Statutory Payments Consultation Group

Meeting Thursday 22 January 2009

1.00 pm - 4.00 pm
1 Victoria Street, London, SW1H 0ET

Attendees

Employer Representatives [Reps]

Chris Hind (BCC)
Elaine Gibson (IPP)
David Harris (ICAEW)
Linda Pullan (Payroll Alliance)
Simon Parsons (IREEN)

Statutory Payments Government Departments [SPGDs]

Prabha Mistry (DWP)
Simon Clark (HMRC)
Nicola Dissem (BERR)
Des McKnight (HMRC) - Chairman

Apologies

Norman Green (BCS)
Lynsey Groom (FSB)
Dianne Spruit (Private Sector Payroll Group)
Jackie Petherbridge (FSB and Private Sector Payroll Group)
Shelley Fuller (DWP)
Kate Wheeler (DWP)
Ann-Maria Loughman (DWP)
Karen Haseldine (BERR)
Connie Hera (HMRC)

1) Introductions and background

a) Nicola Dissem from BERR was welcomed to the group – she had taken over the role previously held by Tom Ridge.

b) Purpose of Group was re-stated – Statutory Payments matters generally, from a practical operational point of view and to help give policy developments a practical steer.

2) Notes of last meeting - and matters arising

a) Electronic Record of SSP (SSP2) –

  • For employers without a large computer payroll system this was regarded as 'invaluable'.
  • SMP and SAP were not as complex as SSP, so although desirable it was not felt essential for HMRC to develop equivalent products (SMP2 and SAP2) for small employers.
  • SSP Opt-out conditions in Employer Helpbook - feedback at the last meeting had suggested the Helpbook led to misunderstandings by employers, and so HMRC had refined its guidance for 2009 with on-going help from Reps. Their help was constructive, much appreciated and contributed to a more informative piece of guidance.
  • Reasons for SSP not being paid by the employer - most reasons are covered within form SSP1, but for those reasons not included a model letter plus guidance for employers had been included in the 2009 Helpbook. Reps asked for the letter to be made interactive. HMRC was still exploring this.
  • Future feedback from Reps to steer HMRC guidance - as well as providing feedback on an ad hoc basis during the year (so that HMRC could consider amending its website guidance), Reps agreed to work with HMRC in the early stages of revising its Helpbook guidance annually. HMRC were keen to have this input.

3) Update from DWP

a) Update on planned new DWP website - from April 2009 DWP's website would, mainly, contain only corporate information, with the information on Statutory Payments being hosted on Businesslink for employers, and Directgov for employees. BERR had done this recently too, and Reps commented that some of the information now on Directgov was not as good as the material previously hosted by BERR.

Action Point: Reps should send details to Nicola Dissem.

b) Recent form SSP1 changes - feedback from Reps was noted.

c) Plans re major revision to Medical Certificate

  • DWP would be issuing public consultation document on new Med Cert and the associated Regulations in due course. Exact implementation date was uncertain.
  • Plan was for forms Med 3 and Med 5 to be blended into one.
  • Feasibility of electronically generated Med Cert was under consideration.

4) Sundry SSP issues

a) Can employers get paper versions of SSP1?

b) Provision of sick notes for employees on long term sick.

c) Offsetting of ESA against Occupational Sick Pay.

d) IB35 – what is its purpose?

e) Medical FMed 3 Certificate - will it show sickness in calendar days or working days?

The answers to these issues were discussed, then recorded on separate document and emailed to Reps on 10 February.

f) Offsetting of Statutory Payments, in particular SMP - can holiday pay be paid at times of maternity pay?

This is a complex issue, causing confusion to employers and employees. BERR guidance advises to allow annual leave to be taken before maternity leave. A question was asked about what happened if the woman did not return to work after maternity leave so had taken more annual leave than she was entitled to. BERR undertook to produce a written reply in due course.

5) Update from BERR

a) Additional Paternity Leave & Pay

  • No change. This group is to be informed if there were any news.

b) EU Agency Workers Directive - what importance or relevance does it have for employers at a practical payroll level?

  • The Agency Workers Directive had been adopted - giving temporary workers in the UK equal rights to permanent staff after 12 weeks with an employer. The'"12 weeks' period was based on an agreement between the TUC and CBI. There would be three years from December 2008 for the UK Government to implement the requirements of this directive.
  • BERR would issue in due course a consultation document on the draft Regulations. [Update - consultation document was published on 8 May 2009.]
  • Karen Wilshaw from BERR talked to the group about the early implications of the Directive - but much work remains to be done on this topic. Statutory payments not affected since agency workers already qualify for these.

6) Salary sacrifice and non-cash benefits during statutory maternity leave

a) HMRC had published guidance in May 2008 on Statutory maternity leave – salary sacrifice and non-cash benefits. BERR agreed to publish guidance to follow up some of the practical questions from employers on the rules during maternity leave.

b) One of the difficult issues was when a salary sacrifice arrangement could be changed. HMRC referred to Salary sacrifice Q&A)

c) HMRC promised to publish by end of March 2009 follow-up guidance on the Tax and NICs consequences of non-cash benefits during Statutory Maternity Leave and Statutory Adoption Leave – including in-year recording and end of year reporting obligations. Reps contributed ideas on the scope of the guidance and technical arguments; they also undertook to help refine early drafts.

[ Update - this SML&SAL Non - cash benefits (PDF 55K) guidance, with significant contributions from Reps, was actually published on 15 April 2009.

7) Next meetings

Thurs 23 April 2009 - 1.00 to 4.00 pm at HMRC offices 100 Parliament Street [update - postponed to 14 May 2009.]

Thurs 9 July 2009 - 1.00 to 4.00 pm at DWP offices Caxton House, Tothill St.

Thurs 8 October 2009 - 1.00 to 4.00 pm at BERR offices 1 Victoria Street

Thurs 28 January 2010 - 1.00 to 4.00 pm at HMRC offices 100 Parliament St.