sessions were cancelled. As a result, some changes affecting the taxation of benefits from employment, which were to have taken effect this tax year, were removed: ● the time limit for making good ● ultra-low emission vehicles ● employer-provided pensions advice ...changes affecting the taxation of benefits from employment, which were to have taken effect this tax year, were removed... ● termination payments, and ● PAYE settlement agreements. Clauses dropped included those on making tax digital and penalties for enablers of defeated tax avoidance schemes. At the time of writing, party manifestos had not yet been published but it is highly likely that the general election will bring more changes. The prime minister has refused to confirm whether or not previous manifesto pledges not to raise tax or National Insurance will be retained, and the Labour party manifesto is expected to include a pledge to increase taxes. We shall have to wait until after the general election to find out just which clauses and schedules will be resumed

in the Finance Bill. And, once a new government has been formed, the complexity of the Brexit negotiations will recommence. CIPP quick polls ● Brexit negotiations – Through the second half of April and first half of May we ran a poll on our website asking if you were optimistic about the prime minister having the legal power to start Brexit negotiations. The snap election has of course been announced since then and is well under way while you are reading this; however, the responses to this question showed that 43% were confident, 47% were not and 10% were indifferent to the whole process. 936 people responded to the poll in total. ● Real time information (RTI) reconciliation – One of our members was interested to know whether other agents were having issues with full payment submission (FPS) values not reconciling with payments to HM Revenue & Customs (HMRC). We asked through our poll, “Do you currently have RTI issues where FPS values do not balance with what is being paid to HMRC?”. We received 388 responses in total: ● 61% said yes, they currently have issues ● 31% said they did not, and ● the remaining 8% said they did have issues but they have now been resolved. Of course, what we do have to bear in mind with these results, and any of our poll results, is that it is only a snapshot in

| Professional in Payroll, Pensions and Reward | June 2017 | Issue 31 4

Membership insight

time so this may not be as widespread an issue as it would appear. We would have to conduct a far more in-depth survey to find out the real picture. If any CIPP members would like to share any issues with the Policy team, or other members, you can either email us at [email protected] or post your commentary on one of our SIGs (specialist interest group) which are situated under ‘My CIPP’ on our website. ● Continuing professional development – At the time of writing we had started a poll asking if you remember to log your continuing professional development (CPD). Early indications showed that 13% of respondents always log their CPD, 56% sometimes do and 23% never do; with the remaining 8% opting for “I don’t need to for my role”. Again this is only a snapshot and we would have to delve deeper as to respondents’ membership status (as anyone can complete our polls) and the rationale behind the answers. It could be lack of time, lack of motivation or maybe not understanding the importance of logging CPD – all questions for a future

suitable index added to the guide. So, for anyone who suffered the frustration of the CWG2 when it was first updated in a non PDF format in February, it is now easily searchable with the welcome addition of an index. Someone within HMRC also highlighted that there is a way of bringing up a search box in most documents and on most browser pages: press keys Ctrl and F – who knew? Maybe you did, but we did not in the Policy team and are most grateful for this useful tip. n

survey, perhaps? All published information on our polls and surveys can be found in the CIPP’s Policy News Journal , a benefit reserved exclusively for members. If you would like to take part in our latest poll it is situated to the right of all of our news items on the CIPP website. ...lack of time, lack of motivation or maybe not understanding the importance of logging CPD... The CWG2 guide In case anyone missed our news item about the CWG2 – the Further guide to PAYE and National Insurance contributions – it is one of the unfortunate guides that has not retained its user-friendly PDF format on GOV.UK. We did of course ask HMRC about this change and we were very pleased to subsequently see a

AGM17 Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting (AGM) of the Chartered Institute of Payroll Professionals (trading as CIPP) will be held on Tuesday 5 December at 11.00 at the CIPP, Arne Street, Covent Garden, London, WC2E 9RA. Ordinary business To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary resolutions: 1. Approval of minutes from AGM 2016 2. To elect directors to the board 3. Approval of accounts for the year ended 30 June 2017 Notes The deadline for submitting further agenda items is 31 July 2017 . This is the Institute’s twentieth AGM.

Any member wishing to stand as a board director should send a completed nomination form and accompanying documentation, received by the company secretary no later than 31 July 2017 .

