This month we are offering a real treat. On the morning of 18^th June we are taking over the Balcony Room of Shakespeare’s Globe Theatre to present an HR Forum on cutting issues in managing people. And it is all free!

Employment law is once more on the change, so we will be looking in detail at

• new and imminent developments in employment law and how they will affect your organisation so that you have time to assess their impact and plan for them.
• the effect of the Enterprise and Regulatory Reform Act on pre-termination negotiations and settlements, and how to protect your organisation
• how to protect yourself against the damaging effects to your business of whistleblowing
• changes to the law on employee benefits, especially those brought about by the Budget.

These topics will be presented clearly and understandably by top drawer experts including Jon Heuvel and Tim Randles of Penningtons Solicitors LLP, Guy Ellis of Courageous HR, Steve Herbert of the Jelf Group, and our own Carol Oxlade.

All free of charge! And the catch? There is none. We like to go more than the mile for our clients, and if you are not a client already, no worry. Just come along and see the standard of training that we at Learn HR provide.

Places at the Globe are  limited, so you will need to reserve your place by phoning 01798 861111 or registering here. Do it now before all places are snapped up!

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Hopefully you will never need this article because, in reality, physical violence rarely occurs in the workplace, but, if it does, you need to deal with it promptly and effectively. So read on, absorb and remember.

If there is an outbreak of violence of any kind in your workplace, then your first priority is the health and safety of your employees. This is of paramount importance, not only for humane reasons, but also because, should anyone become injured, you are likely to be found liable unless you can demonstrate that you acted properly, that is to say with the safety of everyone directing your actions. Faced with violence, your initial instinct may be to intervene, but this is unwise, both because you may get injured and as a result be unable to continue to manage the situation, and also because your first priority is to protect everyone else. You must therefore get everyone away from the area. This may not be easy since curiosity will cause many people to want to stay and watch, therefore you must be firm. Order them away with a loud voice and use any management staff who are around to shepherd them away. Ideally tell them exactly where to go and have someone with authority make sure that they go there. Then, as appropriate, make safe any machinery that that could present a hazard.

Only then can you address the person or people engaged in the violence. Tell them loudly and firmly to stop what they are doing. If you can, send them away in different directions, though not towards where your employees have been told to assemble. If they ignore you there is little you can safely do. You may be able to enlist a few strong people to intervene and use persuasion to stop the violence, but do not allow anyone to use violence themselves otherwise not only may they become injured, but they may be prosecuted for assault. Regretfully, fighting for a good cause is poor defence in law. If it proves impossible to stop the violence, then you should call the police and in the meantime back off.

When you have regained control of the workplace you can of course have your employees return to their work. Now you have to deal with the people who were misbehaving, and the best immediate action to take is to send him, her or them home, telling them to remain there until you call them back. This gives them time to cool down and to ponder their actions. You also need to cool down yourself before you can involve yourself in a disciplinary interview objectively, but also you need to investigate the incident. So interview anyone who witnessed the outbreak of violence and what led up to it, and make detailed notes. Consult your personnel advisor or your boss to determine who should manage the disciplinary interview. If it was your employees who were doing the fighting, then it makes sense for you to chair the meeting, but on the other hand might it be better for someone not involved in the incident to carry out that role and call you as a witness? The incident, your relationship to the people involved and your organisation’s resources should inform this decision.

If only one person was causing the violence, the disciplinary process should be reasonably straightforward. You present the evidence, give the employee opportunity to make a full response, take into account any mitigating circumstances and finally make your decision. Violence can never be justified as a response to anything that happens at work. Nevertheless if, say, an employee was seriously bullied about his colour or his sexual preferences, you might apply a lesser sanction than dismissal, but you certainly would need to take action against the bully and also take a serious look at your employment environment. Violence is gross misconduct – full stop. Ordinarily it should result in summary dismissal, but in exceptional circumstances you may instead impose a final warning with a long expiry date.

If two or more people were fighting, you have a more difficult problem because at least one will say that another started it and will present as a defence a tale of huge provocation. In case of physical provocation a human instinct is to fight back, but this is rarely acceptable practice at work. Investigate as thoroughly as you reasonably can, take witness statements and look at any available video records. You may find that one party was attacked and did little other than raise his or her arms in defence, but if that was not the case, then you need to discipline all parties. Unless you have really good reason for doing otherwise, you should apply the same sanction to them all. Dismissal would of course be an appropriate sanction. But if somehow you feel that would be too severe because one party was dragged unwillingly into the conflict, or because he or she has long and trouble-free service, or because threats rather than actual violence were used, then final warnings would be sufficient, though make sure to state firmly that any recurrence is likely to lead to summary dismissal.

