Frequently Asked Questions – Specific to UK Tax and Employment Legislation (UK)

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UK Tax and Employment Legislation

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New Frequently Asked Questions

I have found the HMRC tax and NICs calculator for 14/15 but can anyone tell me where to find 13/14?
If the FPS is reporting hours that have been worked in a previous month, what ‘Hours Worked’ Field do you tick on the FPS – is it the hours relating to the period that is being paid for? 
We are paying 2 weeks paternity pay over Easter.  Do we count the 2 Bank Holidays paternity days or holiday days?
We have an employee who is receiving SMP and is in the salary sacrifice scheme.  Can I still reduce the SMP by the salary sacrifice or does the company have to pay this?
We have always split the NICs calculation over 2 months when we having something like a new joiner part-month.  I have been told by HMRC that since RTI there is no longer a need to do this.  Is this correct?
An employee has received professional advice as part of a settlement agreement.  As part of this, they have been told that we can pay the first £10,000 free of tax – effectively using up all of her personal allowances in one lump sum.  Is this correct?

Does it matter what we call the lump sum payment on the payslip that we make to an employee  who has left under a settlement agreement? 

Deductions From Wages

My tax deduction has increased this month – can employers just take an increased amount when I have not received any more salary and my tax code has not changed? 

We will be paying redundancy pay to an ex pat who does not fulfil the revenue rules for tax exemption, he has however worked abroad for 50% of his employment 6 out of 12 years. My question is based on the guidelines the payment above the £30K threshold can be reduced by the overseas service but is this a calculation that we should perform or do we tax the payment and the employee claims the reduction from the revenue the effective date on the tax code notification mean?  Is this the date from which I have to perform the tax calculation on the new code?
An employee has indicated on their Starter Declaration that they have a Student Loan to repay.  However, a P45 that they have given us as well does not have the box ticked.  Is it correct we start the Student Loan deductions? 

I have been informed by my company that they will be withholding half my salary in February 2014, as they are changing the way that we are paid to a month in arrears.  Does this count as an illegal deduction from pay?

Payroll Procedures

An employee has received professional advice as part of a settlement agreement.  As part of this, they have been told that we can pay the first £10,000 free of tax – effectively using up all of her personal allowances in one lump sum.  Is this correct? 

Does it matter what we call the lump sum payment on the payslip that we make to an employee  who has left under a settlement agreement? 

In a termination of employment case and a lump sum payment, can we give the annual tax free allowances in advance? 

I thought the beneficial loan threshold was increasing from £5,000 to £10,000 from 06 April 2014.  The 480 for 2014 still refers to £5,000.  Can anyone point me in the right direction that will confirm the threshold is increasing? 

Can anyone advise me about short-term business visitors and any arrangements with HMRC we should have in place?

We have received a letter from HMRC saying that we have to settle an underpayment of an employee’s tax because we failed to operate a tax code that they sent us.  Is this correct or should it be the employee’s liability?

 

Employment Status – Employed or Self-employed?

Am I committing an illegal act by working for two employers at the same time?

Can anyone tell me what steps someone needs to go through to set themselves up as self-employed?
Who are “employees” for payroll purposes?
I am self-employed. Am I entitled to holiday pay or any other benefits from my client?

Expenses and Benefits

We are moving to offices where there is no car parking for our staff.  We want to reimburse staff that use a nearby public car park.  Are there tax implications? 

We recently had an employee where her back seized up at work.  We contacted an osteopath who came to the office and massaged her so she could get home.  She is now under treatment under our private medical insurance.  However, is the call out charge for the osteopath a benefit for the P11D?

We have been issued a dispensation for £25 per day to cover meals whilst on business.  What records should I be keeping in case of an audit? 

Some of our staff will be buying their work mobile ‘phones at a reduced rate.  Is this a benefit-in-kind and how is payroll processing impacted? 
Does anyone have experience of paying encouragement awards to employees – i.e. in a suggestion scheme?  I think that £25 can be paid? 

Holiday Pay

We pay our casuals an hourly rate plus an additional amount for their holiday.  Our employment lawyer has said that this constitutes roll-up holiday pay and cannot continue.  Is this correct? 

Regarding a WTR calculation, a recent Tribunal case (Neal vs Freightliner Ltd) ruled that holiday pay must now also include non-contractual overtime uplift – interested in how other companies tackle this

Regarding a WTR calculation, a recent Tribunal case (Neal vs Freightliner Ltd) ruled that holiday pay must now also include non-contractual overtime uplift – interested in how other companies tackle this.

The company I work for had a power failure and want employees to take annual leave as they had to be sent home.  Can they do this?

Statutory Payments; Maternity Pay, Paternity Pay and Statutory Sick Pay

We are paying 2 weeks paternity pay over Easter.  Do we count the 2 Bank Holidays paternity days or holiday days? 

We have an employee who is receiving SMP and is in the salary sacrifice scheme.  Can I still reduce the SMP by the salary sacrifice or does the company have to pay this? 

We have a leaver employee who still has several weeks of SMP left.  As she has left, do we have to pay her? 

We have an employee going on Paternity leave from 24 March 2014, which spans the tax years.  Should I process this at the 2013/14 rate? 

A client is making all staff redundant.  There is one employee who is in receipt of SMP.  Is it best to pay SMP as a lump sum or leave her on the payroll?  Plus, when will the P45 be issued?  

