Payroll Newsletter 20.01.10

News items at - 20^th January 2010

Introduction

This is a rather technical newsletter so we have provided brief summaries of the two principal articles.  The first article explains the new right to apply to undertake study and training courses during employment, which larger employers will have to handle from April 2010.

The other subject area is pensions, with one item about the increase in the normal minimum pension age from April 2010, and a more detailed review of the many statutory Orders and Regulations that nearly complete our understanding of the NEST pension scheme, with its requirement for automatic enrolment and mandatory employer contributions.  You can now work out when your business will have to take up its duties in the transition period between 2012 and 2016.

Employment Rights

Applications to undertake study and training

Summary

The right to apply to undertake study and training courses during employment becomes law for employees of large employers in April 2010, and employees of all employers in April 2011.  The Regulations define the format of employee applications, the timetable that employers must follow when considering the applications, and the implications of agreeing to or rejecting the applications.

Detail

Starting 6 April 2010, employers with 250 or more employees will be required to consider applications made by employees to undertake courses of study or training that will improve their effectiveness in the employer’s business, or improve the performance of the employer’s business.  The provisions will be extended to all employers from April 2011.  The legislation has not, as yet, been introduced into Northern Ireland legislation.

The procedures are similar to those that apply to flexible working applications.  However, employers are not required to follow the statutory procedures if they already have effective arrangements in place that achieve the same objectives.  They may, for example, consider applications from employees who do not meet the statutory length of service condition, or who do not make an application in the prescribed format, or who make an application too soon after a previous one.

The Department for Business, Innovation and Skills (BIS) has now published guidance about the “time to train” provisions, on the Business Link website for employers and on the DirectGov website for employees.  The following notes summarise the way in which employees must make their applications and how employers must respond.

Entitlement

Employees who qualify for this right must have at least 26 weeks’ continuous employment.  There is no upper age restriction.  However, excluded from the right are:

• young people who are still of compulsory school age
  
• *young people under age 18 who have the right to paid time off for study or training because they are under age 18, have finished full time secondary or further education but have not yet achieved a prescribed level of achievement, e.g. grades A* to C in five GCSE subjects (Employment Rights Act 1996, sections 63A to 63C)
  
• agency workers
  
• members of the armed forces.

* Between 2013 and 2015, this right to paid time off for study or training will be replaced in England by the obligation on young people aged 16 and 17 to participate in certain types of education or training if they do not have the equivalent of two Advanced Level qualifications. The exclusion will also apply to these young people.  (Employment Rights Act 1996, sections 63D to 63K)

Applications

Employees must make a written application to undertake study and/or training.  The study or training requested must have the purpose of improving

• the employee’s effectiveness in the employer’s business, and
  
• the performance of the employer’s business.

The application may be for one or more types of study or training and does not have to lead to a qualification.  How the study or training would be undertaken is not rigidly defined and may, for example, be undertaken

• on the employer’s premises, in the employee’s home or elsewhere
  
• during working time or otherwise
  
• with or without supervision by the employer or anyone else
  
• within or outside the UK.

There is no prescribed format for applications but they must include the following information:

1. a statement that it is being made under the provisions of section 63D of the Employment Rights Act 1996
   
2. the following details of the proposed study or training:
   
   • its subject matter
     
   • where and when it would take place
     
   • who would provide or supervise it
     
   • what qualification (if any) it would lead to
     
3. an explanation of how the employee thinks the proposed study or training would improve:
   
   • the employee’s effectiveness in the employer’s business, and
     
   • the performance of the employer’s business
     
4. the date of the application
   
5. the date and the manner (e.g. post, email) on which the employee’s last application (if any) was submitted.

Valid and invalid applications

An employer may refuse to consider an application if, on the day the employer receives the application, a period of less than twelve months has passed since an earlier valid application was made.  BIS guidance suggests that an employee should be advised within 4 weeks if a request is invalid for this reason or because it does not contain the necessary information.  The employee may then resubmit the application at the right time or with the errors corrected.

An employee may withdraw an application verbally or in writing, in which case it is still considered to have been a valid application, requiring a year to pass before another application can be considered.  If an application is withdrawn verbally, the employer should confirm it in writing.