If you were conducting a disciplinary hearing to deal with a complaint other than violence, but during the interview the employee threatened you, then you should terminate the meeting immediately and either order the employee out of the room or get yourself and everyone else out speedily. You then have two disciplinary issues to deal with – the original issue and now the threat. The threat should be dealt with first, and you may consider it prudent to send the employee home. In the meantime discuss the matter with your boss or your personnel staff and decide who is the best person to conduct the disciplinary hearing about the threat. You should attend only as a witness. However if there is nobody else who could handle the meeting effectively, chair it yourself, but delay for a couple of days to ensure that you have exhausted any anger and thus approach the meeting objectively. The employee would need to offer an extremely good defence to avoid being dismissed summarily for threatening a manager. Whoever chairs the meeting should minimise the risk of actual violence by having a few heavyweights in the room or just outside, and having the employee sitting farthest from the door. In the unlikely event that the employee survives this interview, he or she will then have to attend the previously adjourned meeting to deal with the original complaint. You should continue to chair this meeting but have someone with you who can check throughout that you are not acting too subjectively. Your final decision should be informed solely by the evidence produced during this particular interview and not be affected by the other hearing.

Yes, we hope that you will never need to use the advice contained in this article but, if you do, remember – safety first. Your employees and of course you yourself.

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Do you have stress? Yes? Good! Stress is a function of most animals, including humans, that keeps us safe. It causes us to jump back onto the pavement if we realise that a car is about to hit us, it makes us pull our hand away from a hot pipe, and it enables us to run faster than we thought possible if we are chased by a bull. It is our supreme safety mechanism. But do you suffer from stress? If so, that is bad. We suffer if the rush of adrenalin and other chemicals that pushes our system into hyper-drive does not quickly disperse, in which case we can fall seriously, even fatally, ill.

To guard against unnecessary stress, to keep our stress at a healthy low level, we need to carry out regular exercises – the longer and more frequently the better. Here are some that are easy to carry out, the differences being the time that each takes.

A  30 seconds exercise – The Stretch

You can do this anywhere – at work, at home, standing, sitting or lying down, even in the car if you are pulled over somewhere. Just stretch out your arms as far as you can and count to 10. Stretch your legs and count to 10. Push your stomach forward and your shoulders back and count to 5. And finally have a big yawn. That is sufficient to relieve a lot of tension, but repeat twice more if you have the time.

 A 5 minute exercise – The Focus

On your desk or on something in front of you place a small object such as a coin, a bottle top or a pencil. Blink a few times to clear your eyes, and then focus on the object. Think of nothing but the object and disregard anything else that crosses your mind. Look at the object’s shape, its colour, its texture, the way the light hits it. See nothing but the object. It is the most important, the most beautiful thing in the world. After five minutes blink a few times and get back to what you were doing. Ideally set a timer to five minutes so that you do not have to worry about time. And if someone comes along to interrupt you, just blink and deal with them.

A longer exercise – The Visualisation

Imagine your favourite sort of place such as a garden, a wood or a beach. We will take a garden as an example. Wherever you are, get yourself comfortable, squeeze all your muscles and then relax them. Close your eyes, or look at a blank wall so that there are no visual distractions, and ignore sounds and anything going on around you.

Imagine that you are entering a dark wood. You see a path disappearing into the wood, so follow it. You will find that, as it winds from this side to that, you are going downhill. Be sure that you are always walking downwards. Listen to the rustle of the trees and the sound of the birds as you continue down the slope. Soon you will notice that the wood is getting lighter and suddenly you emerge into a beautiful small garden, surrounded by a hedge.

There is nobody in the garden and nobody knows the way through the wood, so you cannot be disturbed unless you choose to be. Looking around the garden you see that all the spring flowers are in bloom – snowdrops, bluebells, daffodils and so on. Ahead of you is a small gap in the hedge, so you go through it and find yourself in another garden that is full of summer flowers. You see another gap, walk through and find a display of autumn colours. And finally, through another gap, you find a garden that is full of all your favourite flowers, from all seasons, all flowering together. You walk around this garden and gaze at the flowers, smell their perfume, admire their detail. The grass is soft under your feet – you can take your shoes off if you wish – and you can hear birds singing. You decide to lie down in this garden. As you do you hear the birds, hear the rustling of trees, smell the perfume of the flowers and see the clear blue sky. Now think of nothing but the pure pleasure of being in this place, and let each of your senses take everything in.

You may stay there as long as you like, indeed if it is bedtime you can just drift off to sleep. But otherwise have a quiet alarm that will tell you that your visit now has to end. When the alarm sounds, count slowly from ten to zero, then remember where you really are and open your eyes.

You can do this anywhere and at any time, though may have to make some arrangement to avoid being disturbed, such as a notice on the door. However, if someone does disturb you, just open your eyes and deal with them. When you have carried out this exercise two or three times you may choose to ignore the journey through the wood. Just close your eyes and go straight to your garden or beach or wherever. You should find this exercise thoroughly relaxing, but if it does cause you any distress, be sure to have a word with your GP or a counsellor.

Remember – death is nature’s way of telling us to slow down, so do these exercises regularly to enable you to face the rigours of life without unhealthy stress.

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Dealing with a tired employee

One of our employees seems always to be tired. He looks tired, he yawns a lot, he is slow and he makes mistakes. What can we do?

Reply

You need to determine why he is tired, so talk to him. Is his tiredness caused by late nights, partying or does he have an evening job? If so, warn him that he must change these activities so that he is fit to come to work for you the following day. If on the other hand his problem seems to be medical, insist that he consult his GP to determine the problem and a cure. If he refuses any of this, warn him that his job is in jeopardy, and apply your disciplinary procedure.

