CIPP Policy Update - December

5 December 2018

CIPP policy update Tax and NICs costs of Seasonal Rewards

Just over a fifth of poll respondents' factor in the tax and National Insurance contribution (NIC) costs of their Seasonal Reward Scheme.

In the first of our series of festive quick polls, we asked the payroll community if the tax and NIC costs are considered when deciding what is included in their Christmas reward schemes.

Of the 148 responses received, over half do not provide any kind of seasonal reward scheme (58%) but of the remaining 42% over half (22%) said that yes, the tax and NIC costs were a consideration. 15% said that the costs were not a consideration in decision making at all, and the minority of 5% recognised that the costs should have been factored into decisions, but they actually had not.

Payroll Professionals are in a unique position to really help their business. With payroll being one of the biggest parts of any business, it has a major influence over company costs. The knowledge held by payroll professionals is key to efficiency savings within an organisation, the tax and NIC costs of reward packages being a prime example.

As the CIPP's reiterated in its Future of Payroll report , the information that payroll must have to adhere to regulations is essential to strategic business making. It can provide business intelligence and analytics regarding an organisations' most valuable asset - its employees, and one of its highest costs - their pay.

The Future of Payroll report (2017-18) report is the first research paper in a series - to be produced annually - which goes some way to predict the future of payroll; this first report anticipating developments based on the responses provided by payroll professionals, representing 2.3 million employees in the UK.

We have now completed research for the 2018-19 report and it will be interesting to see some of the emerging trends when comparing year-on-year results. We will publish the report through News On Line when it becomes available later in the year.

Parental bereavement leave and pay

BEIS has published its response to the parental bereavement leave and pay consultation which confirms key aspects of the policy to be set in regulations. As a result of the responses received, the government has taken the following decisions:

  • the policy will use a broad definition of a 'bereaved parent' centred on the notion of 'primary carer', with the guiding principle being that the relationship should be parental in nature
  • parental bereavement leave and pay can be taken as a single block, or as 2 separate weeks
  • employed parents will have a window of 56 weeks to use the entitlement
  • notice requirements will be flexible and will distinguish between leave taken very soon and leave taken at a later period
  • evidence requirements will mirror existing requirements used for other family leave and pay rights, where it is practicable to do so.

Geographical extent: The Parental Bereavement Leave and Pay measures apply to Great Britain only.

As we stressed in our consultation response to BEIS, and at every opportunity thereafter, it is vital that this statutory right is supported by clear, comprehensive and timely guidance. The Policy team will continue to work with BEIS and will review and publish draft guidance when it becomes available.

The Diligence against Earnings (Variation) (Scotland) Regulations 2018

The Diligence against Earnings (Variation) (Scotland) Regulations 2018 have been laid before Parliament and changes to the rate of deductions are due to come into force from 6 April 2019.

A review of the Diligence against Earnings Regulations was conducted earlier this year by the Accountancy in Bankruptcy (AiB).

The Debtor Scotland Act 1987, Schedule 2, sets out the amount that can be deducted from a debtor's wages in an earnings arrestment. An earnings arrestment is when a debtor's employer receives an instruction to deduct an amount from an employee's wages and pays it directly to their creditors. Ministers gave an undertaking to review the tables every three years.

Note – the weekly rates in this final regulation (The Diligence against Earnings (Variation) (Scotland) Regulations 2018) differ from those in the original draft so if anyone has action on the draft information you will need to revise the rates.

  • Author Profile
    • Sp avatar Diana Bruce

      Diana is CIPP Senior Policy Liaison Officer and Guest Author for Smart Pension.