When making an application, an employee may ask that an earlier request, submitted within the previous 12 months, be ignored.  The employer must ignore an earlier application if one of the following three situations is relevant:

• where the employee indicates that an earlier request, which was submitted less than 12 months after an earlier one, was submitted in error and wishes to withdraw it
• where training, to which the employer had agreed, was cancelled, other than as a result of the employee’s conduct in relation to the study or training
• where agreed training never started, for a reason outside of the employee’s control.

Timetable

On receiving a valid application, the employer may consider it and accept it, in which case written confirmation must be given to the employee within 28 days.

Alternatively, if the employer intends to reject the application in whole or in part, or has counter-proposals, one or more meetings should be held with the employee.  The employer may, for example, be agreeable to funding the training but not to it being carried out in working time, or prefer to provide the training in-house, or know of options that would better suit the employee.    Following the meeting(s), the employer must inform the employee of the decision within 14 days.

An employee may bring a work colleague to the meeting(s), e.g. a union learning representative, (or even, at the employer’s discretion, a non-employee if the employee has special needs).  The companion may not speak for the employee but may address the meeting and confer with the employee.  A companion who is an employee of the employer is entitled to time off with pay to perform such duties.

If the employer requires additional information in order to consider the application, the employee may be asked for further details.  If the employee does not respond, the application may be treated as having been withdrawn.  Similarly, if an employee fails to attend a meeting more than once without reasonable cause, the application may be treated as withdrawn.  The employee should be notified in writing.

If the person who normally handles applications is away when one is received, the period before a meeting must be held may be extended for up to 28 days, starting on the day the person returns to work.

There is no specified timetable for meetings and appeal meetings, but dates for meetings must be agreed mutually and put in writing.  Meetings must be rearranged if the employee’s chosen companion cannot attend.

Reasons for rejection

After considering the application and holding meetings as necessary, the employer may decide to reject some or all of the application.  Rejection may only be for one or more of the following statutory reasons:

1. that the proposed study or training to which the application, or the part in question, relates would not improve
   • the employee’s effectiveness in the employer’s business, or
     
   • the performance of the employer’s business
     
2. the burden of additional costs
   
3. detrimental effect on ability to meet customer demand
   
4. inability to re-organise work among existing staff
   
5. inability to recruit additional staff
   
6. detrimental impact on quality
   
7. detrimental impact on performance
   
8. insufficiency of work during the periods the employee proposes to work
   
9. planned structural changes.

Communicating the decision

If the employer accepts the employee’s proposals, or if alternative arrangements have been agreed at meetings, the decision must be confirmed in writing, specifying

• the subject of the study or training
  
• where and when it will take place, and over what period
  
• who will provide or supervise the training
  
• what qualification (if any) the training will lead to
  
• how the training time will be taken - eg whether it will be paid, unpaid, or whether the employee will work flexibly
• whilst undertaking the training
  
• how the costs of the training will be met
• any conditions which, if the employee failed to meet them, the agreement would be withdrawn.

If the agreement involves a change to the employee’s terms and conditions, e.g. a reduction in the employee’s working hours because the training time will not be paid, established internal procedures should be followed.

If the employer rejects some or all of the employee’s proposals, the written decision must specify

• the business reason(s) for which the application is being rejected
  
• why the business reason, or reasons, apply in the employee’s circumstances
  
• the appeal procedure
  
• the date of the notice.

Appealing the employer’s decision

The employee may appeal against the employer’s decision to reject part or all of the application on any reasonable grounds.  An appeal meeting must be held within 14 days and, where possible, heard by a different manager than the one who considered the initial application.  The appeal decision must be issued in writing within 14 days, specifying the grounds for the decision and why they apply in the circumstances.

If the employee is still dissatisfied with the employer’s decision, efforts should be made to resolve the matter informally or by means of the employer’s grievance procedure.  Beyond that, a complaint could be made to an employment tribunal if the decision was based on incorrect facts or the proper procedures were not followed, but not simply because the employee disagrees with the decision.