Employee’s sudden departure

An employee told us last Friday that he was leaving that day and starting a new job on the Monday. This was a shock to us as he gave no previous indication and did not give his month’s notice. What can we do?

Reply

Nothing really. Although he has broken his contract and acted badly there is nothing to be gained by taking him to court, so cut your losses and move on. Should you be asked to provide a reference for him in future you are entitled to refuse. However, if you do provide a reference you may mention the way he left you, but you must also include his strengths and weaknesses and so on and not make any malicious comment.

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Last month’s problem was:

A few years ago when my birthday fell on the third Saturday of October I noticed that the month contained five Fridays and five Sundays. What is the date of my birthday?

A calendar month could contain five Fridays and Sundays only if it consisted of 31 days. The 1^st would have to be a Friday and the 31^st a Sunday. As the first Saturday would be the 2^nd of the month, the third Saturday – my birthday – would be the 16^th. That’s the day to send in your presents to me at Learn HR.

Now an easy one this month:

What is the next letter in this sequence?

Y  Y  H  L  Y  E  Y  T  R  R  R

Answer next month.

Payroll news | Payroll questions | Employment Law advice from Payroll Help

HMRC have started sending 2012/13 Interim Penalty letters to non-RTI Pilot employers where they recognise that the Annual Return (P14s and P35) has not been submitted by 19 May 2013.  This advises that a late filing penalty in the sum of £100 may have already been incurred and, at the same time, advises that further penalties can be avoided if the return is sent by 19 June 2013.

Comment

The ‘Interim Penalty Letter’ will be the last notification that an employer gets about a late Annual Return before a Penalty Notice is issued in September 2013.  This September 2013 Notice will show the escalating penalty that has been built up as a result of late filing and will be calculated as £100 per 50 employees for each month or part month of delay.

Further Information

• HMRC  – Penalties if you File PAYE Returns Late

Payroll news | Payroll questions | Employment Law advice from Payroll Help

The Pensions regulator has issued guidance reminding employers of the importance of making the payment of pension contributions to the pension scheme in accordance with the overriding deadlines set out in the Pensions Act 2008.

For occupational DC and personal pension schemes, the general rule is that the due date for payment of contributions to the pension scheme is the date agreed between employer and the scheme trustees / managers.  The payment will be accompanied by a schedule of payments, as required by law, and in a format agreed with the employer.

However, the legislation provides a safeguard for employee pension deductions that have been made from pay.  In order for The Pensions Regulator to be able to issue unpaid notices where employers do not pay over pension contributions, the overriding due date, after which the employer is in default, is:

• when payment is made electronically, 22 days counting from the day following the end of the month in which the amount is deducted from earnings,
• in any other case, 19 days

For example, contributions deducted and due in October must be paid over by 19 November, or 22 November if paid electronically.

The due dates on the relevant schedule for the payment of contributions will usually be on or before the 19^th or 22^nd day after the month of deduction (as appropriate), to ensure that this additional safeguard in the law is always met.  The employer should not agree a due date for paying contributions deducted from pay later than this safeguard

Comment

Compliance is essential as The Pensions Regulator may apply a fixed penalty notice in the sum of £400.00 for late payment and an escalating penalty that accrues daily.  Fraudulent non-payment is an offence subject to fines or imprisonment.

Note, however, that different rules apply for the payment over of the first contributions that are deducted under Auto-Enrolment, i.e. when an Eligible Jobholder first becomes an active member of a Qualifying pension scheme having been Auto-Enrolled.  In these cases, contributions must be paid to the scheme by the end of the second month after the month in which the enrolment date fell and employers may prefer to withhold payments in this manner.

Alternatively, from an administration perspective, employers may prefer not to have two different rules to apply.  If they prefer not to have such an arrangement in place, payments must be made to the scheme in accordance with scheme rules or, at the very latest, the 19^th or 22^nd of the following month.

Further Information

• The Pensions Regulator – A Quick Guide to Paying Contributions

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Whilst talking about Class 1A, it is appropriate to talk about Class 1B as well.  Remember that Class 1B National Insurance Contributions (NICs) are due for payment by 19 October 2013.  If making the payment electronically, funds must be cleared in HMRC account no later than 22 October 2013.

The below link allows you to check that the 14 character charge reference you will use to identify your payment is correct.  This reference is NOT the same as the usual Accounts Office reference or the reference used for making Class 1A payments.  It is vital that the correct reference number is used, which will start ‘X’, as errors may result in the payment being delayed at HMRC which, in turn, may lead to the imposition of penalties and interest charges.

Further Information

• HMRC – PAYE Settlement Agreement Reference Checker

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Remember that Class 1A National Insurance Contributions (NICs) are due for payment by 19 July 2013.  If making the payment electronically, funds must be cleared in HMRC’s account no later than 22 July 2013.

See the below links on how to pay Class 1A NICs.  Also, when making the payment of Class 1A NICs, the reference number to use is a variation on the usual reference number used to pay the Accounts Office.  It is vital that the correct reference number is used, as errors may result in the payment being delayed at HMRC which, in turn, may lead to the imposition of penalties and interest charges.

