Professional October 2019

Professional October 2019

Official publication of The Chartered Institute of Payroll Professionals

in Payroll, Pensions & Reward

Issue 54 October 2019

National Payroll Week 2019

Going global Viewpoints

IR35 and the CEST tool Engaging

Outsourcing: relationship management Stakeholders

CIPP update | Policy hub | Career development

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“Life is too short not to celebrate nice moments!” Jurgen Klopp (1967–) (http://bit.ly/2kmLlmH)

This issue is a tad longer than usual because of the amazing content and support for National Payroll Week (pages 15–23). (More content can be found in the online version.) I draw your attention to the article ‘Payroll company fraud’ (pages 22/23) within

stages of the magazine beginning with the launch edition in 1994. (It would be four years later when NPW launched in the UK.) I recall receiving that issue with excitement, partly because at the time I was editor of the monthly newsletter Payroll Manager’s Review , which later evolved into a magazine, but also because it was a marvellous development for the Institute and members. As a payroll veteran, I am proud and very happy to see payroll celebrated and recognised. I hope you are, too.

the NPW section, which, amongst other things, records HMRC’s recognition of the important role CIPP plays in achieving compliance. This issue’s contents provide further confirmation of the fundamental importance of payroll. See, for example, ‘The impact of late or inaccurate payment’ (page 23), ‘On your bike’ (pages 26/27), and ‘It may be equal but is it fair’ (pages 33/35). This issue’s front cover depicts covers from three important

Mike Nicholas MCIPP AMBCS ([email protected]) Editor

Chair’s message

The globalisation of industry means many who only expected to look after domestic payrolls are faced with taking on payrolls for different countries by virtue of mergers and acquisitions that happen so frequently nowadays. For advantages gained in serving a

deliver well is an essential part of any discovery exercise when taking on new country responsibility. In the USA now, the gig economy is driving same-day payments for those who want immediate reward for a job done. We may well see a form of this being taken up as retailers and other industries look to differentiate themselves in the marketplace in the search for talent. Whilst this is effectively an advance payment from whichever pay-cycle you may be running, I think it should also come with a health warning to ensure that the individual requesting the same day payment is not taking themselves into a financially unstable position by not budgeting and planning appropriately. This may be an area where payroll professionals are asked for their input by their board of directors for consideration of application and approach within the business. The above health warning should be flagged as part of employee well-being, so that if required it is used appropriately. As always, I look forward to any feedback.

broader client base, it is imperative that those needing to service multiple countries take the time and diligence to be trained professionally in any new countries that are added to a service portfolio. Many individuals will have the opportunity in their careers to take on additional responsibility for other countries. Having worked globally earlier in my career, I would wholeheartedly support and encourage anyone with such aspirations. Not only does it provide opportunity for continued professional development – undoubtedly stretching and challenging you professionally – your own growth in understanding of different cultures and values will be enhanced personally; just as travelling broadens the mind. I recall in days of reviewing HR policy and payroll practices, an adage was used when reviewing processes that you should be global where you can and local where you must. The devil is in the detail and ensuring all steps are understood to be compliant and

Jason Davenport MCIPP MIoD ([email protected]) Chair, CIPP

It was a real pleasure to have celebrated the 21st anniversary of National Payroll Week at The Savoy. We had an excellent turn out with many distinguished guests, including support from our chair, Jason Davenport and our Chartered and fellow CIPP members. CEO’s message

outstanding number of quality submissions (way in excess of a 100) for our awards. I was able to thank the judges during the summer with a fine meal to express our gratitude for their time in supporting the profession for adjudicating these prestigious awards – and can testify to their independence in doing so! In November, we hold our graduation ceremony for those who have successfully completed our university-approved qualifications. It’s a time of great celebration, particularly so for the years of time and effort that have gone into successfully graduating. I never tire of seeing such a prestigious event supported by the friends and families of those successful.