An employment tribunal can order the employer to pay an award of up to eight weeks’ pay, plus a further two weeks’ pay if a companion was not permitted to attend meetings, and/or require the employer to reconsider the request using correct procedures.

Employees are protected, as usual, from detrimental treatment or dismissal as a result of making an application or exercising any right under the arrangements.

Further information:

From the employer’s perspective - Consider time for training

From the employee’s perspective – Time to train: time to learn new skills

Pension Schemes

Normal minimum pension age rises from April 2010

Pension reforms introduced in 2003 introduced a single minimum pension age of 50 for all registered occupational and personal pension schemes.  This minimum age increases to 55 from 6 April 2010.  From that date, pension scheme members will normally only be able to draw their pension when they are 55 or older.

Scheme members between the ages of 50 and 55 who are already drawing their pension are not affected.  The upper pension age, before which all pensions must start to be taken, is unchanged at 75.

It is still possible for scheme members to start their pensions before age 55 where, for example,

• they have severe health problems that prevent them carrying on their occupation or have a short life expectancy, or
  
• their pension age is “protected” under the rules of an occupational pension scheme that were in force on 10 December 2003.

There are no statutory rules preventing pension schemes from introducing the new minimum pension age before April 2010 and some schemes have already changed the rules to this effect.

HMRC has published a series of questions and answers on this change but, in principle, scheme members should raise issues that affect them personally with their employer, pension scheme administrator or financial adviser.

Further information:

Normal minimum pension age to rise to 55 from April 2010

Statutory minimum retirement age

Registered Pension Scheme Manual

National Employment Savings Trust

Final regulations presented to Parliament

Summary

A series of statutory Order and Regulations have been published that describe most of the final structure of the NEST scheme that will be introduced in 2012.  In particular, they provide information about the operation of the new Corporation that will act as Trustee to the scheme, and the four-year implementation timetable so that every employer can now find out when the scheme will affect them.

Detail

On 12 January, eleven statutory Orders and sets of Regulations (some still in draft) were laid before Parliament to finalise important aspects of the new workplace pension schemes that are to be introduced in 2012.  Formerly known as “pension personal accounts”, the optional statutory pension scheme that employers will be able to use to fulfil their new duties is now known as “NEST”, the National Employment Savings Trust.

We published a detailed description of the scheme last October, following the publication of the final Regulations in draft.  (See www.paypershop.com/payrollblog/pension-personal-accounts001-7/)  A number of changes have been made to the rules and procedures described in that article, particularly in connection with the staging period timetable and auto-enrolment of jobholders into the scheme.  It is now possible for every employer to identify the date from which they will be required to comply with their duties under the new contributory pension arrangements.  The following notes explain the changes that are set out in the new Regulations and Orders.

Implementation

For any particular employer, automatic enrolment commences from the employer’s staging date.

• The staging period during which employers are first required to comply with their statutory duties runs from October 2012 for four years.  The staging dates are the first day of each successive month throughout the period, with the exception of April 2016, July 2016, and each December.
• In the case of money purchase and personal pension schemes, the first three years are the first transitional period during which employer contributions must be at least 1% of qualifying earnings.  The fourth year is the second transitional period during which employer contributions must be at least 2%.  Employer contributions at the full 3% rate are required from October 2016.
• In the case of defined benefits and hybrid schemes, the transitional period is the four-year period.
• The number of employees in a PAYE scheme is the latest number available to the Pensions Regulator on 1 April 2012.
  
• Between October 2012 and July 2014, an employer’s staging date is determined by the number of employees in the PAYE scheme, with the exception of a single intake in March 2014 which will involve a limited number of employers with PAYE schemes with fewer than 50 employees and that have specified numbers or letters as the last two characters of the PAYE reference number.
  
• The intakes between August 2014 and February 2016 will involve only employers with PAYE schemes with fewer than 50 employees, and their staging date is determined by the last two characters of their PAYE reference number.
  
• The intakes between October 2012 and February 2016 will exclude new employers that first pay employees on or after 1 April 2012.  The staging dates from those employees will run between March and September 2016.
  
• Where an employer first pays employees on or after 1 April 2016 and the employer does not already have a staging date, the staging date is the day on which PAYE payments are first paid.
  