The link to the below ‘Reference Checker’ will ask you to enter your usual Accounts Office reference and then advise the adapted number that should be used.

Further Information

• HMRC  – How to Pay Class 1A National Insurance
• HMRC  – Previous Year Reference Checker (remembering that the Class 1A payable in July 2013 actually relates to the tax year 2012/13)

Payroll news | Payroll questions | Employment Law advice from Payroll Help

For information, please see the below list of P9D and P11D forms for 2012/13:

• HMRC – P9D 2012/13
• HMRC – P9D 2012/13 (Welsh)
• HMRC – P11D 2012/13
• HMRC – P11D 2012/13 (Welsh)
• HMRC – P11D(b) 2012/13
• HMRC – P11D(b) 2012/13 (Welsh)
• HMRC – P11D Working Sheet 1 (Accommodation)
• HMRC – P11D Working Sheet 1 (Welsh)
• HMRC – P11D Working Sheet 2 (Cars)
• HMRC – P11D Working Sheet 2 (Welsh)
• HMRC – P11D Working Sheet 3 (Vans)
• HMRC – P11D Working Sheet 3 (Welsh)
• HMRC – P11D Working Sheet 4 (Loans)
• HMRC – P11D Working Sheet 4 (Welsh)
• HMRC – P11D Working Sheet 5 (Relocation)
• HMRC – P11D Working Sheet 5 (Welsh)
• HMRC – P11D Working Sheet 6 (Mileage
• HMRC – P11D Working Sheet 6 (Welsh)

Payroll news | Payroll questions | Employment Law advice from Payroll Help

The Learn Centre has been in contact with the Office of Tax Simplification (OTS) offering to give exposure to a research project they are undertaking which will report directly into HM Treasury.  They have drafted the following message. which we are conveying in this Newsletter:

‘The OTS is carrying out a review into the area of employee benefits and expenses and is seeking input from interested groups.  Particular areas of interest are where you have practical difficulties or things that you find time-consuming and difficult.  They are also keen to hear of possible solutions to the problems.  Please send any input to ots-employee.benefits@ots.gsi.gov.uk  by 5th July 2013.’

Comment

The Learn Centre is looking forward to meeting with the OTS to put forward our views on the complexities of the current expenses and benefits system and the impact that this has on employees, employers and HMRC.  However, this is a valuable opportunity for all groups and individuals to contribute their thoughts and views directly into the OTS to a project that will report straight to Government.

It is particularly relevant at this time to publicise this review, given that many of us are in the stages of preparing our P11D / P9Ds, looking at our Dispensations and PAYE Settlement Agreements and struggling to get details of those expenses that you know have been paid by another department – been there, done it and got the T-shirt!

So, use this opportunity to communicate with the OTS and ensure that the submission is with them by 05 July 2013.  Some pointers, possibly:

• Is the £8,500 threshold for P11Ds outdated or is it still relevant – why not do a P11D for everyone?
• Should we put all benefits through the payroll and do away with P11D reporting altogether?
• Can we report benefits and expenses in real time via RTI?
• Should we dispense with Class 1A and Class 1B NICs and make everything subject to Class 1?

Further Information

• Office of Tax Simplification

Payroll news | Payroll questions | Employment Law advice from Payroll Help

On 23 May 2013, we reported that, as a result of submissions we have been making via the National Insurance Verification Request (NVR) and/or the Full Payment Submission (FPS), HMRC were issuing some incorrect NINOs for employers to use.  These were being advised without the suffix letter A, B, C or D.

HMRC issued advice to employers on the actions that they should take when faced with an incorrect being provided by them – whether or not this was advice that was practical or could be accommodated is another issue.  At the same time, they advised that they had suspended issuing NINOs until their error was corrected.

On 07 June 2013, HMRC confirmed that the temporary suspension has been lifted, the ‘issue’ resolved and NINOs are being issued again.

Comment

This confirmation on HMRC’s Website is easy to miss in the below link in Further Information.  However, right at the very top is says:

Update 7 June 2013:

This issue has been resolved and we are sending out NINOs again.

This is expanded a little on HMRC’s ‘What’s New’ section where it says:

Last month we temporarily suspended the issue of NINOs while we investigated why some were being sent out without the final letter (A, B, C or D) of the NINO. This issue has been resolved and we are sending out NINOs again.

Let’s hope that this was a temporary blip and everything is working as it should now.

Further Information

• HMRC – PAYE for Employers: NINOs Without Suffixes

Payroll news | Payroll questions | Employment Law advice from Payroll Help

We are repeating this article from last week given the importance of a 13 June 2013 deadline that is looming.

In April 2013, HMRC advised that its own Basic PAYE Tools (BPT) software did not contain the capability to submit the Earlier Year Update (EYU).  The EYU is a submission that is used by employers to make corrections to FPS and EPS submissions from a previous year in which they were submitting in real time.  Importantly, the EYU can only be used for corrections discovered on or after 20 April, i.e. 20 April 2013 for corrections to be made to the 2012/13 data.  The EYU via the BPT may be needed by employers who were in the RTI Pilot but whose software did not contain the EYU functionality.

