Professional November 2016

Professional November 2016

in Payroll, Pensions & Reward PROFESSI NAL Issue 25 November 2016 Official publication of The Chartered Institute of Payroll Professionals

Staff development

Is a robot after your job? Sharing knowledge

Employing illegal workers Puzzling legalities

Simplifying the PSA process Gear change ahead

CIPP update | Policy hub | Professional development

welcome

Editor’s comment

– protested against newly developed labour-economising technologies. (Incidentally, income tax was created in this period.) Now, ‘Luddite’ describes a person “opposed to industrialisation, automation, computerisation or new technologies in general” (source: https://en.wikipedia.org/wiki/Luddite). While it’s understandable to fear new technologies and ways of working, I firmly believe that going forward payroll professionals will continue to embrace ‘robots’ in order to get the job done efficiently and effectively and that payroll will increasingly demand high levels of skill and knowledge.

Occasionally I have cause to recall potent imagery from the 1927 film Metropolis : low-skilled workers operating machines in mechanistic, almost robotic, movements pressing buttons and levers; and the creation, at the direction of the city’s master, of a female android (a robot in human form) which proceeds to cause chaos. Unsurprisingly my attention was caught by Henry Tapper’s article ‘Is a robot after your job?’ (page 46). Henry opines that “Working with robots may be the only way that payroll will be able to meet the increasing demands being put upon it.” Although I don’t believe a real android will be created any time soon, I agree with Henry’s opinion simply because computerisation has been and will continue to be transformational in payroll. Workers inevitably react to threats to their livelihood. In the early 19th century, the Luddite movement – which emerged during the harsh economic climate of the Napoleonic Wars

Mike Nicholas MCIPP AMBCS Editor

This month’s contributors

Ilya Bonic uk.mercer.com

Sarah Bradford BA (Hons), ACA, CTA (Fellow) [email protected]

Diana Bruce MCIPPdip [email protected]

Danny Done portfoliopayroll.com

Stuart Earle eversheds.com

Stephen Frost frostincluded.com

Helen Hargreaves MSc FCIPPdip [email protected]

John Harling pstax.co.uk

Nicola Mullineux peninsula-uk.com

Samantha Mann MCIPPdip [email protected]

Lisa Gillespie moorepay.co.uk

Jeanette Hibbert [email protected]

Henry Tapper MSFA MA Cantab firstactuarial.co.uk

Neil Tonks MCIPPdip midlandhr.com

Adam Reynolds webexpenses.com

David Woodward sdworx.com

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Issue 25 | November 2016

| Professional in Payroll, Pensions and Reward |

in Payroll, Pensions & Reward PROFESSI NAL

Also available online at payrollpensionsandreward.org.uk

Contents

November 2016

34

Extending parental leave policies

Ilya Bonic discusses global developments

Features

18

16

17

Termination payments John Harling reviews recent developments and forthcoming changes

Disguised remuneration Sarah Bradford outlines proposals to tighten the rules

Check-off and facility time Mike Nicholas sets out changes

20

23

22

Learning and development Lisa Gillespie explains that cutting training and development is often a false economy

Simplifying the PSA process Samantha Mann reviews consultation proposals

Staff development Jeanette Hibbert provides guidance on this crucial issue

| Professional in Payroll, Pensions and Reward | November 2016 | Issue 25 2

26

32

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

Employing illegal workers – the net tightens Helen Hargreaves brings us up to date with frequently changing legislation

How to build a meritocracy Stephen Frost reveals what needs to be done

42

35

Chief executive Ken Pullar FCIPP CIPP board of directors Gordon Cresswell FCIPP Michelle Crook MSc FCIPPdip

Navigating the Brexit challenge David Woodward discusses HR strategies to stay in control

Automatic enrolment and pay reference periods Guidance from The Pensions Regulator

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

46

49

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

Is a robot after your job? Henry Tapper discusses how the role of payroll professionals could change

Managing petty cash Adam Reynolds explains a smart way is available

Regulars

05 Chair’s and CEO’s message Events, news and developments 06 Membership insight On your behalf, Advisory, Five minutes with 11 CIPP update 13 Professional development Diary of a student

31 Reward news 32 Reward insight 41 Pensions insight

Employment law cases, Business relocation

0121 712 1000 [email protected]

Pensions bulletin: VAT and pension scheme costs, The Pensions Regulator, ONS survey of occupational pension schemes

cipp.org.uk @cipp_uk

14 Payroll news 15 Payroll insight 22 Feature articles 28 Event horizon

47 Pension news 48 Charity news 50 A week in the life of 51 Confessions of a payroll manager

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 2016. 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.

Industry monitor: Company cars and payrolling

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Issue 25 | November 2016

| Professional in Payroll, Pensions and Reward |

FREE Employment Law advice

We’re offering CIPP members FREE* access to our experienced team of HR & Employment Law subject matter experts during 2016 (*T&C’s apply). Call the CIPP/Moorepay Employment Law & Advice Helpline quoting CIPP001 on 0845 1844607.

*T&Cs: Telephone advice & guidance only. The service is available from 9am to 5pm Monday to Friday until 30th November 2016. A Fair Usage Policy applies (maximum of 3 calls on one ongoing HR case).