4. Election of auditors 5. Any other business By order of the board

Gordon Cresswell FCIPP, company secretary Chartered Institute of Payroll Professionals Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, B90 4ZL

Attendance at the AGM is free to attend for CIPP members. Should you wish to attend, please book via our website at cipp.org.uk

cipp.org.uk

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| Professional in Payroll, Pensions and Reward |

Issue 31 | June 2017

MEMBERSHIP INSIGHT

period then they would be included in the reporting. This link – https://goo.gl/0Plwjd – to guidance on GOV.UK details what an employer should do in the circumstances where a new employee joins part-way through the pay period, or an existing employee has changed their working hours in the pay period. This explains that if the employee has changed their hours you would calculate the hours over a twelve- week average. ● For new employees and changes in role: Where a new employee joins or an existing employee changes their role and they have worked less than twelve weeks in the new position, you must use a figure that fairly represents the hours worked. ● For new employees: You can use an average over a shorter period if you believe it fairly represents their working hours. If they have replaced someone who was previously working longer or shorter hours you can create a twelve-week total by using a mixture of the old and new employees’ hours. For employees changing role you would take a twelve-week average, even if the period covers more than one role. Q: We would like to know if the tax exempt amounts of childcare vouchers (CCVs) an employee can receive have changed in any way? Also, will the limits be different between England and Scotland now that their tax thresholds are slightly different? A: The tax exempt amount of CCV an employee can receive for each tax bracket has remained the same, but you would have to consider which tax bracket the employee falls into. The thresholds can change each year; the current thresholds for 2017/18 tax year are: ● basic rate up to £33,500 – CCVs up to a maximum of £243.00 ● higher rate from £33,501 to £150,000 – CCVs up to a maximum of £124.00 ● additional rate over £150,000 – CCVs up to a maximum of £110.00. The eligibility criteria for employer- provided CCVs are not devolved to the Scottish parliament and therefore the basic and higher income tax rates mentioned above are for the whole of the UK including Scotland. This means that Scotland has the same limits as the rest of the UK in regards to CCVs and the annual assessment.

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 [email protected] or visit cipp.org.uk for frequently asked questions.

Advisory

*please see summary at cippmembership.org.uk for details.

Q: Within our company we have an employee who is provided with hire vehicles instead of a company car. The hire period can be for two to three days every week and can span a weekend. How would this be reported in a P11D return? A: This will depend on the conditions the hire car has been provided to the employee. If a hire car is made available to an employee who does not have the use of a company car, then there will be no benefit in kind arising; this would include if the car was only provided for business travel with only ‘incidental’ private use. HM Revenue & Customs’ (HMRC’s) guidance states that incidental private use is not measured by the number of private miles driven, but rather in the proportion of the private element of the journey when viewed as a whole. A hire vehicle provided for a business journey which is taken home overnight to serve this purpose the following morning will be classed as incidental private use, but if the vehicle was taken for private use over a weekend that would not be considered incidental. If the hire car is used for more than incidental private use, a benefit in kind charge will arise, which is calculated using the normal rules i.e. using the list price and CO2 emissions of the vehicle provided. This will be apportioned in the tax year according to the time it was available to the employee and reported in the P11D return. Where a hire or relief vehicle is used as a replacement for both business and private use during periods of unavailability, the company car benefit will still apply when this is for a continuous period of less than thirty days.

Q: I believe that for employees who have passed away, no Class 1 National Insurance contributions (NICs) should be calculated on their final payment. Does this rule apply the same for a recently deceased director or should we pro rata his final payment up until the tax week of death? A: A director’s NICs have to be calculated on an annual basis when they leave/ or pass away. If you have been using the alternative method then in March or when a director ends the employment (or dies) the calculation reverts to an annual calculation. To clarify, when a director passes away you should calculate the NICs due on the final payment in the following way: the director will pay NICs as normal on earnings paid or due to be paid before death but no NICs will be due on earnings due to be paid on or after the date of death. Further guidance can be found in the CA44 National Insurance for company directors (http://bit.ly/2oIzVcw). Q: Can you clarify the guidance on two questions regarding gender pay gap reporting: ● Do we include new starters who have not worked the complete pay period (April 18) in the reporting, or would we pro rata their pay over the time they have been employed? ● If an employee has changed role/ hours or pay within the snap shot period does this >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58

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