At the time that this deficiency was discovered, HMRC advised the following:

• Employers should contact HMRC as soon as they are aware they need to use BPT for any EYU that may be due (Employer Helpline on 08457 143 143 or 0300 200 3211).
• If employers contact HMRC before 19 May 2013, no penalty will be issued
• Employers will need to download the May 2013 version of the BPT, which will be available in the last few days of May.  This should be used to complete the 2012/13 tax year
• The EYU must be submitted with 14 days of the May 2013 BPT becoming available.  It is only in this circumstance AND contacting HMRC before 19 May 2013 that will negate any late filing penalty charge

Courtesy of their May 2013 Pilot Employer Supplementary Update, HMRC advised that the capability to submit the EYU via the BPT is now available via the upgrade issued on 30 May 2013.  The 14-day countdown began on this date and employers have until 13 June 2013 by which to submit their EYU via BPT and avoid a late filing penalty.  This is assuming that employers contacted the Employer Helpline by 19 May.

Comment

Remember – 13 June 2013 is now the extended deadline for submission of the EYU via BPT.

Further information

• Payroll Help 30 April 2013 – HMRC’s Basic PAYE Tools
• HMRC – May 2013 Pilot Employer Supplementary Update
• HMRC – April 2013 Pilot Employer Supplementary Update
• HMRC – Download Basic PAYE Tools 

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Employers will be looking forward to submission of their FPSs for Month 03.  Remember that the submission of the EPS for Month 02, where relevant, is due by 19 June 2013.

Of course, many people are still getting to grips with RTI and the new processes and procedures that this brings.  HMRC have published a number of useful pages on their Website and consolidated them in a guide – see ‘Further Information’ below.

Further Information

• HMRC  – RTI ‘Guidelist’

Payroll news | Payroll questions | Employment Law advice from Payroll Help

My partner likes to do it and does do it at every opportunity.  I am uncomfortable with it and don’t do it.  So, I am pleased that, from July 2013, there are now going to be measures to try and tackle it.  I am, of course, talking about the nuisance of middle lane drivers.

Of course, the threat of penalties is something that we live with every day in the payroll profession.  Having just passed year-end and now approaching P11D time, the possibility of penalties should be very much in our thoughts at the moment.

Therefore, care, compliance and attention to detail both on and off of the roads is essential and we make reference to some issues this week that we should all be taking into account.  It is sad that, once again, I always seem to be drawing worrying parallels between my personal and professional life – I need to get out more, obviously!

Payroll news | Payroll questions | Employment Law advice from Payroll Help

RTI is nearly into its second month for many employers and you would have hoped that it would be ‘business as usual’.  However, even into the second month, it is still evident that there are a lot of issues for both the payroll profession and HMRC.  Of course, any new regime is bound to have teething problems but some of them seem to be basic ones that should, surely, have been thought through earlier or addressed via clear communication.  We have recently reported on issues such as National Insurance Numbers being issued without a suffix letter and then tax codes being incorrectly issued as a result of new employment records being created at HMRC (this was also reported in the Sunday Times on 02 June 2013).  Whilst communication or guidance was issued, whether or not this was practical for the workplace is quite another matter.

HMRC are now getting around to ensuring that all their help booklets are fully updated in respect of RTI.  I am not quite sure why it has taken so long and am not convinced by their argument that it would have been too confusing for employers to update the content earlier (bearing in mind that not all employers have migrated to RTI and there are still two regimes in place for the remainder of this tax year).

I hope that any problems are sorted by the time that our RTI data is used for Universal Credit purposes later in the year / 2014.  Meantime, I am sure that the on-going issues are up for discussion and resolution via the RTI Customer User Group (CUG).  I feel confident that HMRC are extremely grateful for the continuing support that the CUG will continue to provide until all employers have migrated and all issues resolved, as this allows ‘HMRC to consult representatives of the range of customer groups impacted by RTI’.

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Employers will be looking forward to submission of their FPSs for Month 03.  Remember that the submission of the EPS for Month 02, where relevant, is due by 19 June 2013.

Of course, many people are still getting to grips with RTI and the new processes and procedures that this brings.  HMRC have published a number of useful pages on their Website and consolidated them in a guide – see ‘Further Information’ below.

Further Information

• HMRC Website – RTI ‘Guidelist’

Payroll news | Payroll questions | Employment Law advice from Payroll Help

In April 2013, HMRC advised that its own Basic PAYE Tools (BPT) software did not contain the capability to submit the Earlier Year Update (EYU).  The EYU is a submission that is used by employers to make corrections to FPS and EPS submissions from a previous year in which they were submitting in real time.  Importantly, the EYU can only be used for corrections discovered on or after 20 April, i.e. 20 April 2013 for corrections to be made to the 2012/13 data.  The EYU via the BPT may be needed by employers who were in the RTI Pilot but whose software did not contain the EYU functionality.

