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Last Minute Special Offers |
Below are some reduced price courses only available to our newsletter readers:
*Prices exclude VAT.
You need to telephone the office to take advantage of these prices:
Telephone: 01295 225500 - Quoting NL180208.
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14th Annual HR & Payroll Conference 2008 - 5 March to 8 March 2008
ONLY A FEW PLACES STILL AVAILABLE!
Here are some details of our 14th Annual HR & Payroll Conference 2008, to be held at 18th Century Heythrop Park Hotel, Golf & Country Club, at Enstone near Chipping Norton, Oxfordshire, on the edge of the Cotswolds.
(For you X-Factor fans it was where the recent boot-camp was held for the 200 or so 'hopefuls' - we were considering renaming the Conference the 'taX-Factor')
The dates are Wednesday 5th March to Saturday 8th March 2008 but see please see page 6 of the downloadable PDF brochure for three different options.
Included in Conference price:
- 48 different workshop modules to choose from
- 4 key plenary sessions
- 12 key modules repeated
- 3 breakfast discussion groups
- 'by request' and 'one-to-one' sessions
- 3 nights accommodation
- Breakfast, lunch and evening meal
- Friday evening 'end of conference ball'
- Use of leisure facilities
We look forward to welcoming both new and past attendees to what is regarded by many as 'simply the best' conference for HR and Payroll.
For downloadable PDF brochure and booking form:
http://www.hrdps.co.uk/conference2008.pdf
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| HRDPS - Conference Ball - Friday 7th March 2008 |
We have come up with a great idea for those who cannot attend the full conference but would like to attend the conference ball.
For only £160 you can attend the ball and stay the night at the at 18th Century Heythrop Park Hotel, including breakfast the following morning.
Dress code for the dinner is strictly black tie and posh frocks.
We hope as many of you as possible can attend.
Please telephone 01295 225500.
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News Items – at 18th February 2008
In a judgement given on 5 February 2008 in the case James v London Borough of Greenwich, the Court of Appeal upheld the decision of an employment tribunal and the Employment Appeal Tribunal (EAT) that Ms. James, a temporary agency worker supplied to Greenwich Council over a number of years, was not an employee of the Council and was not entitled, as a result, to make a claim for unfair dismissal.
Although the decision, in itself, is unremarkable and consistent with many recent EAT decisions and makes no changes to current interpretation of the principles governing employment status, its significance is in Lord Justice Mummery’s postscript.
With regard to those attempting to find a way of giving non-existent rights to agency workers by applying to the courts, he said:
“Some litigants and their advisers and representatives appear to have unrealistic expectations about what courts and tribunals can legitimately do to remedy their grievance that the statutory right not to be unfairly dismissed was confined by Parliament to workers who have a contract of service with the respondent…Courts and tribunals…are not architects of economic and social policy. As they must operate within the legal architecture created by others, they cannot confer the right not to be unfairly dismissed on a worker who is without a contract of employment.”
His comments also included implied criticism of the government:
“The courts and tribunals are fully aware of the current controversy about the absence of job protection for agency workers, who do not have an express or implied contract of employment. A [2007] Private Members' Bill…was doomed to failure for lack of support from the Government and failed to get a reading. There is no current government proposal to introduce legislation giving agency workers similar rights to those enjoyed by employees.”
Despite these comments, Lord Justice Mummery stated that “it is not for [the courts and tribunals] to express views about a change or to initiate change.” Rather, it is “a matter of controversial social and economic policy for debate in and decision by Parliament informed by discussions between the interested parties - the Department for Business and Enterprise, the TUC, the CBI and other employers' organisations and the European institutions and governments of member states.”
He suggested, therefore, that “the increasing amounts of money, time and effort spent on litigating this issue in tribunals and on appeals might in some cases be invested more productively in making representations to and through bodies which can pursue the debate on policy or even reform the law.”
There was also some advice for employers. After describing the move towards a two-tier workforce, “one tier enjoying significant statutory protection, the other tier in a legal no man's land being neither employed nor self employed, vulnerable, but enjoying little or no protection”, he commented that “there is, however, nothing to prevent wise employers from recognising that their long term interests may be better served by treating their entire workforce in a responsible and considerate way than by insisting on the strict letter of the law.”
For details of a new Private Members’ Bill with measures to protect agency workers, currently before Parliament, see the separate item in this newsletter.
Further information:
James v London Borough of Greenwich http://www.bailii.org/ew/cases/EWCA/Civ/2008/35.html
In May 2007, the Government published a consultation document on the proposed administrative procedures for additional paternity leave and pay (APL&P), due to be introduced before the end of the current Parliament, likely from April 2010. Responding to the comments received from interested parties, the Government published its response document at the end of January 2008.