It was great to celebrate the payroll profession with the Global Payroll Association, Reward Strategy and The Payroll Centre all playing an active part in promoting and educating payroll professionals. All of us recognise the need for ably taught and educated payrollers and it was great to share this vision through roundtable discussions and hosted events, including our very well- attended Scottish National Conference. We now look forward to a highlight of our year with Annual Conference and Excellence Awards ceremony at the Celtic Manor Resort on 2–3 October. We have a high calibre agenda with some excellent workshops to ensure the continuous professional development of our professionals and we continue to have an

Ken Pullar FCIPP ([email protected]) Chief executive officer, CIPP

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| Professional in Payroll, Pensions and Reward |

Issue 54 | October 2019

in Payroll, Pensions & Reward PROFESSI NAL

Also available online at payrollpensionsandreward.org.uk

Contents

October 2019

43

Going global

Jerome Smail presents

Features

22

26

24

IR35 and the CEST tool – the sage continues Peter Minchinton reveals

Payroll company fraud HMRC’s Fraud Investigation Service confirms

On your bike Diana Bruce races through

28

30

33

Outsourcing: relationship management Jason Davenport discusses

It may be equal but is it fair? Helen Hargreaves discusses

The parent problem AndrewWeir identifies

| Professional in Payroll, Pensions and Reward | October 2019 | Issue 54 2

38

36

Chief executive officer Ken Pullar FCIPP CIPP board of directors Jason Davenport MCIPP MIoD Stuart Hall MCIPPdip Ros Hendren MSc FCIPPdip CMgr FCMIdip FHEA Dianne Hoodless MSc ChFCIPP FHEA Liz Lay MSc FCIPPdip Karen Thomson MSc ChFCIPP FHEA Cliff Vidgeon BA (Hons) FCIPP CMA ACIS Ian Whyteside MCIPP FMAAT ATT Editor Mike Nicholas 0121 712 1000 | [email protected] Advertising Jill Bonehill 0121 712 1033 | [email protected] Design James Bartlett and Nicole Davis [email protected] Printing Warwick Printing Company Ltd

Voluntary overtime and holiday pay calculations Danny Done discusses

Comparators, addiction, trust Nicola Mullineux outlines

41

40

Are pension dashboards ready? Henry Tapper decries

The tapered annual allowance Ian Neale argues

47

48

Communicating pay to remote workers Glyn King discusses

Powering payroll with transformational technology Steven Watmore explains

Useful contacts

Regulars

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 [email protected] 0121 712 1000

01 Editor’s comment, Chair’s andCEO’s messag e

32 Reward insight 40 Pensions insight 42 Industry news 43 Feature article Going global

Events, news and developments

04 Membership insight On your behalf, Advisory 08 Events horizon 09 Career development insight PAS case study, Diary of a student, CPD 12 Movers and shakers 14 CIPP update 15 National Payroll Week

47 Technology insight 50 Aweek in the life of Michelle Shepherd 56 Confessions of a payroll manager

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 2019. 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.

Additional online content 30 Processing future payments in USA when an employee dies 31 Are employers choosing wisely when selecting workplace perks to attract top talent?

24 Payroll insight 29 Payroll news

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| Professional in Payroll, Pensions and Reward |

Issue 54 | October 2019

MEMBERSHIP INSIGHT

On your behalf

Policy team update

SamanthaMannMAATMCIPPdip, CIPP senior policy and research officer, reports on several think tank events and encourages your participation

T he September issue’s On your behalf report discussed the plethora of consultation documents published by government before the summer recess. The policy team has continued to canvas and gather members’ views on the proposals and changes to processes that these consultations might bring. Stakeholder involvement is important. Policy authors for government know their policy – we know payroll – and it is vital that everyone who has a view can express it. Your expert knowledge is invaluable in bringing about change to government proposals – after all, there are so many – and many (if not all) of them will impact payroll calculations, processes and workload in the coming years. After our most recent think tank roundtable which was held on Tuesday 20 August, the team received the following comment from one of the officials who had attended: “I know I found it really helpful to hear first- hand the thoughts and concerns of the delegates. It really helped me understand these and has greatly increased my appreciation of how changes may affect payroll providers and employers. It was clear to see the benefits an event like this can bring to the consultation process.” The Think Tank, which was held in Leeds and attended by representatives from the Department for Business, Energy and Industrial Strategy, Department for Work and Pensions, and HM Revenue & Customs, discussed three of the summer consultations, as follows. The discussions throughout the day were lively and interesting and the opinions expressed will be included in the consultation responses which will be submitted in October.