• Where an employer has two or more PAYE schemes, the staging date is the staging date of the PAYE with the earliest staging date, and that same staging date applies to the other(s).
  
• An employer with a staging date specified in the Regulations may take up the automatic enrolment duty from a staging date that is earlier than the specified staging date if the employer has
  
• agreed with a qualifying pension scheme that automatic enrolment may start from the earlier staging date (which exceptionally includes 1 December 2012), and
  
• notified the Pensions Regulator in writing not less than one month before the earlier staging date.

The following detailed Table is based on that included in the Regulations.  Where the first day of any month is not a working date, the staging date is the next following working day, ignoring Saturdays, Sundays, bank holidays and other public holidays.

Postponement of automatic enrolment

An employer with a large number of short-term workers may wish to postpone automatic enrolment to avoid having to enrol them unnecessarily.  The last Regulations, still in draft form, allow postponement in this situation but only where,

• automatic enrolment occurs within three months of the postponement date, i.e. what would otherwise have been the enrolment date,
  
• in the case of money purchase and personal pension schemes, the ongoing employer contributions are at least 6% of qualifying earnings and total contributions from both employer and jobholder, including tax relief, are at least 11%,
  
• in the case of defined benefit schemes, contributions are made that maintain the same pension on retirement as would have applied if automatic enrolment had not been postponed, and
  
• automatic enrolment has not been previously postponed in employment with the same employment in the twelve months preceding the postponement date.

This revised provision allows automatic enrolment of short-term workers to be postponed but prevents employers from using serial short-term contracts to repeatedly postpone enrolment.

Trustee Corporation

The Trustee Corporation that is set up by the Pensions Act 2008 to manage the statutory scheme is the “National Employment Savings Trust Corporation” and it has a financial year that ends on 31 March each year.  The Corporation comes into existence on 5 July 2010.  From the same date, the Personal Accounts Delivery Authority (PADA) is dissolved and all of its property, rights and liabilities are transferred to the Corporation.  The transfer falls with the TUPE Regulations in respect of the transfer of PADA’s staff to the Corporation.

For the purposes of broader pensions legislation, the Corporation is the scheme Trustee and is required to meet the statutory obligations on pension scheme trustees, but with some modifications.

• The Corporation is not required to obtain an auditor’s statement about contributions made under an occupational pension scheme, due to the potential size of the scheme.
  
• The requirement for pension schemes to have member-nominated trustees does not apply as the NEST scheme has a members’ panel to represent the scheme members.
  
• The requirement for pension scheme trustees to consult with the sponsoring employer(s) before making changes to scheme rules is replaced with an obligation to consult the employers’ panel.
  
• The restriction on pension scheme investment in employer-related investments, i.e. products related to the sponsoring employer, to no more than 20% of the scheme’s current market value do not apply, due to the wide range of participating employers.  However, government bonds are not considered to be employer-related investments.
  
• The requirement for pension schemes to pay a fraud compensation levy does not apply as the NEST scheme is not employer-sponsored.

The legislation obliges the Trustee to accept any employer as a participant in the NEST scheme who chooses to use it to fulfil the duties imposed on employers and agrees to the scheme terms and conditions.  This mandatory acceptance does not apply, however, to employers who apply to take up their duties from a staging date earlier than that specified for their PAYE scheme in the legislation.  In that situation, the Trustee may decline to accept an employer into participation at that time.

Similarly, once an employer has been admitted as a scheme participant, the Trustee must admit any jobholders and workers put forward for scheme membership, but not necessarily those put forward for membership before the employer’s statutory staging date.  The Trustee must allocate a pension account to each member, accept contributions and, in specified circumstances, refund contributions.

The Trustee must also accept into scheme membership “self-employed” persons and “single person directors” between age 16 and 75 and working in the UK.  Persons are

• “self-employed” if they are in employment but not employed by someone else. 
  
• “single person directors” if they are directors of a company, employed by that company under a contract of employment and there are no other employees in the company.

Members’ and employers’ panels

The Trustee is required to set up a “members’ panel” and an “employers’ panel” in order to consult about the operation, development or amendment of the NEST scheme.  They must be operational within 12 months of the first member contributions being made.  As voluntary membership of the scheme may start during 2011, the panels should be in place by the time automatic enrolment starts in October 2012.

