payroll assurance scheme update
client towards a high level of compliance. Do we need this distinction? Yes, because each client of a kitemarked bureau could reasonably seek its own PAS assessment independent of the bureau’s assessment. And because it simply would not be right to withhold the kitemark from a bureau if client employers do not follow the bureau’s advice or instructions. To adapt the familiar proverb, the bureau can lead a client to water but it cannot force the client to drink!
Does the distinction work in practice?
Yes it does, very effectively. Assessors have found very good evidence from bureaux in the form of letters or prompts or reminders to clients – or the lack of them!
Expanding the scope of the assessment
I mentioned in my last PayrollProfessional article on PAS that we were looking to expand the scope of the assessment to cover three additional areas, and this work has now been completed. First, share-related benefits for employees. This is really an expansion of the existing review of benefits in kind. In both of these areas we have to recognise that the payroll team is often not the lead player, but that they can often play a part with other departments in ensuring that the relevant payments and forms (e.g. P11D, 42 and the like) are complete and correct. And of course the payroll team has to be directly involved where benefits are provided in ‘near cash’ form or are accounted for through the payroll. As in all aspects of the PAS assessment we do not review specific transactions or returns, but we do look at the processes and relationships and communication routines which are deployed when a possibly relevant transaction takes place or a return has to be prepared. As I have explained in previous articles on PAS, these aspects are perhaps those which most interest HM Revenue & Customs (HMRC), and it is therefore very important for the future health of PAS that we can comment on the processes for accounting for all benefits in kind, whether share-related or not. The second new area is the international one. How well does the organisation prepare for the arrival of an employee seconded from abroad, or the departure of an existing UK employee to work for the same employer in a foreign country, for example? Or perhaps it would
...PAS IS ‘OPEN FOR BUSINESS’ AND READY TO LOOK AT ANY EMPLOYER OR BUREAU OR PAYROLL AGENT...
be more realistic to ask how well the organisation responds when such an event has already happened or is about to take place? That is not a criticism, but merely recognition of the fact that cross-border business opportunities often crop up in a hurry and require employees to be moved across borders before the fiscal or social security implications can be fully explored. Again, the PAS role is to examine processes rather than specific judgments. We will not second-guess the residence or social security status of an individual, or whether they qualify as a short-term business visitor, for example. But we will examine whether the organisation has recognised the sort of complexities involved in these situations, and has accessed suitably qualified advice. Finally, we wanted to expand the assessment to cover the construction industry scheme (CIS). About one in ten employers in the UK operates payments to subcontractors through the payroll as well as employees’ wages and salaries – and many of these also suffer CIS tax deductions as contractors which need to be factored into their calculations of tax due to HMRC. It therefore makes sense that an assessor reviewing one of these employers can now look at how CIS processes are working alongside the check of PAYE processes.
Is PAS just about compliance? Inevitably the PAS process focusses more on HMRC obligations than others, because of the sheer complexity of our tax and national insurance legislation. However, it would be foolish to assume that the assessor will be looking at these areas of payroll and employer compliance alone. Our assessments to date have always looked at other relevant obligations, not least because these can sometimes pose greater penalty risks for the unwary or unprepared employer. Automatic enrolment is perhaps the highest profile
example at the moment. However, the media have also carried recent stories of pretty hefty fines for employers who have not complied with Borders Agency criteria for checking a new employee’s right to work in the UK, or with the Department for Business, Innovation and Skills’ rules for paying the national minimum wage, or with the Information Commissioner’s principles for protecting personal data about employees, for example. And in recent PAS assessments we have found cases where organisations were at risk in each of these areas, and have been able to advise on how to remove or mitigate the danger. Maybe some of the readers of this
article would benefit from similar advice. Sign up for your PAS assessment, and we can review how your organisation matches up against the rules.
Where next?
Over the next few months we shall of course continue to refine or add to the PAS process, as new legislation or guidance emerges from HMRC and other departments. We are also keen to incorporate ideas emanating from the feedback or suggestions for improvement which we receive, particularly from those who have been through a PAS assessment visit – whether those conducting the assessment or the organisation being assessed. We are also planning our first forum for assessors in July. This will coincide with the annual tutors’ day, because quite a few of our assessors are CIPP tutors, but will give an excellent opportunity for all the assessors to share their experiences and their questions, helping us with our plans for continuous improvement of the PAS process.
It seems fitting to end this review with a reminder that PAS is ‘open for business’ and ready to look at any employer or bureau or payroll agent and see whether they are ready to join the growing ranks of organisations with the prestigious PAS kitemark.
PP
Why doesn’t your organisation apply now? It doesn’t matter where you are based in the UK or what size you are. We’re ready to assess your processes just as soon as you complete the engagement form. Go on – apply today!
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