The following decisions are announced in the document:
- Responding to continued concerns over the potential for fraud, the earlier approach has been restated, that HMRC will carry out compliance checks and may impose financial penalties where it can be shown that claimants either fraudulently or negligently make a claim for APL&P.
- When an employee applies for a period of APL&P, the employer will be required to confirm an entitlement within a 28 day statutory period.
- The SC3 self-certificate will be amended to encompass both additional paternity leave and pay, although this may require an entirely new form. Completion of a form containing all the required information will be compulsory and employers will be allowed to produce their own substitute versions of the form, as long as they contain, as a minimum, the information on the standard HMRC form.
- Completion of an eligibility checklist by employers will not be made mandatory. It will be strongly recommended that employers use the checklist to demonstrate that they have acted with due care. If employers choose not to use the checklist then they will still need, by some other means, to satisfy themselves (and potentially also HMRC) that they have carried out the necessary checks for HMRC compliance purposes.
- If the father* wishes to change the start and/or finish date for APL&P, six week’s notice will be required. Employers will be free to agree to a shorter notice period if they wish.
- If the father* seeks to change the start of APL&P without giving the full six week’s notice and the change cannot reasonably be accommodated by his employer, the employer will have the right to insist that leave dates, whether paid or unpaid, are taken at the previously agreed times.
* References to “father” include partners and civil partners of mothers, and to members of adopting couples where there is an entitlement to Statutory Adoption Leave and Pay.
A further consultation is planned on the legal and technical aspects of the APL&P draft regulations.
Further information:
Government Response to Consultation http://www.berr.gov.uk/files/file44293.pdf
Pension scheme trustees may continue to use the pensions earnings cap, which officially ceased to exist from 6 April 2006, for the purpose of restricting pension payments from a registered pension scheme for a transitional period. The transitional period ends on the earlier of
- the date from which the pension scheme rules are changed so that the existing limits no longer apply, and
- the end of the 2010/11 tax year.
Although the earnings cap, fixed at £105,600 for 2004/05, has not been increased in legislation since April 2006, HMRC continue to review it annually for these transitional purposes. The notional value of the pensions earnings cap is increased from £112,800 for 2007/08 to £117,600 for 2008/09.
Further information:
Notional Earnings Cap http://www.hmrc.gov.uk/pensionschemes/newsletter25.htm#3
Notional Earnings Cap 2008/09 http://www.hmrc.gov.uk/pensionschemes/earns-cap-0809.htm
The first edition of the 2008/09 Employer CD-ROM is being sent to all employers during February. The disk provides the following new facilities, including a number of payroll functions:
- the facility to file online the P14s and P35 for 2007/08 for up to 9 employees
- a Net Pay Estimator
- an expanded Expenses and Benefits section
- student loans incorporated into the P11 Calculator.
Guidance for small employers on how to use CD-ROM for year-end filing has been issued on HMRC’s website.
The second edition of the CD-ROM, to be issued in May, will include
- a “wizard” to help employers decide if they can apply for a dispensation
- an interactive SSP2 that will store SSP records.
The contents of the CD-ROM, with the exception of the calculators and on-screen form completion facilities, may also be downloaded from HMRC’s website.
Further information:
Employer CD-ROM http://www.hmrc.gov.uk/employers/cdrom/index.htm
Sending your 2007-08 Employer Annual Return online from the 2008 CD-ROM http://www.hmrc.gov.uk/employers/0708cd-annual-return.htm
From 6 April 2008, the 42-day lead time for applying Student Loan start and stop notices is removed. The new procedure is for the notice to be applied from the first available payday after the SL1 start date or the SL2 stop date.
HMRC has clarified that the “first available payday” means the first pay day on which it is actually possible to apply that notice. If a start or stop notice is received before the next scheduled payday but after completing an automated or clerical payroll run, the change should be applied from the next payroll run.
Further information:
Student loans - important changes to start and stop notices http://www.hmrc.gov.uk/employers/student-loans-changes.htm
HMRC has made some changes to the initial developer specifications for the new A4 version of form P45 that will come into use from 27 October 2008.
The references to “taxable pay” that we queried in our newsletter three weeks ago was, in fact, an error by HMRC on the draft form. It is the employee’s total pay in the employment or in the tax year to date that is entered on the form, not the employee’s taxable pay.
To ensure that the printed copies of the P45 given to a leaver have exactly the same details as those shown on the Part 1 that is filed online, HMRC is recommending to developers that Parts 1A, 2 and 3 cannot be allowed to be printed unless Part 1 has been successfully submitted online and validation received from HMRC.
Further information:
Design specification for form P45 (Online) (Starter and Leaver details) http://www.hmrc.gov.uk/ebu/spec-p45.pdf
The Temporary and Agency Workers (Equal Treatment) Bill is a private members’ Bill, sponsored by Andrew Miller, Labour MP for Ellesmere Port and Neston. The Bill had its First Reading in the House of Commons on 5 December 2007 and its Second Reading is scheduled for 22 February 2008. The Bill is described as
“A Bill to provide for the protection of temporary and agency workers; to require the principle of equal treatment to be applied to temporary and agency workers; to make provision about the enforcement of rights of temporary and agency workers; and for connected purposes.”