The panels must have between nine and fifteen members and some of the members must be members or participating employers of the NEST scheme as the case may be.  The panel members may receive “reasonable payments”.

The members’ panel’s consultation role includes matters relating to the job descriptions and selection criteria for the members of the Corporation.  One member of the panel has to be involved with the shortlisting and interviewing of candidates.

Annual contribution limit

As specified initially in legislation, the annual contribution limit is £3,600 in a tax year, but this is based on the average earnings index for December 2005.  The limit must be adjusted in line with the average earnings index before the first contributions are paid into the scheme and thereafter from the start of each tax year.  If the limit had been adjusted annually since 2005 based on the December index for each year, it would currently stand at around £4,050 and may be around £4,300 when the scheme commences.

Contributions, in the context of the contribution limit, are any contributions made by a participating employer, on behalf or in respect of a scheme member, i.e.

• the minimum permitted contributions required by the quality requirement for a money purchase scheme (8% of
• qualifying earnings from October 2016, but lower in the transitional periods), and
  any contributions above 8% of qualifying earnings in the relevant pay reference period.

Other payments and refunds may occur but they are not taken into consideration.

Contributions that count towards the annual limit are treated as being paid to the scheme when they are received by the Trustee.

Contributions received by the Trustee that exceed the annual limit may not be applied to the member’s account and must be refunded unless

• the amount to be refunded is disproportionate to the costs of making the refund, or
  
• the contributions have already been applied to the member’s account.

Where a person is employed by more than one participating employer, the Trustee may accept contributions from the employers but, if the combined contributions exceed the annual limit, only the amount up to the limit may be applied to the member’s account and the excess must be refunded to the member or participating employer.

Employer registration

The following is a brief summary of the procedures that each employer must follow to register and re-register with the Pensions Regulator and that the Pensions Regulator must follow where contributions are not paid over.

Employers are required to provide information to the Regulator regarding their compliance with their statutory duties in four specific situations:

First registration

1. within two months following the employer’s staging date
2. after the end of the staging period, within three months of the first time that any worker first receives PAYE income

Re-registration

1. in relation to each PAYE scheme, within two months following the date of automatic re-registration
2. in relation to each PAYE scheme, within three months after the end of the period of three years since the previous provision of information.

The regulations list in detail the information that must be provided in each of these situations, including, as appropriate, information about

• the employer
  
• the person providing the information
  
• the occupational or personal pension scheme
  
• the employer pension scheme reference
  
• number of jobholders subject to automatic enrolment
  
• number of jobholders subject to postponement of automatic enrolment, or in defined benefits or hybrid scheme
  
• number of workers who are members of an automatic enrolment scheme
  
• number of workers in each PAYE scheme not included in the figures above.

It is presumed that forms will be made available for the use of employers in each of these registration or re-registration situations.

Compliance and penalties

Employers, trustees or managers of occupational pension schemes and providers of personal pension schemes are required to keep specific records which must be made available to the Pensions Regulator on request.  Records must be retained for six years, other than opt-out notices, which must be kept for four years.  These periods are not tax year or pension years, but relate to the date of each document.

The Pensions Regulator may issue, as appropriate,

• a compliance notice, for a contravention of one or more of the employer duties
  
• a third party compliance notice, for a contravention of one or more of the employer duties because of a failure by a third party
  
• an unpaid contributions notice, for non-payment of contributions by the due date
  
• a fixed penalty notice, for failure to comply with another notice
  
• an escalating penalty notice, for failure to comply with another notice.

Where the Regulator issues a compliance notice or an unpaid contributions notice to an employer, the employer must pay over any unpaid contributions within three months.  If they are not paid within that time, the employer also becomes liable to pay personally any unpaid employee contributions.  Interest is also payable on unpaid contributions at a rate that is 4.2% above the retail price index at the time.  The Regulator may estimate the amount of any unpaid contributions by multiplying together (1) the annual maximum contribution limit divided by 12, (2) 8%, (3) the estimated number of jobholders, and (4) the number of months involved.