Payroll & HR Solutions

If you do not change direction, you may end up where you are heading. Lao Tzu (6th century BC)

Chair’s message

Autumn is one of those times in the year when things seem to ramp up in the payroll industry. I know we have year-end and some legislation changes in the spring but

enjoy most about the conference, and to get feedback on where we can improve for future years. Autumn also seems to be the time for new starts. Those of you who know me fairly well, or follow me on Twitter (@eirajane), will know that for the past two years I’ve been involved (for the first time in my life) in musical and theatrical productions of Jesus Christ Superstar . With a cast of over 200 for each year, we performed the iconic rock opera in the wonderful surroundings of Lincoln Cathedral. A few weeks ago we had the great news that the show being performed next year will be Jekyll and Hyde the Musical . This will be staged once again in Lincoln Cathedral next August, and I’m delighted to be able to join the cast again. Rehearsals have just commenced and this time, as there are a few more female parts up for grabs, I’ve decided to audition… I can just see myself as Lady Beaconsfield, one of the board of governors. Whether I’m successful or not doesn’t matter – it’s all about having a go. And solo part or not, I’m going to enjoy being part of this community theatre again for a third year.

autumn seems to be the time for celebration. The Annual Conference took place at the Celtic Manor Resort, Newport on 6 & 7 October and was a spectacular event as usual. Since taking over from Paul Rains as chair in August, I had a few more duties at this year’s event than in the past: overseas guests to host, as well as opening and closing the conference and introducing our keynote speakers, not to mention presenting the awards gifted by the CIPP at the Annual Excellence Awards hosted by Simon Weston. I always thoroughly enjoy the conference, meeting lots of old friends as well as many new ones, and I always try to make the most of the learning experience for my continuing professional development. This year was no exception, with brilliant workshops and speakers covering a variety of topics in payroll, pensions, reward, global payroll and personal and professional development – meaning that there was something for everyone. You can read more about the conference within this year’s supplement included with this issue. For those who joined us for the full conference, or attended the glitzy and glamorous Annual Excellence Awards, thank you for your support; it was fantastic to see you all there celebrating your industry. It’s wonderful for me to hear all about what you It has been a few years since I last wrote within the magazine, and at that time it was as chair of the (then) IPP. I now write to you as CEO of the CIPP. My introduction to you as CEO is during one of the CIPP’s busiest periods, and I was delighted to meet so many of you at the CIPP’s Annual Conference and Exhibition, and celebrate with our winners at the Annual Excellence Awards. Those of you who attended the annual general meeting (AGM) at the Annual Conference in October will have heard about the board’s plans for the CIPP, and, importantly, our renewed focus on our core business. We plan to make sure that our education and membership support offerings are fit for purpose, and that you, as members, can be assured of excellent quality from any of the services which you engage in through us. There is a summary of the AGM on page 11 and we shall be surveying members shortly to assist us in our future plans and developments. November is also a time for celebration as we hold our Graduation Ceremony for those who have successfully

Eira Hammond FCIPPdip, chair, CIPP

CEO message

completed our university approved qualifications. I am looking forward to welcoming the newly qualified CIPP

graduates and members on 4 November at the Dominion Theatre in London. Remember to maintain your membership with the CIPP and

keep your knowledge and skills up to date through continuing professional development (so that you can use your well-earned letters after your name). With the graduation taking place this month, it is quite fitting that the theme for this issue is staff development, covering identifying and assessing learning needs, as well as developing skills gaps through training and qualifications. Happy reading.

Ken Pullar FCIPP, CEO, CIPP

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Issue 24 | October 2016

| Professional in Payroll, Pensions and Reward |

MEMBERSHIP INSIGHT

On your behalf

Policy team update

Diana Bruce MCIPPdip, CIPP senior policy liaison officer , provides an update on two topics Off-payroll working in the public sector consultation time, and where they do the decision flow chart and tests may need to be revisited.

by the engager to enable the correct decision to be made. If clearly defined and consistent rules don’t exist then the impetus to deliver/disclose information will not happen. The digital tool (see below) should be backed by clearly defined expectations of what information needs to be gathered and provided and by whom. Guidance should be unambiguous to enable engagers to adapt or establish processes and a clearly defined policy which should include reference to the digital tool. ...support for private companies carrying out public functions to be included... ● Making the decision – The decision flow chart appears to ask the right questions with the right priority and to rule out engagements that are out of scope and to be simple to understand and use. The reality, however, is rarely straightforward, and so we hope that guidance is being developed that adds more depth and includes more examples that an engager may encounter. There should be a recognition that IR35 guidance will, in the future, be accessed by a far greater number of practitioners than in the past as the onus shifts from the small number of PSCs (and their professional advisers) to a wide range of engagers/employers with teams working in payroll, human resources, finance and procurement departments. If all facts are known, the two parts of the decision flow chart have the capacity to provide engagers with certainty on day one of the hire – in an ideal world. Processes will need to recognise that situations and answers may change over the course of

Budget 2016 announced proposals to reform the off-payroll rules for personal services companies working for a public sector engager. This consultation, which is about reforming the intermediaries legislation to improve its effectiveness in the public sector, sought views on the impact and on the design details of the policy, including a new digital process to help determine whether an intermediary is in scope. The Institute’s policy and research team submitted their formal consultation response to this consultation at the end of August. We reiterate that we respond from the viewpoint that use of a personal service company (PSC) simply to gain a tax or National Insurance contributions (NICs) advantage is unacceptable. We continue to support increased enforcement by HM Revenue & Customs (HMRC) that results in increased protection of vulnerable workers employed inappropriately through PSCs. Our findings, see below, have been gathered from a mix of survey results and anecdotal evidence. ● Definition of the public sector – The Freedom of Information Act 2000 and the Freedom of Information (Scotland) Act 2002 provide a definition that will result in a clearly recognised and consistent approach to defining and recognising public sector engagers. There is overwhelming support for private companies carrying out public functions to be included within this definition; in fact, we go further and say that subject to a satisfactory timeline for implementation (see below) no sector or size of engager should be excluded. Evidence suggests that all sectors and engager/employer sizes are at risk of non- compliance with IR35; to exclude sectors adds complexity. We believe that there should be a legal duty to disclose the information required

Also in an ideal world, this information and >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 Page 59 Page 60

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