Private Members' Bills are Public Bills introduced by MPs and Lords who are not government ministers. As with other Public Bills, their purpose is to change the law as it applies to the general population. They have to go through all Parliamentary stages but, as relatively little time is allowed for their consideration, most private members’ Bills never become law. This Bill is similar to the Bill that was sponsored by another Labour MP in December 2006 but which ran out of time in the last Parliamentary session.
The provisions of the Bill have obvious similarities to the “prevention of less favourable treatment” legislation for part-time workers and fixed-term employees. Less favourable treatment for those workers and employees is determined by identifying, respectively, “comparable” full-time workers and “comparable” permanent employees.
The same approach is proposed for temporary and agency workers – they should be treated not less favourably than “comparable” direct workers. A “direct worker” is a person who is not an agency worker and who is either
- an employee working under a contract of employment, or
- a contractor working under a contract for the provision of services other than as a self-employed worker.
Agency workers are workers who are supplied under a contract between an employment business or employment agency and an end user. Less favourable treatment would be identified by comparing the “basic working and employment conditions” provided for an agency worker and those provided for a direct worker. The direct worker would have to be a person, temporary or otherwise, who is
- employed by the same end user at the time the alleged less-favourable treatment takes place,
- performing broadly similar work with, if relevant, similar seniority, qualifications and skills, and
- based at the same establishment or, if there is no direct worker at the same establishment, a different establishment.
If no comparable direct worker exists, a tribunal would have to draw a comparison with how a notional direct worker would have been treated, taking relevant factors into consideration.
A worker’s “basic working and employment conditions” would be conditions relating to
- the duration of working time, rest periods, night work, paid holidays and public holidays,
- pay, including sick pay
- work done by pregnant women and nursing mothers, children and young people, and
- action taken to combat discrimination on the grounds of sex, race or ethnic origin, religion or beliefs, disabilities, age or sexual orientation.
Treatment of an agency worker would only be “less favourable” if
- it is on the ground that the worker is an agency worker, and
- it is not justified on objective grounds.
However, treatment would not be “less favourable” if it could be shown that the “pro rata temporis principle” applies, i.e. the difference in pay and benefits is in proportion to the hours worked by the agency worker and the direct worker.
Agency workers would have to be provided with information by the end user of any vacancies for work as a direct worker and any clause in the contract between the agency and the end user that would prevent an agency worker becoming a direct worker of the end user would be void. Agency workers would be protected against dismissal, or action short of dismissal, for exerting, or intending to exert, any right under these provisions. There would be the right for an agency worker to make a complaint to an employment tribunal and, in the case of alleged dismissal, both the agency and the end user would be deemed to be the employer and have joint and several liability for any award of compensation.
Further information:
Temporary and Agency Workers (Equal Treatment) Bill http://services.parliament.uk/bills/2007-08/temporaryandagencyworkersequaltreatment.html
Payroll deadlines during the next month
February 19 – For employers required to pay tax and NICs etc to the Accounts Office monthly, this is the deadline for payment to be received by the Accounts Office, unless made electronically.
February 22 – For employers required to pay tax and NICs to the Accounts Office monthly, this is the deadline for electronic payments to be cleared into the HMRC bank account. Payments through BACS must be initiated by February 20 at the latest.
March 5 – This is the final day of tax month 11. Tax and NICs etc. for payments made in the tax month to March 5 are due for payment to the Accounts Office by March 19, or by March 22 if paid electronically.
March 19 – For employers required to pay tax and NICs etc to the Accounts Office monthly, this is the deadline for payment to be received by the Accounts Office, unless made electronically.
March 21 – (March 22 is a Saturday) – For employers required to pay tax and NICs to the Accounts Office monthly, this is the deadline for electronic payments to be cleared into the HMRC bank account. Payments through BACS must be initiated by March 19 at the latest.
Payroll FAQ's
Completing Form P45 for a Leaver
(This FAQ appeared in the newsletter three weeks ago but contained some inaccurate information about leavers for whom a P45 must be completed.)
All employees who leave, including those who say they are not going to work again, must be issued with a P45 if they have been issued with a tax code, whether that derives from a P45, or from following P46 procedures, or from a coding notice issued by HMRC. Exceptionally, in the case of employees who are retiring from their employment and will be receiving a pension from the same employer, form P160 (form P46(Pen) from April 2009) is completed instead.
