Norman Green (BCS)
Lynsey Groom (FSB)
Sylvia Bushrod (Payroll Alliance)
Elaine Gibson (IPP)
Simon Parsons (IREEN)
Nicola Dissem (BIS)
Karen Haseldine (BIS)
Mark Norton (BIS)
Jon Petchey (BIS)
Ann-Maria Loughman (DWP)
Simon Clark (HMRC)
Des McKnight (HMRC) - Chairman
David Harris (ICAEW)
Chris Hind (BCC)
Linda Pullan (Payroll Alliance)
Dianne Spruit (Private Sector Payroll Group)
Jackie Petherbridge (FSB and Private Sector Payroll Group)
Shelley Fuller (DWP)
Kate Wheeler (DWP)
Connie Kirk (HMRC)
a) Welcome extended to Sylvia Bushrod on her first visit representing Payroll Alliance.
b) Congratulations offered to Elaine Gibson who recently qualified for MSc in Payroll Management.
c) Notes of last meeting were agreed.
d) SMP1 new version (employer's notification to employee of reason for not paying SMP) went live on 5 October - marked SMP1 10/09. If employers access it via DWP website they would always get the up-to-date version. If employers keep a paper stock, they could still use the old version if they want to - but it's preferable to use new version. The form can be found on the Directgov website (opens new window).
e) EU proposals to amend Pregnant Workers Directive
Consultation closed in June 2009 and a government response will be issued
in due course. We will return to this topic at a future meeting.
f) Stringer v HMRC
i) This case had been referred to the European Court regarding entitlement
to holiday during sickness absence. The decision was that there was no bar
to the payment of holiday pay during a period of SSP.
ii) Government was still considering the implications of this judgement.
iii) Guidance will be provided in due course on issues raised at the last
meeting of this group on 9 July:
(1) leave issues
(2) off-set between holiday pay and SSP and the effect on entitlement to recovery
under Percentage Threshold Scheme
g) Re-styling of helpbooks for Statutory Payments (SP)
The suggestion to abandon the use of two columns per page - a practice of value in a paper document, but less user-friendly for electronic formats - was still being investigated. HM Revenue & Customs (HMRC) would report back on this at the next meeting of this group on 28 January 2010.
h) 'Payrolling benefits-in-kind' - and impact on Statutory Payments (SPs)
i) Update following meeting:
(1) 'payrolling benefits' is not expected to affect the calculation of SPs
or recoveries. SPs are calculated from Average Weekly Earnings (AWE) which
are based on gross earnings subject to Class 1 National Insurance contributions
(NICs). Some benefits are now subject to Class 1 and therefore must already
feature in calculating SPs and in recoveries. However most benefits are subject
to Class 1A NICs and these are not included in calculating SPs or recoveries.
It is not expected that payrolling benefits will alter this position. It is
essential that employers adopting payrolling of benefits can properly distinguish
between earnings which are subject to Class 1 and those subject to Class 1A.
(2) Under 'payrolling benefits' tax and NICs liabilities on benefits could
arise when there was no other pay - as can happen towards the end of Statutory
Maternity Leave when SMP has ended. Advice on the tax and NICs consequences
in this scenario has already been provided on the HMRC
website (PDF 55K).
i) SMP internet calculator errors
A solution was still being investigated by HMRC. Reps were concerned that,
if a solution was not found readily, then the errors should be publicised
to employers and Employer Helpline should be informed. (Update: helpline has
been made aware and message has been placed on the appropriate landing page.)
j) Changes in EU cross-border NICs liability and impact on entitlement to SPs - will return to this at a later meeting.
k) New pension reform changes - will pensions have to be deducted from SPs? Will return to this at a later meeting.
l) Changes to existing medical certificate and impacts for SSP
i) Target implementation date still April 2010.
ii) Consultation had closed. A government response would be published in due
course along with the relevant draft Regulations.
iii) An area of difficulty was those cases where the employee may be fit for
some work but not fit for the normal work pattern. Clear guidance for employers
would be needed. Reps agreed to help refine early drafts. (Update: general
information was included in helpbook for 2010-11 but more detailed guidance
will be provided before April 2010 - probably via Business Link.)
m) Flu pandemic
A potential impact of the pandemic has increased pressure on GPs' surgeries. This needed to be managed. Other measures were in hand to do this, so it was felt that, for the time being, there was no need for legislative change to the self-certification period for SSP. However employers were being encouraged to be flexible in applying the self-certification and medical evidence rules. (There was guidance for employers on the pandemic and SSP on the Business Link website.)
i) Reps found the guidance on employers' obligations and flexibilities helpful and asked for similar guidance to be incorporated within the Employer Helpbook for SSP for 2010. (Update: some changes have been made to the helpbook. For the most up-to-date pandemic information employers are directed to the Directgov website.)