Our payroll system is calculating pro-rata OSPP based on 7 days when our employee only works 5 days per week.  Is this correct?

National Insurance Numbers

We have received a batch of NOT forms, advising us that we have some incorrect NI numbers for employees.  I am a little confused as for most of the numbers, we have been given a new number to use, but the new number has no suffix letter, and our software will not currently allow us to input an NI number without a suffix letter – e.g. original number AB123456A – provided number AB678912.  Does anyone know if a FPS will allow a NI number without a suffix letter?
Can somebody clarify the rules regarding the NT code?  Is this carried forward to the following tax year or is it changed to the Emergency Code?

Tax Codes

I have found the HMRC tax and NICs calculator for 14/15 but can anyone tell me where to find 13/14? 

We have employees that started on 31 March and we are considering paying them manually for one day so that a P60 is produced.  What tax code do I use? 

What does the effective date on the tax code notification mean?  Is this the date from which I have to perform the tax calculation on the new code?  

Have the tax and NI tables for 2014/15 been issued yet, if only in a draft format? 

One of our employees has been told that he has underpaid tax because his salary exceeded £100,000.  HMRC have told him that we, the employer, should have told them about it so that his tax code could have been adjusted.  Is this right? 

Am I correct in that if the tax due of over 50% on the taxable pay and the tax code is a K code then the tax paid will be 50%?

Handling HMRC and Payroll Forms

HMRC have withdrawn the E14, E15, E16 and E19 from the start of the tax year 2014/15.  Learn have recreated the tables from these for the new tax year so that they are available – as we do not know if Gov.UK will be replicating this information 
I am trying to find out where the E15 is for 2014/15 – does anyone know? 

I am trying to find out where the E15 is for 2014/15 – does anyone know? 

Are the P9s for 2014/15 coming out yet?

What is everyone’s experience of HMRC’s new voice-activated Intelligent Telephone Automation (ITA)? 

Is there any specific deadline for renegotiating a Dispensation with HMRC?

We tax a notional value on company cars through the payroll.  When reporting this to HMRC, does this value have to be reported in the FPS Field ‘Pay After Statutory Deductions’?

Months 2 and 3 figures at HMRC do not balance to what I know to be correct and they were unable to explain the difference.

RTI

We have always split the NICs calculation over 2 months when we having something like a new joiner part-month.  I have been told by HMRC that since RTI there is no longer a need to do this.  Is this correct? 

If the FPS is reporting hours that have been worked in a previous month, what ‘Hours Worked’ Field do you tick on the FPS – is it the hours relating to the period that is being paid for?  
Was there a problem at HMRC in March which has caused one of my FPS files to go missing, apparently? 

Is the passport number mandatory on the FPS? 

I have two payrolls, a weekly and a monthly.  Do I tick the ‘final submission’ indicator on the last FPS for March or the EPS for Month 12? 

Can someone explain to me what a Week 1 code is?  

Can someone run through the procedure for making a FPS correction after we have submitted the March 2013 one?

We will have corrections to make to our final FPS that will be submitted at the end of March 2014.  If they are made before 20 April 2014, is the software specification for 2013/14 used or 2014/15?  

I have been told an incorrect employee number and have reported under RTI against his employee number.  Now I am told that it has to be changed in my system.  What impacts will this have on the FPS and will it cause confusion at HMRC?  

What is the date to report as the Payment Date under RTI if we bring forward our payday in December? 

 

Pensions

We operate a 4/4/5 payroll for our hourly paid staff.  Will this fir in with the PRP for Auto-Enrolment or so we have to change them to monthly paid?

We have an employee who has been a Non-Eligible Jobholder right up until this payday when we are making him redundant.  Now he has become an Eligible Jobholder.  Do we have to Auto-Enrol him? 

We have a senior member of staff who is leaving with 6 months’ PILON.  Can we pay him the company pension contributions as a lump sum to him and take tax and NICs? 

We want to pay a lump sum payment and pay it with a payment in lieu of notice to cover pension contributions that would have been made if the employee was still employed.  Is this OK? 

Can I use Postponement more than once if I assessed the person again and they were a Non-Eligible Jobholder? 

We Auto-Enrol employees and they 1% and the employer matches this.  Does this meet the minimum contributions criteria? 

 

Miscellaneous FAQ’s

My partner has been sick for 15 months and we believe that he is going to be offered medical retirement.  Can anyone explain what his rights are? 

If someone has been issued with a risk of redundancy letter and an offer of a job as a reasonable and suitable replacement has been accepted verbally, can the letter be withdrawn? 

If you log onto HMRC’s Website this morning (07 April 2014), it is still saying in the dropdown box that the current tax year is 2012/13!

Are employer payment booklets for 2014/15 issued on request only and why are we getting booklets that advise HMRC’s bank details for clients that are not paying electronically? 

I am aware of a number of employers who are experiencing problems with HMRC’s new intelligent Telephone Automation (ITA) service.  This service responds to speech rather than asking the caller to press a series of buttons to get through to the correct person.  Has anyone had any personal experience of problems?

We have been advised that posting a payslip with personal information on it might pose an identity fraud risk to our employees.  Is there a precedent for this and should we be taking some action in regards to this communication we have received?

 

Help with My Personal Questions

As you cannot answer my personal question, who can?

How can I find the name and details of my tax office?

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Payroll Update 2013