Jury duty Employee tax implications

What is the correct treatment of salary when Jury allowance has been paid?

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Hello

A client is an employer who has had an employee go off on jury service

The ER paid the EE full pay during this time

The EE filled in a form for loss of earnings and receved the maximium £64.95 daily rate

The £64.95 had been taken off the EE as a net deduction from her pay.

I think this is incorrect.

If the ER had chosen to pay less than the EE's full pay then there was a valid claim for the Jury allowance - but the fact that there was full pay means there should not have been a claim.

The ER and EE are happy to say that there was an agreement that pay would be reduced during the jury service by the allowance amount, retrospectively, however even then the deduction of the allowance received should be a Gross deduction not a Net deduction.  side note I believe the EE is not subject to tax on the allowance

Am I correct that it should be a gross deductiona and that the EE allowance is not taxable

thanks

 

Replies (15)

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By williams lester accountants
21st Jan 2022 11:46

What did the employee fill in on the jury service claim form? As this asks whether the juror will suffer a loss of earnings?

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By hairyfingers
21st Jan 2022 12:36

I'm not sure but I can find out. I presume they said they were not getting paid and that the loss of pay was greater or equal to £64.95, as that is the maximum allocation per day and that's the amount they received.

It's more the principle - they got an allowance so the employer is now saying "well we'll have that back". But they've done it as a net deduction - I think it's a gross deduction.

I think the confusion is in the EE contract wording - it says "you will be paid full pay but will need to claim for the jury allowance" - it doesn't actually say pay will be reduced by the allowance amount, but implicitly the allowance is only payable if pay is reduced. So I think the assumption is the pay would be reduced by whatever allowance is paid.

So the deduction would be a gross deduction when the EE receives the allowance (and it is received as a non taxable amount -so the EE is slightly better off tax wise)

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RLI
By lionofludesch
21st Jan 2022 12:59

This bit on David's link pretty much confirms it should be deducted from gross pay.

Otherwise there'd be no spare personal allowances.

"When your employee returns to work

An employee on a cumulative tax code may have some unused Personal Allowance when they return to work.

Your payroll software will work out if they have less tax to pay on their next payday, or if they’re entitled to a tax refund."

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Replying to lionofludesch:
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By David Ex
21st Jan 2022 13:16

lionofludesch wrote:

This bit on David's link pretty much confirms it should be deducted from gross pay.

Do you know what? I think Google searches could catch on.

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Replying to lionofludesch:
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By I'msorryIhaven'taclue
21st Jan 2022 13:21

lionofludesch wrote:

This bit on David's link pretty much confirms it should be deducted from gross pay.

And is that a verdict upon which you are all agreed?

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Replying to I'msorryIhaven'taclue:
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By Hugo Fair
21st Jan 2022 14:00

Yes ... and to all questions asked by OP.

Although I've seen loads of Employment T&Cs with the same wording, it is sloppy & verging on plain wrong.
* EE can only claim if suffering a loss in earnings from ER (clue's in the name);
* If ER wishes to go the deduction route (really a kind of inverted top-up) then it must be 'taken' from Gross pay.
* Whether or not Jury Loss of Earnings allowance is taxable is not ER's concern.

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Replying to lionofludesch:
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By hairyfingers
21st Jan 2022 14:00

...and so the payment to the EE from the Jury service is non taxable? Seems to be the case (from other google searches...)

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Replying to lionofludesch:
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By gillybean04
21st Jan 2022 14:06

What about this part of the link though.

"To work out the top-up payment, subtract the court allowance from your employee’s usual take-home pay. This will give you the amount you need to give your employee."

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Replying to gillybean04:
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By lionofludesch
21st Jan 2022 14:17

gillybean04 wrote:

What about this part of the link though.

"To work out the top-up payment, subtract the court allowance from your employee’s usual take-home pay. This will give you the amount you need to give your employee."

Well spotted. Well, it sounds like whoever wrote that guidance doesn't know what they're talking about. They can't both be right.

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Replying to lionofludesch:
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By Tax Dragon
21st Jan 2022 14:22

Except one might refer to an employee that you do pay and one might refer to one that you don't.

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Replying to lionofludesch:
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By gillybean04
21st Jan 2022 14:42

I think the part you quoted (along same lines of thought as TD) that it was just general info, in case employers think the tax is wrong or they get any queries from employees about the tax being wrong.

After the part I quoted, it goes on to tell them that they should use their software to calculate the gross from the net.

So there will be a deduction from gross taxable. Just obviously net of normal tax/ni

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By lionofludesch
21st Jan 2022 17:24

Somebody ought to just say to the Courts Service "if you want folk to work for you, pay them wages like proper employers are supposed to do."

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Replying to lionofludesch:
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By Hugo Fair
21st Jan 2022 19:29

B..b..b..but it's not work - it's your public duty! Plus jury members are 'all equal', so they can't be paying your (or my) wages at the same time as the NMW to compadres sitting beside you.

I had to fake falling asleep in session to get discharged. Asked to explain myself I pointed out that my work wasn't getting done sitting in court, so I did it all night!

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Replying to Hugo Fair:
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By lionofludesch
21st Jan 2022 19:33

Hugo Fair wrote:

B..b..b..but it's not work - it's your public duty!

Being an MP is a public duty.

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