The CIPP’s Policy team provides an update on a range of items including generic notices, SCONs, Scottish rate of income tax and payroll giving research
HMRC’s generic notices
One hot topic of conversation over the past few weeks has been the generic notices issued by HM Revenue & Customs (HMRC). Some CIPP members have been telling us that they have been receiving generic notices which appear to be incorrect. The Policy team have been collating these cases and passing the details on to HMRC for investigation. We can now bring news of one
particular scenario which is where a generic notice has been issued saying that an FPS has not been received, but in these cases an employer payment summary (EPS) has been sent before the nineteenth of the month, therefore no full payment submission (FPS) is required. HMRC told us that the generic notices had been selected for issue based on
amended to avoid this type of confusion.
Employer guidance for DEAs A CIPP member contacted the Policy team about the Department for Work and Pensions’ (DWP) guidance for calculating net earnings when processing a direct earnings attachment (DEA). The guidance says to deduct “all pension contribution amounts” from their earnings. However, when processing deduction from earnings orders (DEOs) personal pension contributions are deducted from net pay after tax has been calculated. So we asked the question as to whether this would be the same for DEAs as well.
...FROM APRIL 2014, IT WILL BE POSSIBLE TO SUBMIT EPSS DURING THE CURRENT MONTH...
details held on the sixth of the month. This allows for those who have genuinely forgotten to submit an EPS to do so before the nineteenth thereby avoiding a penalty. Following the feedback members have provided, HMRC now recognises the confusion this creates for those who have already submitted an EPS, especially for agents who have to explain these notices to their clients. HMRC now intends reducing the amount of time between the selection of data and the issue of the notices. And from April 2014, it will be possible to submit EPSs during the current month, which should go a long way to alleviating this problem. We have also suggested to HMRC that the wording of the generic notices be
6 PayrollProfessional
The DWP confirmed that the calculation for a DEA should take off all pension contributions, including personal pension contributions. However, they did say that they can understand why this would cause confusion and have agreed to amend their guidance so that it specifically makes reference to personal pension contributions to avoid any further confusion.
ECON and SCON reminder In the last ‘On Your Behalf’ (see December/January issue of PayrollProfessional) we talked about the fact that employers who operate contracted-out schemes will, from April 2014, have to report both the employer contracting-out number (ECON) and the
scheme contracted-out number (SCON) on FPSs sent to HMRC. With the introduction of the single-tier pension, the state additional pension scheme for people reaching state pension age after 5 April 2016 will end. There will no longer be an additional state pension from which to contract-out of. This means category D national insurance contributions and its equivalents E, L, O and N will cease to exist from 5 April 2016. It will be necessary for HMRC to close down all open periods of contracting-out on the individual national insurance records of all affected employees – some 6.5 million. The SCON is needed to ensure that the pension rights of these employees are accurate for the transition to the single-tier pension system.
Despite both the payroll software
industry and the payroll profession advising HMRC that these numbers are normally held by the pension scheme, employers are still going to have to provide this information. So, in true payroll style, we will do as we usually do and just get on with it.
If this change affects you then in advance of April 2014 we would encourage you to ensure that you have sourced the relevant details. We do appreciate that not all software will have the functionality yet as it is not currently a mandatory field on the FPS but, to save you a potentially big task, prepare early and have the information ready to input into your payroll system. If you are having any difficulties obtaining your SCON please let Policy know via
policy@cipp.org.uk.
On your behalf
membershipfocus
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