09 April 2019 Caroline Jones, Employment tax director
The recent round of spring Payroll and Expense Group meetings has now concluded. Here is a brief roundup of those areas discussed.
NMW
There were significant discussions around NMW and accommodation and the fact that if ‘living’ accommodation was provided then it did not matter how any rent or associated costs were paid, it would still need to be taken into account for NMW purposes, subject to the off-set rules. Where the accommodation does not meet the definition of ‘living’ accommodation the normal deduction rules apply and so if the accommodation is paid via some other method than net pay deduction it should not need to be taken into account for NMW purposes.
Accommodation provided to students who also work for the university was discussed. It is understood, from KPMG, that the provision of accommodation and whether rent paid by the student needed to be taken into account has been challenged by HMRC. There is a specific exemption which applies to the provision of students with accommodation, subject to certain conditions.
We are await confirmation from HMRC about the potential impact from an NMW perspective on volunteers in clinical trials and whether there is a potential issue which may differ from the tax treatment laid out in the agreement between HMRC and BUFDG.
Accommodation
There were discussions around the withdrawal of the customary exemption relating to accommodation provided to employees in HE was discussed. No-one was able to provide confirmation that HMRC had approached them to ask whether accommodation was being provided to staff. It would be really useful if you could let Caroline know what categories of employees (excluding VCs or Principals) are provided with accommodation in order for BUFDG to consider this.
HMRC has advised BUFDG that the decision to notify universities that HMRC no longer considers it customary to provide accommodation to employees of universities came as a result of information from various sources, including compliance reviews. It is on this basis that HMRC considers that no provided accommodation in the sector meets the customary criteria.
It is understood that there should be no impact on the representative occupier exemption where either successive post holders have been provided with different accommodation or the incumbent needs to move out of accommodation for a period, say for refurbishment. HMRC ‘s technical team is being consulted and BUFDG will be provided with confirmation or further guidance.
HMRC review of universities
The feeling from all the PEGs was that HMRC is much more active. The approach to PAYE reviews differs from university to university. There are some examples of questionnaires on BUFDG’s discussion boards. Most common areas focused on were:
There was also some interest in international payrolls at a couple of universities.
Common Roles Document
This is progressing well and is on schedule to be ready for conference. A small group of interested parties will review the draft document before it is finally launched.
PSAs
Some discussion about the new format in terms of enduring agreement, everyone seemed to think that this was an improvement on the annual process. Immigration fees should be refundable if already paid and no longer due.
Strike Pay
HMRC’s initial indications are that there will be no settlement arrangement as there is for equal pay.
If you submitted returns under Real Time Information (RTI) prior to 2014-15 an Earlier Year Update (EYU) is required for each individual in respect of the relevant payments in the years 2014-15 to 2018-19.
NIC Enter the full amount of the arrears paid on the current year payroll record at the time of payment, calculate NIC’s in the normal way and then include on your next FPS.
You must send amended forms P35 and P14, you cannot do this using BPT. The software that you used to run your payroll in the 2012-13 tax year may allow you to do this, otherwise you can use the online forms which are part of HMRC’s PAYE Online service. In addition, HMRC requires you to provide them with schedules detailing, total amount of payments made under deduction, including the amount of tax deducted for each relevant year, a summary of the EYU’s.
Itemised payslips
The consensus was that whilst many areas were clear there was still some uncertainty and that each type of engagement with variable pay should be considered but that payments made based on a day or half day fee regardless of time spent would not fall within the requirements.
Other topics raised
a) Globalisation – the first joint BUFDG/UHR seminar had been held and it was hoped that this was going to be replicated in Scotland. It will form the basis of some tax conference sessions too. Separate China focused events were to be arranged with KPMG.
b) Timings of meetings – next meetings to be hosted by EY and held October/November. Preference was for the meetings to take place early in month, although preferably after 6th of each month.
c) Project funds – this is to be added to next agenda as payments may be made where academics retain control of the money in terms of how it is spent.
d) External examiners -changes in guidance in 2015