Health is everyone’s business: proposals to reduce ill health- related job loss This consultation sought views on different ways in which government and employers can take action to reduce ill-health-related job loss. Disabled people and people with long-term health conditions are at greater risk of falling out of work. The proposals aim to support and encourage early action by employers for their employees with long-term health conditions, and improve access to quality, cost-effective occupational health. Statutory sick pay (SSP) reforms are part of this consultation. A cornerstone of this consultation is considering how employers can do more to support workers with ill-health, rather than simply paying them. Enabling a gradual return to work after illness would be one way to support workers, but the existing SSP rules don’t allow for this. During the discussion it was clear that whilst all could see the benefits of a phased return to work, the administrative burden would perhaps be greater for those who pay occupational sick pay (OSP) than for those who only pay SSP due to the differing durations between OSP and SSP. ...the benefits would outweigh the burden It was also highlighted that complications could arise for workers who have multiple posts within the same organisation, especially if they were fit to work in one job but not the other. Despite all the complexity there was an acknowledgement that the benefits would outweigh the burden. The discussion turned to the possibility

of widening eligibility to SSP to those earning below the National Insurance lower earnings level (LEL). Acknowledging that there would be little incentive for workers earning just below the LEL to return to work as their earnings would be on a par with the SSP, the suggestion was that perhaps a percentage of SSP would be paid. This seemed to strike the right balance between supporting those on sickness absence, whilst also encouraging them to return to work when they were fit to do so. All in the room agreed that it is right to remove the LEL link but as with any change to payroll processes, there was unanimous agreement that payroll software was the key to managing the administrative burdens. Developers must be involved at the earliest stage i.e. when scenarios are being considered and are evolving so as to ensure that all relevant permutations are factored into payroll software. Transparency of flexibleworking and family related leave and pay policies The discussion then turned to the consultation looking at the way in which employers can support families. The consultation has three main strands: ● ● whether job adverts should say whether jobs can be done flexibly ● ● whether employers should publish their family related policies online so new applicants know what that company is like to work for, and ● ● whether this approach would make a difference. After an interesting discussion considering all angles, the attendees concluded that whilst well-meaning, it was unlikely that these suggestions would bring any real benefits to either employers or potential employees.

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| Professional in Payroll, Pensions and Reward | October 2019 | Issue 54

Policy hub

Neonatal leave and pay Parents of premature, sick and multiple babies can experience significant challenges, particularly in cases where their baby or babies need neonatal care for a number of weeks or months. Evidence suggests that current leave and pay entitlements do not adequately support parents in these circumstances. In response, the government is seeking views on a proposed new entitlement to neonatal leave and pay (NLP) for parents of babies who require neonatal care following birth; this would give parents one week of NLP for every week that their baby is in neonatal care, up to a maximum number of weeks. This would apply to parents of babies who had spent a minimum of two continuous weeks in neonatal care immediately after birth. The intention is that NLP would be taken after other types of leave such as maternity or paternity leave. ...the benefits to parents far outweighed any burden... All agreed with the suggestion that eligibility criteria for NPL should mirror those for maternity pay and leave, but that guidance should be made much clearer regarding premature births, which would be much more common when NPL requests were received, and notice periods may on occasions be shorter than usual. There was general agreement with the suggestion that NPL should be capped at twelve weeks; however, the interaction with other parental leave, particularly shared parental leave and pay, could be complicated if not well-thought through, particularly as they relate to notice periods that affect each period of leave. Despite a lengthy discussion, there was no resolution to the question of what evidence would be required, particularly for partners, as this leave would be claimed after the two-week paternity leave period had ended. Given that the length of the baby’s stay in neonatal care would be unknown, this leave is likely to be claimed as the absence continues, but it would

bring additional burden to the NHS if they were asked to provide evidence throughout the duration of the baby’s stay. There was the suggestion that perhaps the parents complete a self- declaration, but this was not met with unanimous agreement. It was acknowledged that administration of NPL could be complex; however, there was unanimous agreement that the benefits to parents far outweighed any burden this would bring for employers. n Get involved The policy and research team canvas your views in several ways: ● ● direct 1-2-1 communications i.e. face to face at forums and annual conferences as well as through email and telephone calls ● ● surveys, which provide valuable quantitative and statistical >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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