At the time that this deficiency was discovered, HMRC advised the following:

• Employers should contact HMRC as soon as they are aware they need to use BPT for any EYU that may be due (Employer Helpline on 08457 143 143 or 0300 200 3211).
• If employers contact HMRC before 19 May 2013, no penalty will be issued
• Employers will need to download the May 2013 version of the BPT, which will be available in the last few days of May.  This should be used to complete the 2012/13 tax year
• The EYU must be submitted with 14 days of the May 2013 BPT becoming available.  It is only in this circumstance AND contacting HMRC before 19 May 2013 that will negate any late filing penalty charge

Courtesy of their May 2013 Pilot Employer Supplementary Update, HMRC advised that the capability to submit the EYU via the BPT is now available via the upgrade issued on 30 May 2013.  The 14-day countdown began on this date and employers have until 13 June 2013 by which to submit their EYU via BPT and avoid a late filing penalty.  This is assuming that employers contacted the Employer Helpline by 19 May.

Comment

In case you were looking, HMRC’s apologies for the incredible inconvenience that this will cause many employers is contained in the April 2013 Supplementary Update.  There is no mention of the confusion and stress that this must also have caused; therefore, I assume that this is all covered by the term ‘inconvenience’.

Remember – 13 June 2013 is now the extended deadline for submission of the EYU via BPT.

Further information

• Payroll Help 30 April 2013 – HMRC’s Basic PAYE Tools
• HMRC – May 2013 Pilot Employer Supplementary Update
• HMRC – April 2013 Pilot Employer Supplementary Update
• HMRC – Download Basic PAYE Tools 

Payroll news | Payroll questions | Employment Law advice from Payroll Help

The same May 2013 Pilot Employer Supplementary Update contained a reminder that the P11D(b) and the payslips used for declaring Class 1A National Insurance Contributions on P11D benefits will be delayed.

These forms will be dispatched around 02 July 2013, meaning that employers using this form are liable to miss the 06 July filing deadline.  HMRC remind us that no late filing penalties will apply for 2012/13 as long as the P11D(b) is received by 19 July 2013.

Comment

Again, no apology or explanation has been given for this delay, as far as I can find.

Employers who were part of the Pilot will probably want to complete their P11D(b) before 19 July 2013, even though HMRC have said that there will be no late filing penalties.  Therefore, consider using the pdf version from HMRC’s Website and return this by the usual 06 July deadline.

Whilst on the subject of Class 1A NICs, remember that use of the correct reference number will avoid misallocated payments and the inconvenience of contact from HMRC.  This is the 13-character Accounts Office reference followed by the tax year and the month 13.  For 2012/13 Class 1A NIC payments, therefore, the suffix will be ‘1313’.

Further Information

• HMRC – May 2013 Pilot Employer Supplementary Update
• HMRC – April 2013 Pilot Employer Supplementary Update
• HMRC – 2012/13 P11D(b) and Payslip RTI Pilot Employers
• HMRC  – P11D(b) (pdf)
• HMRC – P11D(b) return of Class 1A NICs (information)
• HMRC  – How to Pay Class 1A National Insurance

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Many employers will make payments to casual employees who are employed to harvest perishable crops or to ‘beat’ for shooting purposes.  An arrangement with the National Farmers’ Union (NFU) and the Country Land and Business Association (CLA) allowed for the payment to be non-taxable and, if less than the Lower Earnings Limit (LEL) for NICs, the payments were returned on the P38(A) at the end of the tax year.

Following the abolition of the P38(A) upon the introduction of RTI, reporting arrangements have changed.  HMRC have just published their guidance on how to treat payments made to such casual employees taken on for harvesting and beating and who are not family members.

Harvest Casuals and Beaters employed for one day or less

If the employee is paid at the end of the period and does not have a contract for further employment, there is no liability for tax and the employer is required to gather the following personal information:

• Full name
• Date of birth
• Current gender
• National Insurance Number, and
• Address

There is no requirement for tax to be deducted on the amount that is paid to them (though HMRC point out that this does not mean that such a payment is non-taxable).  Consequently, tax code NT should be used.

If the above payments are made by an employer who has employees that are all paid below the LEL, with no requirement to have a PAYE scheme, the payment and personal information needs to be retained for the current year plus three tax years.  However, if the payment is made on a payroll where an employee has earnings above the LEL, the payment and personal information has to be reported at the time that the payment is made or, if this is not possible, within 7 days.  This will require the employer to complete the FPS with the following:

• Personal information (as above)
• Payment details
• Tax code NT
• Employment start and end date (for a one-day contract the start and end date will be the same)
• The ‘Payment Frequency’ on the FPS should either be set to ‘IO’ for one-off or ‘IR’ for irregularly

If the Payment Frequency is set as ‘IR’ the indication is that the Irregular Employment Payment Pattern indicator is set in the payroll system.

Comment

HMRC’s guidance says that if an employee on a one-day contract has had a Pay Frequency indicator of ‘IO’ set (indicating one-off), any further payments made to the employee should not show any previous payment in the taxable pay year-to-date field on the FPS.  Therefore, the payment this period (Field 58) and the taxable pay year-to-date (Field 41A) should be the same.  I am not sure that I follow this guidance and if this does apply at your workplace I would advise that your software provider is contacted.  Indeed, I believe it is advisable to discuss a course of action for these types of employees at the very start.