n) Form SSP1 (new version) substitutes
i) Employers declining to pay or stopping payment of SSP must in law provide
the employee with a written explanation. Form SSP1 is provided by DWP for
this purpose. But the law also allows employers to adopt substitute electronic
versions of the form SSP1, so long as they contain a certain minimum content.
ii) Part A is needed in its entirety - to identify the employee.
iii) Part B (stating the employer cannot pay SSP on or after the date specified)
is also needed, with at least one reason with the appropriate code letter
(A - K).
iv) A fuller explanation of the reason must be provided - as in Part E of
DWP version.
v) Parts C and D are also essential.
vi) The information on 'If you are an employee' and 'Where to get help or
advice' is also needed - it provides information and advice the employee may
not receive elsewhere.
vii) Style requirements are flexible - so long as the substitute is recognisable
by Jobcentre Plus staff as similar to DWP’s SSP1.
viii) Substitute SSP1 forms do not require approval by any government department.
ix) Reps asked that future helpbooks state clearly the requirements for substitute
SSP1 (and similarly for SMP1, SPP1 and SAP1). (Update: requirements have been
stated on helpbooks for 2010-11 for all except SMP which will be updated next
year.)
o) Other reasons for not paying SSP
i) Occasionally reasons arise for not paying SSP which are not included with reasons A - K on form SSP1. Helpbook guidance says a letter can be used to inform the employee - and provides an example letter. This is not statutory - and there is no requirement for approval of any 'substitute' versions. However employers are encouraged to use the example letter.
p) Additional Paternity Leave and Pay (APL&P)
i) Government had announced recently its intention to introduce APL&P
for babies due from 3 April 2011. It would apply to adoption as well as
to birth cases. (Update: adoptions from abroad will be included at the
same time.)
ii) Extending SMP, SAP and MA beyond 39 weeks - it was still government’s
goal to extend these to 52 weeks but the timing had to depend on economic
circumstances and the fiscal position.
iii) Formal consultation on Regulations for APL&P would end on 20 November
2009.
iv) Adoption rules are to be based on matching for adoption - not placement.
This is consistent with SAP and SPP, and will give more certainty for employers.
v) In exceptional cases where father becomes entitled to APL&P early (baby
premature and mother dies) it was confirmed that:
(1) leave entitlement could last until the baby was one year old
(2) ASPP entitlement could last for the remainder of her Maternity Pay Period
(up to a maximum of 39 weeks)
vi) In response to suggestions made during previous consultation employers
would be entitled to ask for a copy of the child’s birth certificate
and for details of the mother’s employer - and if the requested details
were not provided the employer would be entitled to refuse to pay ASPP.
vii) The principles in the court cases of Alabaster and Gillespie would not
apply to APL&P - those cases were about maternity, not paternity.
viii) It was confirmed that, in certain circumstances expected to be rare,
the father’s employer could enforce on the employee a period of unpaid
leave. For example where unexpectedly the mother did not return to work and
the father’s employer was unable to change arrangements to cover the
father’s original additional paternity leave plans at short notice.
ix) In preparation for ASPP HMRC was working to:
(1) provide on its website an electronic calculator for ASPP from October
2010, to help with the earliest cases which could arise from November
(2) arrange changes to the employer end of year returns for 2011-12 so they
could capture ASPP data (for the few cases arising in 2010-11 employers would
be asked to report ASPP data in the existing boxes for SPP)
(3) put in place from about October 2010 a validation service to test employer
end of year returns for 2011-12
(Notes for Payroll Software Developers would keep readers up to date on such
issues.)
q) BIS, with some input from reps, was working on further guidance for employers in the complicated area of childcare vouchers and other non-cash benefits during Statutory Maternity Leave/Statutory Adoption Leave. This arose from ongoing questions from employers and reps.
r) There was a useful discussion on SP guidance and the differing needs of different audiences. Meeting the needs of some for the full complexities could be distracting and confusing for those like smaller employers needing only the basics.
s) Practical ways were discussed to keep guidance simpler for smaller employers, while still meeting the more complex needs of others. Ideas would continue to be explored - including more use of flowcharts (both within helpbooks, and published separately to make them more accessible); short (1-page or 2-pages) summaries in bullet-point format, for example in the style of the old helpcards.
t) Helpbooks were already being re-styled for 2010 to make them easier for employers to navigate. Plans were already under way to move HMRC guidance across to the Business Link site in a simpler format. Guidance was already supported by electronic calculators and a helpline calculation and advice service so that no employer needs to calculate SP manually.
u) Reps felt that, although employer guidance had much improved over recent years, focus needed to be placed on the simpler needs of smaller employers.
v) If KIT days (maximum 10) are exceeded, then statutory leave is brought to an end. This has other potential consequences, such as loss of rights to statutory protections.
w) Reps asked for guidance on this to be improved.
Thursday 28 January 2010 in 100 Parliament Street. Three additional meetings were to be arranged for 2010.
