Professional December 2017/January 2018

Professional December 2017/January 2018

Official publication of The Chartered Institute of Payroll Professionals

in Payroll, Pensions & Reward

Issue 36 December 2017/January 2018

It’s that time of year

Succession planning Out with the old A digital delivery In with the new 5 minutes with CEO reviews and previews

CIPP update | Policy hub | Professional development

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Payroll & HR Solutions

“Where unwilling dies the rose; buds the new another year.” Dorothy Parker (1893–1967)

Editor’s comment

When writing this I was moved to review the equivalent issue in 2016, which poignantly carried the unhappy news of the premature death of Michelle Crook. Please see page 10 for news of a special posthumous award for Michelle.

whose support and input production of the magazine would be impossible. Particularly meriting of my gratitude are: Nicole Gumery and James Bartlett of the design team for consistently delivering high-quality issues of the magazine and supplements; Helen Hargreaves and the policy team for steadfastly satisfying my never- ending demand for first-class, topical and informative articles; and Emma Rowbottom and the marketing and communications team for ensuring timely delivery of regular in-house content and willingly chasing overdue contributions. I wish everyone a great festive season.

Sadly, this issue carries news of the similarly untimely death of CIPP member Jill Howell. Page 10 has further details, including the tragic circumstances of her death. On a much happier note, I was delighted to receive recently a message from Norman Scholes who some with long memories may recall was an industry luminary active in local government payroll/pensions some years ago. Please see page 14. As the end of the year draws near, it’s the appropriate time for me to extend thanks to all those at the CIPP and beyond without

Mike Nicholas MCIPP AMBCS Editor

At this time of year, I always reflect on what has happened during the year, in respect of both challenges and successes, to review ‘lessons learnt’, and to start gearing up for another year, where hopefully Chair’s message

the Annual Payroll Conference and Exhibition where I was absolutely thrilled to launch Individual Chartered Status. Those of you who apply for and receive this status will be recognised within the industry as achieving the highest level in the profession, committed to compliance and best practice in payroll and pensions administration and management. I look forward to receiving the outcome of my own application and joining what I hope to be the company of other payroll professionals who see the benefit of achieving this accreditation in the future. Thank you for your support this year at our CIPP events; you, our members, are key to the CIPP’s future success and I thank you for your continued membership in future years. If you are celebrating, I wish you all a very blessed Christmas and a successful, happy and healthy 2018.

things will get even better. Looking back, we’ve had a few changes that have had an impact on payroll, and us as individuals, in the UK. We had the change to national minimum and living wages in April, the introduction of the gender pay gap and the apprenticeship levy, and regular voluntary overtime payments being included in the calculation of statutory holiday pay. So, just a normal year in payroll terms. We had a surprise general election and the phasing out of the old £5 and £10 notes, and a new £1 coin – and, to top it all, the Great British Bake Off moved to Channel 4. Personally, I had a successful year, with several trips to the USA with my current employer, some brilliant CIPP events, including the launch of National Payroll Week at the House of Commons, the Scottish National Conference, the Graduation and of course

Eira Hammond FCIPPdip Chair, CIPP

Well, at the time of writing ice was being CEO’s message

benchmark. They can all be very proud of what they have achieved. And not forgetting the announcement of Individual Chartered Status (ICS) for those meeting the necessary criteria. Applications have already been received for Chartered membership and they will be evaluated and announced shortly. This is a real step forward for our industry. Finally, on behalf of all the staff and board here at CIPP, I wish you all a well-deserved break over the Christmas and New Year period. May it be spent with family, friends and loved ones.

scraped off the car prior to travelling to work. The forecasters are (again) predicting a bad winter, so when you receive this magazine let’s see what the

weather has brought. What has this year brought? Well, we concluded our year in style with a very successful Annual Conference and Excellence Awards ceremony at Celtic Manor where excellence was duly awarded with the most able assistance of our superb after dinner speaker Sir Trevor McDonald OBE. And showcasing the end of 2017 was the superb Graduation Ceremony held at the Symphony Hall in Birmingham where we celebrated the success and much hard work of qualified payroll and pension professionals. A superb day, and congratulations due to all who are worthy holders of a qualification that represents an industry

Ken Pullar FCIPP Chief executive officer, CIPP

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| Professional in Payroll, Pensions and Reward |

Issue 36 | December 2017/January 2018

in Payroll, Pensions & Reward PROFESSI NAL

Also available online at payrollpensionsandreward.org.uk

Contents

December 2017/January 2018

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Decision making processes and less favourable treatment

Nicola Mullineux reviews the decisions in three cases

Features

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Succession planning Karen Greenbaum discusses leveraging Gen X and Millennial talent