Where the Regulator issues

• a fixed penalty notice for non-compliance with other notices, the penalty is £400
  
• an escalating penalty notice for employer non-compliance that resulted from the failure of a third person (e.g. the pension scheme), the penalty is £200 per day
  
• an escalating penalty notice for employer non-compliance is otherwise a penalty of between £50 and £10,000, depending on the number of persons in the employer’s PAYE scheme
  
• a penalty notice in respect of prohibited recruitment conduct (i.e. recruiting on the basis of whether or not a person might opt out of automatic recruitment), the penalty is between £1000 and £5000, depending on the number of persons in the employer’s PAYE scheme.

An employer or other person to whom the Regulator has issued a notice may ask in writing for the notice to be reviewed within 28 days of the date the notice was issued.  The Regulator may choose to review a notice with 18 months of the date of issue.  The Regulator may subsequently confirm, vary or revoke the notice, or substitute a different notice.

Where there is a complaint to the Regulator that the employer has induced a worker in some way to give up scheme membership or to opt out of membership, the Regulator may only issue a compliance notice if the contravention occurred within

• six months before the complaint was made, or
  
• four years before the date on which the Regulator informed the employer of an investigation into the complaint, if no previous complaint had been made.

Transfers from pension funds

The Pension Schemes Act 1993 contains provisions that permit transfers out of pension funds when employees leave their employment and for those funds to be put into another pension scheme.  Those provisions do not apply to the NEST scheme until the member reaches minimum pension age (age 55 from 6 April 2010) or an earlier date in the case of an ill-health retirement.

Protected disclosures

The Employment Rights Act 1996 contains provisions that provide employees with the right not to suffer detriment treatment as a result of making a “protected disclosure”, otherwise known as “whistle-blowing”.  These provisions also apply to disclosures to the Pensions Regulator in matters relating to employers’ duties under the Pensions Act 2008.

Further information:

Final auto-enrolment regulations published

Millions to get first pension – employers to pay in

National Employment Savings Trust Order 2010

Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010

Personal Accounts Delivery Authority Winding Up Order 2010

National Employment Savings Trust Corporation Naming and Financial Year Order 2010

Employers’ Duties (Implementation) Regulations 2010

Employers’ Duties (Registration and Compliance) Regulations 2010

Transfer Values (Disapplication) Regulations 2010

Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2010

Application of Pension Legislation to the National Employment Savings Trust Corporation Regulations 2010

National Employment Savings Trust (Consequential Provisions) Order 2010

Pensions Act 2008 (Commencement No. 5) Order 2010

Payroll Calendar for the Next Month

January 19 – This is the deadline for payment of tax and NICs to the Accounts Office, for tax month 9 by employers who pay monthly, for tax months 7 to 9 by employers who pay quarterly, unless they make their payments electronically.

January 22 – For employers who pay their tax and NICs to the Accounts Office electronically, this is the deadline for electronic payments to be cleared into the HMRC bank account.  Payments through BACS must be initiated by January 20 at the latest.

January 31 – This is the final date by which the responsible person for an employer-financed retirement benefit scheme must inform HMRC that a scheme has come into operation.

February 2 – This is the date by which any changes to the provision of company cars in the three months to January 5 must be reported using form P46(Car).

February 5 – This is the final day of tax month 10.  Tax and NICs etc. for payments made in the tax month to February 5 are due for payment to the Accounts Office by February 19, or by February 22 if paid electronically.

February 19 – For employers required to pay tax and NICs etc to the Accounts Office monthly, this is the deadline for payment to be received by the Accounts Office, unless made electronically.

February 22 – For employers required to pay tax and NICs to the Accounts Office monthly, this is the deadline for electronic payments to be cleared into the HMRC bank account.  Payments through BACS must be initiated by February 18 at the latest.

---

GUERNSEY

Payroll Calendar for the Next Month

February 15 - For employers with 80 staff or more, this is the deadline for payment of tax deducted during January to the Income Tax Office.

ISLE OF MAN

Payroll Calendar for the Next Month

February 5 – This is the final day of tax month 10.  The T35 Remittance Card and ITIP/National Insurance in respect of the payments made in the tax month to February 5 must be sent to the Income Tax Division by February 19.