Harvest Casuals and Beaters employed for more than one day but less than two weeks

Where the employee has not worked for the employer previously in the same tax year and ‘was not paid above the PAYE threshold without PAYE being applied’ the guidance above should be followed.  Where they have been employed previously and paid over the PAYE threshold, they should be treated as a regular starting employee.

Comment

Again, I stress the importance of talking to your software provider in the first instance to ensure that your reporting obligations are met.  Interpreting the new guidance is not helped by the fact that HMRC’s own guidance on their Website still refers to the P46 procedure and the indicator ‘NI’, both redundant under RTI.

Harvest Casuals and Beaters employed for more two weeks

There are no special concessions that apply to these workers and the usual starter process should be followed.

Further Information

• HMRC  – Harvest Casuals and Casual Beaters

Payroll news | Payroll questions | Employment Law advice from Payroll Help

From 06 April 2013, an individual’s tax residence status in the UK is determined by the Statutory Residence Test (SRT).  The SRT applies for the purposes of establishing the residence Status, or the residence status of another person where relevant, for:

• Income tax
• Capital Gains Tax and,
• Where relevant
  • Corporation Tax and
  • Inheritance Tax

In May 2013, we advised that HMRC had issued guidance on the Test and announced that an online Tax Residence Indicator would be available as a pilot version in due course.  This will help determine residence status for Income and Capital Gains Tax purposes.

Last week, HMRC advised that they have made this online Indicator available.  This allows an employer or employee to enter relevant personal and employment information, including time spent in and out of the UK.  This will then produce an indicator of residence status that can then be printed or saved.

Comment

Note that the legislation regarding the Statutory Residence Test is part of the Finance Bill 2013 (from Schedule 43).  This does not become law until Royal Assent is given; expected in the summer of this year.  As a result, if there are changes to the planned legislation, HMRC advises that the online Indicator may provide inaccurate results, even if the information that has been entered is correct.  Further, HMRC stress that this is a pilot version which may contain inaccuracies.  An updated one will be available from later in the year.

Users of the Indicator are required to accept both of the above warnings before proceeding.

Further Information

• Payroll Help 14 May 2013 – Statutory Residence Test Guidance
• HMRC  – Statutory Residence Test (Guidance Note)
• HMRC – Tax Residence Indicator (Pilot version)

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Last year, we reported on the case of Leslie Seldon who was one of the partners at Clarkson Wright and Jakes in Kent.  Together with the other partners, he was required to sign a deed that required him to retire from the firm by the end of December in the year that he turned 65.  His employment duly ceased on 31 December 2006.

Mr Seldon brought a claim under the Age Regulations 2006, subsequently replaced by the Equality Act 2010 but covering the same discrimination issues that Seldon believed he had been subject to.

Initially, it was found that setting a default retirement age by way of the deed was legitimate in that:

1. The deed that had been signed by the partners ensured that associates in the firm were given the opportunity of progression, thereby ensuring their retention
2. This was necessary for succession planning
3. The arrangement limited the need to have to expel partners ‘thus contributing to a congenial and supportive culture’

However, the continuing claim by Mr Seldon has been whether these could have been met by setting a retirement age other than 65 – i.e. could the legitimate aims have been met by setting a higher or lower retirement age?

In 2012, the Supreme Court referred the case back to the Employment Tribunal in Ashford, Kent, for them to rule on this issue and whether the age of 65 could be justified.  In short, the Tribunal ruled at the end of May 2013 that, in this case, setting the age of 65 was a proportionate means of achieving the aims of the partnership deed.  Whilst another age could have been selected, the age of 65 was not inappropriate and not discriminatory.

Comment

The written reasons in Further Information should be read in full and should not be seen by employers as justification to introduce a mandatory retirement age.  This case was based upon the factors in 2006, before the abolition of the national retirement age and the start of the changes to the State Pension age.  Indeed, the Tribunal acknowledges this fact.

As we have said, Seldon indicates that 65 was justifiable in this particular case and there was a legitimate reason for setting it at this level rather than a higher or lower age.

Further Information

• Payroll Help May 2012 – Legitimate Retirements at 65?
• Employment Tribunal Written Reasons May 2013 – Seldon v Clarkson Wright and Jakes

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Many thanks to Brian on our Payroll Forum who pointed out that the Statutory Payment Calculator on the Gov.UK Website (https://www.gov.uk/maternity-paternity-calculator) still uses the 2012/13 rate of £135.45 rather than the correct rate of £136.78 that applied from 07 April 2013.

This has been reported.

Comment

This page can also be accessed via the HMRC Website; however, maintenance is the responsibility of Gov.UK.  It is disappointing that information from the ‘horse’s mouth’ is not actually correct information!

Payroll news | Payroll questions | Employment Law advice from Payroll Help

Last week we advised how the Disclosure and Barring Service (DBS) replaced the Criminal Records Bureau (CRB) at the end of last year and a new Update Service launches on 17th June 2013.

If the employer pays or reimburses the employee any fees that they have met, normally, this would be subject to tax and NICs.  However, in a written Ministerial Statement issued on 14 May 2013, it was confirmed that income tax is to be exempted from any benefit arising (either through the payroll as earnings or via the P11D as a benefit).

