Highlights (or lowlights?) from the PEG meetings

If you were able to attend your region’s latest Payroll & Employment tac Group meetings, you would have hopefully left feeling happy to have seen people (and enjoy some cakes), knowing that your peers were in a very similar situation to you, but perhaps overwhelmed by forthcoming changes or even things you should already be doing. Rest assured, you are not in a minority if you felt this way.

If you weren’t able to make it, this is a summary of the most prevalent and prevailing subject matters, plus discussions on potential next steps. A copy of the slides are available here.

Autumn budget

The meetings were generously hosted by KPMG and we were joined by HE Employment tax lead, Paul Moreels who was, as ever, a fountain of knowledge.

On average, it took around 1.5 hours to go through the first 2 slides on the Autumn Budget but that shouldn’t surprise you as these were the biggies, the changes to NIC and NMW.

There are various ‘estimated’ statistics available on how much this NIC change could cost the sector annually, from UCEA’s £372m to the OfS £430m (DfE are also planning an assessment). Most payroll managers attending the PEG had been approached by their FD’s to provide an estimate of the likely NIC increase, with eyewatering assessments that will not be washed through by increased student fees (if the institution even receive student fees).

Given the financial savings being sought in the sector prior to the Autumn Statement, most members were already considering cost saving measures, including:

• pension arrangements - DC schemes replacing USS et al for appropriate staff members and AVCs for LGPS
• holiday purchase schemes – employees could purchase an extra 5 days holiday, thus reducing pay and reducing NIC
• electric car salary sacrifice arrangements – schemes originally turned down for not being equitable are now back on the agenda

Reducing NIC’able pay is a worthwhile exercise, however, there should be checks and balances in place relating to NMW regulations. Most payroll teams carry out the normal NMW checks to ensure that hours worked (according to the contract) are paid at/over NMW or Real Living Wage. There are dangers of this approach, however, in relation to salaried worker calculations at the end of their ‘NMW’ year and resolutions/mitigations were discussed – however, many of these do not sit with the payroll team.

Increases to NMW and RLW have further eroded and compressed pay spines. In previous years, there was perhaps a small ability to pay allowances to mitigate supervisors on the same wage of the individuals they are supervising, there appears to be little that can be done currently.

Termination payments

Voluntary redundancy programs are prevalent, with some universities on round 3. We talked through pay/benefits and what ‘buckets’ they would fall into and how you should never trust a label – always find out what the payment/provision actually is and ignore whatever label you’ve been given.

HMRC Activity

Paul took us through the types of activities HMRC are conducting currently, including:

• ‘Getting to know you’ – a teams call reaching out and learning a little more about your institution
• Structured risk reviews – a 2 day, on-site meeting
• Focused review on one particular subject matter – CIS, subsidiaries, Apprenticeship Levy
• NMW reviews – regionally based unless specific complaint has been received

BUFDG

We ended with a round-up of new BUFDG resources that will be available in the coming months, plus talked through what resources members would like to see. A list will be provided to members so that they can, effectively, prioritise my ‘to do’ list in 2025.