P Simon Parsons MSc FCIPPdip MBCS is a payroll expertise specialist with over 30 years of experience. He is the Director of Compliance Strategies at SD Worx and also Director at PAYadvice.UK. He is the Chair of the BCS (the Chartered Institute of IT) Payroll Specialist Group and Chair of IReeN, the electronic exchange with government user network. He is the winner of the Strathearn Lifetime achievement 2012 and a member of Reward 300 for 2020.
Do you have the original FPS file, can you correct, then resubmit.
EYUs don’t exist, the need for then ended in April 2018. You can now send an FPS file late.
As for SMP recovery and EA, that’s the EPS, not FPS nor EYU. Send the relevant EPS values again.
As for whether software should allow FPS adjustment for years it dor don’t do that employee, or for values 5tat as far as the payroll are concerned are not in error. Well the idea of payroll is to pay people, not fix HMRC issues!
Net pay received by the individual and pay for UC purposes are not the same thing!
However, there remain serious issues with RTI and UC use of the data. Inadvertent duplication of data by HMRCare likely to still occur in the millions per annum. The finger of blame is usually pointed firmly in the direction of the employer, except often the HMRC respondent is pointing at a mirror.
There is poor handling of resubmission data (perfectly acceptable practice by employers), yet duplication occurs on the PTA and sometimes duplication f record creation. And more recent evidence shows duplication occurring especially with payment after leaving (PAL) submissions even where the Payroll ID (PID) match and even where late reporting reason H (correction) is applied. PALS data is something that HMRC do not appear to be able to handle.
And yes, anything other than monthly reporting the same payment date (even if not paid the same date due to non banking days) continue to be of concern.
In its not 11th year of operation, you would think that many of these common and normal occurrences could be handled as part of business as usual.
Many employers will have experienced the years of waiting for correction, even experiencing debt collectors attempting to grab business assets to resolve a non-existent debt.
RTI process along with UC remains a nonsense for a sizeable small proportion.
As it’s continuous employment the holiday carries over as one continuous right. The P45 is a tax administrative document only in this case and does not reflect termination of employment - I would suggest.
Suggest that as they have the record of business miles completed, an amount up to 45p for those business miles could be paid tax and NI free. Any excess would be taxable, suggest under the relevant section.
There is no fuel scare charge as it’s not a company car.
A zero hours worker has an entitlement of 5.6 weeks. The pay due is the prior 52 week average (and before April 2020 12 weeks) up to the prior Saturday to the leave being taken. Zero pay weeks are excluded from the averaging by statute.
Accrual only applies to the first holiday year in 1/12th of the 5.6 week entitlement, it’s not based on hours worked.
So how can hours reduce later in the year when the contract hours are zero?
The challenge here is timing of holiday leave choice and the requirements of ERA224 and subsequent revisions (re 12 moving to 52).
In your example there is no overpayment or recovery, and suspect that the indicated entitlement is equally incorrect unless it is a true reflection of 5.6 weeks entitlement.
Only if they leave would there be a revision of entitlement based on 1/365 of the annual proportion of 5.6 weeks across the days counted as employed (not worked). Falls under Working Time Regulation 14.
So if the average earnings reduced later in the year (whether 12 or 52 week average), should holiday pay already paid be recovered. Suggest the concept is nonsense, the requirement for averaging is based upto the Saturday before the actual leave entitlement was taken. It’s not adjusted for later earnings periods which are irrelevant until the next actual leave is taken and only for that new leave.
Suggest that principle was confirmed by the tribunal, Court of Appeal and now the Supreme Court.
The 12.07% method was never allowed under law, although maybe considered easy, was mathematically wrong/unlawful and unlikely to result in the correct amount of Parliament set entitlement or pay.
You deduct after tax. However there is a serious risk of NMW breach as the deduction is likely to be viewed as a deduction for the benefit of the employer which reduces NMW pay.
Under a Sal sac arrangement, the employee is actually contributing nothing as they have agreed to a pay cut (they never earned it) in order to receive a free benefit in kind (company car).
My answers
Do you have the original FPS file, can you correct, then resubmit.
EYUs don’t exist, the need for then ended in April 2018. You can now send an FPS file late.