It’s that time of year Neil Tonks discusses impending changes to software

Termination payments John Harling discusses impending important changes

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All bark and no bite? Sarah King contends that the Gender Pay Regulations are effectively toothless

Should my business appoint a captive IFA? Henry Tapper looks at the accompanying business case

AE and retirement Malcom Booth discusses the challenges for society

| Professional in Payroll, Pensions and Reward | December 2017/January 2018 | Issue 36 2

The revolution in online payslip services Paul Gibbons explains why in the digital age not all e-payslips are equal 37

Focusing on poor mental health in the workplace Danny Done discusses the new guidance and proposals 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

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Chief executive officer Ken Pullar FCIPP CIPP board of directors

e-payslips and employee benefits in a cash-free future Lisa Gillespie provides insight to payment related developments

A digital delivery Kavitha Sivasubramaniam says it’s all about costs and needs of the workforce 46 Encouraging workplace whistleblowing Aziz Rahman gives tips on putting whistleblowing policies in place

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

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Accentuate the positive Charlie Knox argues that GDPR is all about transparency and collaboration

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 09 Events Horizon 10 CIPP update First ICS awarded, death of member, graduation ceremony 11 Professional development

23 Pensions news 24 Pensions insight

Includes: TPR – Increases in minimum contributions

30 Reward news 31 Reward insight 37 Feature articles e-payslips 42 Industry news 52 Confessions of a payroll manager Additional online content 24 What’s wrong with pensions engagement 43 Manual payroll calculations have value (in USA) 44 Decision intelligence

[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.

13 Charity news 14 We’ve got mail 16 Payroll news 17 Payroll insight

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| Professional in Payroll, Pensions and Reward |

Issue 36 | December 2017/January 2018

MEMBERSHIP INSIGHT

On your behalf

Policy team update

Diana Bruce MCIPPdip, CIPP senior policy liaison officer, provides an update on a recent CIPP quick poll, voluntary payrolling, gender pay gap reporting and scam calls

BiKs and cash options Are you aware that if you offer employees a benefit in kind and they have a choice of a cash option, the tax and National Insurance contributions (NICs) rules have changed? This is the question we asked during October through our website quick poll. Anyone can respond to these polls, not just members of the CIPP. We received 579 responses in total and 55% said they were aware of the changes but the remainder – a staggering 261 people (45%) – said that they were unaware of the changes. Our polls are just a snapshot in time so not an accurate reflection, but these results indicate that there is further work to do around raising awareness to ensure employers are being compliant with the change in legislation. If you’re wondering what are the changes I am talking about then please read on and share with others. Optional remuneration arrangements (OpRA) which came into effect from 6 April 2017 are essentially the government’s way of trying to remove some of the previous tax and NICs breaks which came about if salary sacrifice was used to pay for benefits

in kind (BiK). Although salary sacrifice is very much still with us, there are two types of ‘arrangement’ that come under OpRA. Type A arrangements is the first and are what employers have regarded as typical salary sacrifices, where an employee gives up cash earnings in exchange for a BiK. Type B arrangements are where an employee chooses a benefit rather than a cash allowance, such as a car or living accommodation. So, for the purposes of the ‘benefits code’, a benefit is provided under OpRA if it is provided under an arrangement of either type A or type B – so it isn’t just salary sacrifice that is captured. The benefits code has been revalued and the employee is taxed on whichever value is the higher – the cash or the benefit. However, where an employee receives, say, a car allowance, but there was no option to receive a company car, the employee is taxed on the car allowance – cash is cash, you process as you would have pre-April 2017. There are four specific exemptions where the rules haven’t changed: pensions, childcare, cycle to work and ultra-low

emission vehicles; these are the politically astute exceptions, so employees get to keep the tax and NICs breaks on those. Transitional provisions (also known as ‘grandfathering’) were brought in for arrangements in place before 6 April 2017; so, the new rules for these arrangements will take effect from 6 April 2018 for all benefits except cars with CO2 emissions of 76 grams per kilometre and above, employer-provided living accommodation, and school fees. The old rules will continue to apply for these three types of benefit until 6 April 2021. For further information on OpRA visit MY CIPP on our website – cipp.org.uk – where you will find a webcast (https://youtu.be/ ptj2V58vjcw) on this subject and also other topical webcasts – an easy way to update your team on aspects of payroll legislation. All published information on our polls and surveys can be found in the CIPP’s Policy News Journal (http://bit.ly/2oxTlh8), a benefit reserved exclusively for CIPP members. Voluntarily payrolling The CIPP’s Advisory service has been receiving calls about the change from voluntary to mandatory payrolling of company car >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

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