Payroll Consultation meeting 17 September 2007

Present:

Rhonda Howlader (Chair ) - HMRC
Graham Francis (Co-Chair)
Alison Bainbridge - HMRC
Julian Purdy - HMRC
Bob Johnson - HMRC
Tass Montgomery - HMRC
Sudha Shishodia - HMRC
Phil Nilson - HMRC
Alison McCrave - Employer rep
Pauline Dunham – Employer rep
Josie Smith – Employer rep
Carol Swift - Employer rep
Sarah Eason - Employer rep
Phyllis Freedman - Employer rep
Lynette Flavell - Employer rep

Apologies:

Nicola Dimond - Employer rep
Nadine Piper - Employer rep
David Whitaker - Employer rep
Tracey Crank - Employer rep
Sam Mann - Employer rep
Brain Comber - Employer rep
Amarjit Khaira - Employer rep
Lisa Hilton - Employer rep


Minutes/Contact point: Nahid Khan
Tel: 0191 2253950
email: Nahid Khan

1. Welcome and introductions

RH welcomed everyone to the meeting and stated she was especially pleased to be co-chairing this meeting with GF and that she hoped this would continue to encourage the panel to influence the agenda and help the discussions reflect issues that are important to employers. The minutes and outstanding action points of the last meeting weren’t agreed, will be agreed at next meeting.

2. Salary Sacrifice

Salary Sacrifice was introduced by the co-chair and PN. HMRC had previously canvassed the panel, asking if they operated a Salary Sacrifice scheme and to share their experiences. Most of the panel who operated Salary Sacrifice thought it was complex and laborious, and found the website frustrating. GF gave examples where the scheme is particularly difficult to manage, especially for people who go on maternity leave or have other changes of circumstances. There were comments made about the perceived lack of support from HMRC until after schemes had been audited. One or two members hadn’t experienced many problems at all and were operating it with relative ease. For the benefit of panel members who didn’t have a SS scheme in place, Phil explained that it has nothing really to do with HMRC because it is primarily an issue of employment law, not tax law. When Salary Sacrifice schemes were first introduced it was with the intention of reducing NI contributions, but things had moved on from then and HMRC now recognises that they are perfectly legitimate arrangements. Employers and employees who are thinking of entering into such arrangements, would be well advised to obtain legal advice on whether their proposed arrangements achieve their desired result. Phil went on to explain the role of HMRC (handouts were distributed to panel members re the session on Salary Sacrifice). PN agreed that the website is not particularly helpful and leads into pages which have little to do with Salary sacrifice. PN therefore agreed to ensure the information HMRC provides to employers and employees is reviewed.

AP1 - Phil to arrange for improvements to HMRC Guidance on Salary Sacrifice.

3. Structured Action Requests (SARS)

JP and BJ from IMS Portfolios gave a demonstration on changing employer details online. The demo couldn’t be a live one so was a model demo. The project has been running for 2-3 years and has a tight delivery date. HMRC are introducing the ability for employers and their agents to go online and:

  • Change the business address
  • Change business contact details( phone and fax number and e-mail address)
  • Add/change/delete Trade name
  • Add/change communication/correspondence name
  • Add/change communication/correspondence address
  • Change communication/correspondence contact details (where communication name and address are already held)
  • Delete all communication details (name, address and contact details together)

After the demo Julian and Bob answered questions raised by the panel. The panel agreed that it was good idea, but are experiencing some problems now with online filing. Julian asked the panel to send any queries to Nahid and she will pass them onto to Bob and himself. A panel member asked when they will know when it is fully operational, Julian advised to look out on the ‘What’s New’ pages on the website.

One panel member couldn’t view PAYE, where they can send nil payments for clients.

AP2 - BJ to send PAYE link. NK to arrange distribution to members.

4.Expenses and Benefits update

Rhonda gave an update around the guidance surrounding EXB, and confirmed HMRC ongoing commitment to reduce the employer administrative burdens. Web based guidance is being updated for EXB booklets and BIKs. RH and PN have examined the Irish system of putting all expenses and benefit payments through the payroll. The Irish system has been de-regulated to such an extent that it has significantly reduced the burden on Irish employers and has encouraged a move away from benefits to cash equivalents. She explained the Irish system around use of ‘Best Estimates’ for benefits and that it is treated with a light touch by the Irish Revenue. A general discussion followed on the issue of the P11D process and the difficulties they face-:

  • Who determines trivial gifts?
  • Why do you have to declare everything on a PSA
  • Why do you have to apply for PSA agreements every year - AP3 - Phil
  • Setting up tax award schemes with IR- an onerous task - AP4 - Alison to respond

The discussion then progressed to what support is provided by HMRC when employers have difficulties to resolve. There were examples given about Call Centres, that they are often difficult to get through to and that the advice given by staff can be inconsistent, with one example given where a member had been given advice that was incorrect.

There were also several issues given about the delay in receiving cheques in relation to PAYE overpayments.

AP5 - RH to arrange for Debt Management and Banking to deliver a talk to the panel at next meeting.

AP6 - RH to issue the report on the Irish visit to members.

5. 64-8

A number of panel members have had problems with the 64-8, AB taken on board a number of queries which she resolved for the panel. She went on to explain that there is a lot information available on the HMRC website including FAQ’s, messages about the redesign of the form i.e. new style paper form & the following iro faxed forms. Sudha explained to the panel that she attended an event called Customer Liaison event with Agent Representatives & CAAT (Central Agent Authorisation Team). The event was planned to give Agent Representatives a background to the Self Assessment registration process undertaken in NICO, visits were made to various teams. And an open forum was held for all attendees to raise and discuss issues they had. The day was well received and all attendees found it very useful to be given a demonstration of the processes as well as background to NICO.

6. Homeworking

The Chartered Institute of Taxation (CIOT) have asked for a sub group to be set up, re Homeworking, Rhonda wanted to know if any of the panel had employees that worked from home and explained that she was keen to feed in employer experiences of the issues surrounding homeworking. One panel member said they had employees working from home, but didn’t feel that it was being operated correctly, and perhaps didn’t understand how the guidance worked around claiming for electricity/broadband etc, there is guidance but doesn’t seem clear.

AP 7 - AB to look into implications from the tax point of view/ H&S issues.

Date of Next Meeting

This was confirmed 17th January 2007.