As for SMP recovery and EA, that’s the EPS, not FPS nor EYU. Send the relevant EPS values again.
As for whether software should allow FPS adjustment for years it dor don’t do that employee, or for values 5tat as far as the payroll are concerned are not in error. Well the idea of payroll is to pay people, not fix HMRC issues!
There are means and ways.
Net pay received by the individual and pay for UC purposes are not the same thing!
However, there remain serious issues with RTI and UC use of the data. Inadvertent duplication of data by HMRCare likely to still occur in the millions per annum. The finger of blame is usually pointed firmly in the direction of the employer, except often the HMRC respondent is pointing at a mirror.
There is poor handling of resubmission data (perfectly acceptable practice by employers), yet duplication occurs on the PTA and sometimes duplication f record creation. And more recent evidence shows duplication occurring especially with payment after leaving (PAL) submissions even where the Payroll ID (PID) match and even where late reporting reason H (correction) is applied. PALS data is something that HMRC do not appear to be able to handle.
And yes, anything other than monthly reporting the same payment date (even if not paid the same date due to non banking days) continue to be of concern.
In its not 11th year of operation, you would think that many of these common and normal occurrences could be handled as part of business as usual.
Many employers will have experienced the years of waiting for correction, even experiencing debt collectors attempting to grab business assets to resolve a non-existent debt.
RTI process along with UC remains a nonsense for a sizeable small proportion.
As it’s continuous employment the holiday carries over as one continuous right. The P45 is a tax administrative document only in this case and does not reflect termination of employment - I would suggest.
Suggest that as they have the record of business miles completed, an amount up to 45p for those business miles could be paid tax and NI free. Any excess would be taxable, suggest under the relevant section.
There is no fuel scare charge as it’s not a company car.
The Car Allowance does not directly relate to mileage and is earnings subject to tax and Class 1 NI, student loan deductions etc.
The 45p and 25p for tax reliefs relate to it not being a company car.
Often with car allowance schemes the business mileage claim matches the company car related rates but up to the employer.
Then the employee can claim the extra reliefs as expenses via SA.
The NI reliefs relate to 45p regardless of numbers of business miles.
Absolutely not as they have made no contribution for the car.
So they are liable to the full car benefit charge with no reduction.
The saving they benefit from is the difference of the tax and NIC saving versus the company car benefit charge (2% for list price for EVs).
P11D is required unless Payrolling and the car details are then being reported on the FPS.
Yes it will be taxed as employment related income (which it is). They will have the benefit of their own personal tax free allowances.
A zero hours worker has an entitlement of 5.6 weeks. The pay due is the prior 52 week average (and before April 2020 12 weeks) up to the prior Saturday to the leave being taken. Zero pay weeks are excluded from the averaging by statute.
Accrual only applies to the first holiday year in 1/12th of the 5.6 week entitlement, it’s not based on hours worked.
So how can hours reduce later in the year when the contract hours are zero?
The challenge here is timing of holiday leave choice and the requirements of ERA224 and subsequent revisions (re 12 moving to 52).
In your example there is no overpayment or recovery, and suspect that the indicated entitlement is equally incorrect unless it is a true reflection of 5.6 weeks entitlement.
Only if they leave would there be a revision of entitlement based on 1/365 of the annual proportion of 5.6 weeks across the days counted as employed (not worked). Falls under Working Time Regulation 14.
So if the average earnings reduced later in the year (whether 12 or 52 week average), should holiday pay already paid be recovered. Suggest the concept is nonsense, the requirement for averaging is based upto the Saturday before the actual leave entitlement was taken. It’s not adjusted for later earnings periods which are irrelevant until the next actual leave is taken and only for that new leave.
Suggest that principle was confirmed by the tribunal, Court of Appeal and now the Supreme Court.
The 12.07% method was never allowed under law, although maybe considered easy, was mathematically wrong/unlawful and unlikely to result in the correct amount of Parliament set entitlement or pay.
You deduct after tax. However there is a serious risk of NMW breach as the deduction is likely to be viewed as a deduction for the benefit of the employer which reduces NMW pay.
Under a Sal sac arrangement, the employee is actually contributing nothing as they have agreed to a pay cut (they never earned it) in order to receive a free benefit in kind (company car).
If using 2.5 days then half.