February 19 – This is the deadline for submission of the T35 Remittance Card and ITIP/National Insurance to the Income Tax Division for tax month 10.

JERSEY

Payroll Calendar for the Next Month

January 30 – This is the deadline for providing each employee with an annual summary of remuneration and tax deducted.

February 15 – For employers with 80 staff or more, this is the deadline for payment to the Social Security Department of the contributions calculated for January.

February 15 – This is the deadline for submission of the monthly return and payment of tax deducted in January to the Income Tax Office.

REPUBLIC OF IRELAND

Payroll Calendar for the Next Month

January 23 – For employers who make their payments (and file form P30) through Revenue On-Line Service (ROS), whether required by law to do so or not, this is the deadline for P30 monthly PAYE/PRSI payments.

February 14 – This is the deadline for P30 monthly PAYE/PRSI payments to the Collector General for January by employers who pay monthly, unless they pay (and file form P30) through Revenue On-Line Service (ROS).

February 15 – This is the deadline for issuing P60 Certificate of Pay, Tax and PRSI for 2009 to all employees.

February 15 – This is the deadline for submitting Form P35 for the year ending December 2009.

February 23 – For employers who make their payments (and file form P30) through Revenue On-Line Service (ROS), whether required by law to do so or not, this is the deadline for P30 monthly PAYE/PRSI payments.

  (Note: These dates also apply to equivalent RCT payments and returns made by principal contractors.)

---

Payroll FAQ's

P11D and P9D Reporting – Telephones

Are there any circumstances in which an employee can have two mobile phones at the same time without a tax charge?

Section 319 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) provides a tax exemption for “the provision of one mobile telephone for an employee without any transfer of property in it”.  In principle, therefore, an employee who is provided with two mobile phones concurrently, which remain the property of the employer, will have to pay tax on one of them.  The second phone is taxable as an “asset placed at the employee’s disposal” in section L of form P11D and the cash equivalent is the cost incurred by the employer in providing the phone, less anything paid by the employee towards the cost.

The legislation does not say which of the two telephones is the one that is taxable.  There is nothing to stop the employer reporting the phone with the lower cash equivalent.

There are, however, three situations where an employee could have two, or even more, telephones at the same time without incurring a tax charge on them.

1. Section 319 also limits the provision of a mobile phone to the use of one mobile telephone number.  This makes it possible for an employee to have, for example, a mobile phone and an installed car phone with separate SIMs, as long as they share the same telephone number.
   
   
2. A separate exemption in section 316 of ITEPA removes any tax liability for the provision of “accommodation, supplies and services” in circumstances where
   
   
   • any private use by the employee or member of the employee’s family or household is not significant, and
     
     
   • where it is used away from the employer’s premises, it is provided solely so that the employee can perform the duties of the employment.
     
     If, therefore, the employer restricts the second telephone to business use only, that phone qualifies under the S.316 exemption and the other phone, which could be used exclusively for private use, is exempt under S.319.
     
     The s.316 exemption also applies to a computer that meets the two conditions, so it could also cover a Blackberry or PDA which, because of having computer-type facilities in addition to being a mobile phone, is viewed by HMRC as a computer.  An employee could, therefore, have a mobile phone for private use and a Blackberry or PDA solely for business use, without a tax charge for either.
     
     
3. Up to and including the 2005/06 tax years, s.316 also provided a tax exemption for additional mobile phones provided for employees and for mobile phones provided for members of an employee’s family and household.  That more generous arrangement was repealed from April 2006 but continues to apply to employees who already had two or more mobile phones at that time.  As long as the arrangements under which the phones were provided do not change, an employee continues to be exempt from tax for the additional phone(s).
   
   However, if the arrangement under which a second phone was provided changes, e.g. it is replaced or upgraded (other than under the terms of a warranty that was part of the original arrangement), the tax exemption ceases to apply to that phone.  Similarly, if a second phone is withdrawn from one employee and given to another employee to use, any tax liability is considered in the context of the new recipient’s circumstances.
   

---

Click here if you wish to unsubscribe