membershipfocus advisory
website:
www.thepensionsregulator.gov. uk/home. CIPP also delivers courses which cover this topic. You can find details of the course, dates available, location, and enrol at
www.cipp.org.uk/en/training-courses/ index.cfm.
Q: I would like some advice on the correct process needed when a form P45 has been issued to the employee and the termination has been reported to HMRC but the employee is still actively employed with us. A: HMRC originally stated that if you have already issued the employee with a P45 you will have to re-hire the employee under a new payroll ID.
Industry stakeholders challenged this
with HMRC stating how this process was causing issues for many employers. HMRC have now confirmed that if an employer can retrieve the P45 from the employee after it has been issued, HMRC would accept that the position is ‘as it was before’ (as if they had not left), so employers will not have to re-hire the employee. The employer can carry on as before and report payments using the same payroll ID.
Q: Can you advise me what current mileage rate to pay employees for business mileage if they drive an all- electric company car? A: Where electricity is provided by an employer to an employee to power a non- taxable car depending on the situation there is potentially a reportable benefit-in-kind. HMRC has been working with the Office for Low Emissions Vehicles in the Department for Transport to look at how to set a value per mile for the cost of electricity provided, and the methodology for ensuring that these values are reviewed and updated as necessary. An agreed value could possibly be used to provide the equivalent of the advisory fuel rate for company cars where individuals power up their company car at home, but use this for business mileage. Work is ongoing on this issue. Meanwhile HMRC’s Employment Income Manual contains current guidance on the different situations where a taxable benefit may arise: see ‘Car benefit: special cases – issues relating to electric cars’ at
www.hmrc.gov.uk/manuals/eimanual/ EIM23900.htm.
Q: May I ask for some guidance on an internship programme in our organisation, specifically on their entitlement to minimum wage? A: It is the employer’s responsibility to decide whether the person is a worker for national minimum wage (NMW) purposes. The title ‘intern’ has no legal status under NMW law.
Entitlement to the NMW does not depend on what someone is called – what matters is whether the agreement or arrangement they have with you makes them a worker or a volunteer. Some forms of work experience, placements and internships, may be referred to as ‘unpaid work’ or ‘expenses only’. This is where someone gives their services free of charge in order to develop or maintain their skills.
Companies should check if the term ‘volunteer’ applies. If the ‘intern’ is not a genuine volunteer then the company must pay at least NMW. The
Gov.uk website will give more in-depth detail of exemptions e.g. young people undertaking work experience for you who are of compulsory school age. In general, a volunteer is someone who has an arrangement with you or your organisation, which does not entitle them to a financial reward. Does this person not have to turn up for work if they do not want to? Can they be dismissed, sued for breach of contract? These are the types of questions you need to consider. Areas to consider if a person is a worker: they will have to have a contract or other arrangement with the organisation which entitles them to a reward, which is usually a monetary payment; and they have to turn up for work even if they do not wish to.
Gov.uk (
www.gov.uk/national-minimum- wage-work-experience-and-internships) provides more details on how to ascertain if they are a worker or not, which will then ultimately decide if you need to pay them the NMW. Someone’s entitlement to the NMW depends on the contractual relationship with their employer, not their job title.
It is important to remember that failure to pay the NMW to someone who is entitled to it is against the law. Currently employers that break NMW law must pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all workers found to be underpaid. The maximum penalty an employer can face is £5,000.
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