Similarly, amendments to the Social Security (Contributions) Regulations 2001 enter into force on 10 June 2013 meaning that such payments or reimbursements can also be disregarded for the purposes of National Insurance Contributions.

Further information

• Payroll Help 30 May 2013 – Tax Relief for Disclosure and Barring Scheme Fees
• HMRC – Tax Information and Impact Note (TIIN)
• Legislation – The Social Security (Contributions) (Amendment No. 2) Regulations 2013

Payroll news | Payroll questions | Employment Law advice from Payroll Help

On the 28^th May, Jason Latham, Deputy Director, Tribunals, HM Courts & Tribunals Service announced that the date for the implementation of fees into the employment tribunals (ET) and Employment Appeal Tribunal (EAT) will be Monday 29th July 2013. This follows on from an announcement made on 25^th April.

This is subject to the Parliamentary approval, from this date, all ET claims and EAT appeals from the employment tribunals presented to HM Courts & Tribunals Service will be liable under the Fees Order and supporting rules to:

• pay a fee, or
• provide an application for fee remission against that fee under the HM Courts & Tribunals Service remissions scheme.

Further information will be made closer to the introduction date and will be made available on the justice.gov.uk website.

Bringing a claim or an appeal to an employment tribunal is currently free of charge with the full cost being met by the taxpayer. By introducing fees, people using employment tribunals will start to contribute a significant proportion of the £84m cost of running the system. The aim is to reduce the taxpayer subsidy of these tribunals by transferring some of the cost to those who use the service, while protecting access to justice for all.

In this respect, employment tribunal fees are tailored to encourage businesses and workers to mediate or settle a dispute rather than go to a full hearing and follow on from the Ministry of Justice’s consultation with businesses and the public.

Some of the fees will be slightly lower than initially proposed in order to strike a fair balance between the needs of business and tribunal users.

However, the taxpayer will continue to meet the full cost of the Advisory, Conciliation and Arbitration Service (ACAS) which provides a free service to help workers and businesses settle disputes without the need to go to a tribunal.

From 29 July 2013, mediation by a judge will cost £600 rather than the £750 proposed in the 2011 consultation. The fee to take the administratively simpler ‘level 1’ claims to a full hearing will be £390 – which drops to just £160 if settled before the hearing fee is payable.

Many people on low incomes may not be required to pay the full fees – under the same remission system which already exists for court users who pay fees to use the civil courts’ services. Following this extension of this exemption system, the Government will review its use across both courts and tribunals and publish a consultation later this year as part of a wider review required by the introduction of Universal Credit in late 2013.

Fees to use the employment tribunal will be payable in advance, and most types of fee will only apply to the person bringing the claim. However the tribunal will have the power to order the unsuccessful party to reimburse the fee to the successful party. In practice, cases are often settled rather than there being a clear ‘winner’ or ‘loser’ and the issue of reimbursement would form part of the settlement.

Payroll news | Payroll questions | Employment Law advice from Payroll Help

The Disclosure and Barring Service (DBS) replaced the Criminal Records Bureau at the end of last year. It is launching its new Update Service on 17th June 2013.

Employers, historically, paid for the old CRB checks but this payment is now being moved on to the individual/employee. As such it will put individuals in greater control of their own information and allow DBS certificates to be reused when applying for similar jobs thereby reducing bureaucracy.

Individuals can choose to subscribe to the Update Service for an annual fee of £13 which will keep their DBS certificate up-to-date so that they can take it with them from role to role within the same workforce.

As a result millions of employees and volunteers will no longer have to apply for a new criminal record check each time they apply for a job.

If an individual has subscribed to the Update Service their employer will be able to go online, with the individual’s consent, and carry out a free, instant check to find out if the information released on the DBS certificate is current and up to date.

In a written Ministerial Statement issued on 14 May, it has been confirmed that Income tax is to be exempted from any benefit arising where an employer pays or reimburses fees for the Disclosure and Barring Service (DBS) online Update Service. This will also apply to fees for Criminal Record Bureau (CRB) checks.

Further Information

https://www.gov.uk/government/news/coming-soon-disclosure-and-barring-service-to-launch-the-update-service

Payroll news | Payroll questions | Employment Law advice from Payroll Help

On the “What’s New” part of their website, HMRC have announced that they have “produced a video to help you use the toolkits (running time 14 minutes)” Unfortunately, they have not made it clear that this is a re-release of an old video and it covers amongst other things:

• how to deal with tips collected
• students on the payroll and P38S procedures
• staff functions under £150.00 but taxis home paid after staff party should be included
• staff gifts

It is sad that it includes a procedure that was made redundant with the introduction of RTI.  True, there is a typewritten disclaimer at the start of the video which says that the tax treatment of P38s’ will change with the introduction of RTI, however, far from providing information that helps to reduce errors, the replication of out-of-date information could actually create confusion.

Further information

http://www.hmrc.gov.uk/agents/prereturn-support-agents.htm

Payroll news | Payroll questions | Employment Law advice from Payroll Help