participates in it. From January 2014 it became funded by salary sacrifice. This month non-members who
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m. to 4.30p.m. on Fridays. It is free to all CIPP members, students and attendees of approved CIPP courses and conferences in the last six months. Call 0121 712 1099, email
advisory.service@
cipp.org.uk or visit
www.cipp.org.uk for frequently asked questions.
Q: Are schools excluded from claiming the Employment Allowance? A: Generally, publicly funded schools – particularly those which are funded and controlled by local education authorities – will not be eligible for the Employment Allowance. However, if a publicly funded school has charitable status as, for example, academies, it will be entitled to the Employment Allowance.
Independent schools will be entitled to receive the allowance on the basis that they are trading businesses; quite frequently these are also charities. Further guidance about the Employment Allowance can be found at
www.hmrc.
gov.uk/nicsemploymentallowance, and within the Employer Bulletin issue 46
www.hmrc.gov.uk/payerti/forms-updates/ employer-bulletin/bulletin46.pdf. (See also ‘Employment Allowance’ on page 40.)
Q: We have a client who has been unable, due to cash flow reasons, to pay their employees for a period of six months; they would normally pay on a monthly basis. How should we calculate net pay? A: Firstly, and I am sure that you will have highlighted this to your client, there is an issue with regard to not paying the employees for work done in accordance with their contractual terms – or particulars of employment. However, let’s set that issue aside for a moment assuming that the employees have been accepting of this situation. You as the provider will have been
8 PayrollProfessional
submitting an employer payment summary each tax month to confirm that no employees have been paid, also noting that the employee is an irregular worker so as to avoid them being removed as a leaver. l PAYE income tax – as the normal pay period is monthly and you are now paying for a period of six months, if the employee has a cumulative tax code you will apply the monthly PAYE income tax threshold multiplied by six to calculate the amount of personal allowance that can be offset against taxable pay. Remember to take account of any previous year to date calculations when calculating the tax due to date. l National insurance contributions – if your software normally uses tables divide the earnings payable by six and look up this figure on each month’s tables. Multiply by six the answer you find from within the tables.
Of course, it should also go without saying that the answer above is based on HMRC guidance and you will need to discuss how your particular software will be able to process this irregular pay period calculation. You may need to manually calculate and enter the figures in the event that you cannot enter a multiple and irregular pay period.
Q: The company is postponing the staging date of 1 January 2014 until 1 April 2014. The current scheme is a qualifying scheme for automatic enrolment and 90% of the workforce
are eligible jobholders will be sent postponement letters and informed that the pension scheme is salary sacrifice. If they do not wish to enter into salary sacrifice do we need to offer an alternative scheme funded differently? A: Salary sacrifice is a different arrangement from automatic enrolment (AE) into a pension scheme; therefore the employee should be automatically enrolled into an AE or qualifying scheme whether it is funded through salary sacrifice or not. If the employee declines to set up a salary sacrifice arrangement then the employer still has a duty to fulfil their AE responsibilities with an alternative method of contribution into the scheme. Additionally, it could be possible that some employees would not be able to salary sacrifice due to the level of pay going below the national minimum wage. Alternatively, the employer could use postponement to give the employee time to set up a salary sacrifice arrangement. If the employee does not set this up in time, again the employer would need to ensure that an alternative method of funding is in place.
Guidance can be found at paragraph
111 of chapter 4 of the Detailed Guidance:
www.thepensionsregulator.gov.uk/doc- library/automatic-enrolment-detailed-
guidance.aspx#s11500.
Q: Do you know of any websites which give guidance on staging dates? A: The Pension Regulator’s site has useful information in regard to AE into pension schemes and in particular it has a calculator for working out the company’s staging date:
www.thepensionsregulator.
gov.uk/employers/tools/staging-date.aspx. If you are a payroll provider and you have not already assessed your client staging profile, we would strongly recommend that you do so now. If you are an employer with multiple
PAYE schemes, use the calculator to enter each PAYE scheme reference and establish the earliest staging date. Notify the Pension Regulator of which PAYE references this affects so that they will know to suppress letters to the smaller and later schemes. Further guidance and webinars can be accessed at the Pension Regulator’s
membershipfocus ADVISORY
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