The following employees are not treated as having been issued with a tax code, so no P45 is issued when they leave:
- students for whom a valid P38(S) is in force
- casual workers engaged for not more than one week in the tax year (or two weeks in the case of harvest workers), who do not produce a P45 and whose earnings are
- between the NICs lower earnings limit and the PAYE threshold, or
- below the NICs lower earnings limit.
When an employee leaves, employers have the choice of
- completing a four-part paper P45 (by hand or printer), and sending Part 1 to the tax office and giving Parts 1A, 2 and 3 to the employee, or
- filing Part 1 of the P45 online and completing Parts 1A, 2 and 3 by hand or printer to give to the employee.
The second of these options will be mandatory for PAYE schemes with 50 or more employees from April 2009, and for all other PAYE schemes from April 2011.
The following Table shows the items of information that, by law, must be provided on the paper 45 or the online equivalent when an employee leaves. A new version of form P45 is to be introduced from October 2008 to allow additional information to be recorded that will be mandatory from April 2009. The number shown below against the paper P45 entries is the item number on the form.
Information |
Online P45 |
Paper P45
(to 9/08) |
Paper P45
(from 10/08) |
Employer PAYE reference
Office number
Reference number |
*
* |
1
√
√ |
1
√
√ |
Employee’s NI number |
* |
2 √ |
2 √ |
Employee
Title (Mr, Mrs etc)
Surname or family name
First or given name(s) |
*
*
* |
3
√
√
√ |
3
√
√
√ |
Leaving date (date employment ended, not necessarily the last working day) |
√ |
4 √ |
4 √ |
Student Loan deductions to continue (even if none were actually made due to the employee’s earnings levels) |
* |
5 √ |
5 √ |
Tax Code
Tax code used for the final payment
Week 1 or Month 1 |
√
√ |
6
√
√ |
6
√
√ |
Final pay and tax (only if cumulative)
Week number or month number
Total pay to date, including earnings in the previous employment
Total tax to date, including tax deducted in the previous employment |
√
√
√ |
7
√
√
√ |
7
√
√
√ |
Pay and tax in this employment (if W1 or M1)
Total pay in this employment only
Total tax in this employment only |
√
√ |
8
√
√ |
8
√
√ |
Employer reference information
Works or payroll number
Department or branch, if any |
*
* |
9 √
10 √ |
9
√
√ |
Gender – Male or Female |
* |
- |
10 √ |
Date of birth |
* |
- |
11 √ |
Employee’s private address
Address
Postcode |
*
* |
11
√
√ |
12
√
√ |
Employer certification
Name and address
Postcode
Date form completed |
*
*
* |
12
√
√
√ |
13
√
√
√ |
Employee has died |
√ |
√ |
√ |
* items that are already held in the payroll system or online database and that do not have to be input again when filing online
The paper forms must be completed in capital letters and without errors. When the paper forms are completed, the details at items 1 to 7 should appear on all parts of the P45. Items 8 to 13 appear only on Parts 1 and 1A.
Part 1 is sent immediately to the tax office or filed online. The remaining three parts are given to the employee, with instructions to retain Part 1A before handing Parts 2 and 3 to the next employer.
Once issued, a P45 may not be amended. All four parts of the P45 must have identical entries. If an employee asks for a copy, a duplicate must never be issued but the same information can be provided in a letter.
If an error is made when completing the form and it has not yet been issued to the employee or sent to the tax office or filed online, it may be destroyed and a new form completed. Changes should never be made by crossing out figures or using correction fluid.
If Part 1 has already been sent to the tax office or filed online when an error is discovered, the employer should write a letter to HMRC, giving details of the error. The corrected information can also be given to the employee in a letter, but never on a new P45.
If the employee has died, a “D” is entered in the box provided and all four parts of the P45 are sent to the tax office (or the other three parts if Part 1 is filed online). If any earnings are paid subsequently to the personal representative of the deceased, tax code BR must be used. No NICs are deducted from any payments made after the employee’s death.
If an employee is leaving but will continue to be paid by the employer as a pensioner, form P160 is completed instead of form P45. From 6 April 2009, form P46(Pen) will be used instead. The form must be sent to the tax office within 14 days of retirement, and a copy given to the employee. The employee’s tax code, on a W1/M1 basis, is used until otherwise notified by the tax office. If a new tax year starts before a new code is notified, the same tax code is used on a cumulative basis.
Certificates of election for married women (CA4139/CF383 or CF380A) and certificates of age exception (CA4140/CF384) are returned to the individuals concerned when they leave. However, certificates of deferment (CA2700) must be retained by the employer.
The annual rate of interest for the repayment of tax increases from 2% to 3% from 6 March 20098. The interest rate on overdue tax increases from 7% to 8%. The surcharge rate on overdue tax increases from 9% to 10%.
Further information:
Interest and Repayment Supplement – Change of Rate http://www.gov.im/lib/docs/treasury/incometax/pdfs/pn147.pdf
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