Safe Travel & Subsistence schemes with the Agency Workers Directive, the Missing Link!

Transcription

1 Safe Travel & Subsistence schemes with the Agency Workers Directive, the Missing Link! Sue Ollerenshaw Efficient Employment Tax Solutions Limited Tel +44 (0)

2 Safe Travel & Subsistence schemes with the Agency Workers Directive, the Missing Link! Example of savings available Process Decisions Eligibility Opting out Major pitfalls How does this effect other benefits and credits etc?

3 Example of Savings - 5 daily allowance 5.75 sacrifice Gross Pay Pay sacrifice ( 28.75) Taxable Pay Tax ( 53.76) ( 48.01) NIC ( 30.94) ( 27.78) Expenses Weekly Net Annualised Saving Employee Employer

4 Example of Savings - 5 daily allowance 6.90 sacrifice Gross Pay Pay sacrifice ( 34.50) Taxable Pay Tax ( 53.76) ( 46.86) NIC ( 30.94) ( 27.15) Expenses Weekly Net Annualised Saving Employee Employer

5 Process Feasibility employee numbers, pay & working patterns Drafting contracts and procedures for operating in practice Ensuring salary sacrifice effective and NMW compliant Drafting procedures for claiming/paying expenses Agreeing Employee Communication Application for P11D Dispensation Full Disclosure imperative Systems testing Go Live! Ongoing audit

6 Decisions Split of Saving Recording eligibility Banking of NMW restrictions Opt-in or opt-out Probationary period Qualifying days for SSP Company wide or by branch/site etc

7 Eligibility conditions Business journey Number of hours continuously away from home/permanent workplace Depot based - returning home or to depot Claiming expenses from client Free meals provided obtaining receipts/contemporaneous notes audit sampling

8 Major Pitfalls Salary sacrifice ineffective or too aggressive Additional employment rights SSP etc Non eligible employees included eg major players from as few as 15% to 100% of employees included Restrictions on where prepared to work Students and seasonal workers NMW failures Changes in practice not notified or full disclosure not made to HMRC not carrying out agreed audit protocols

9 Major Considerations Travelling appointment Geographic Area Depot based Temporary Workplace "Expectation" all or almost all of the period of the employment 24 months or more Similar journeys "Continuous period"

10 Other Considerations Salary sacrifice & NMW Employment Law Client perception TUPE Insurance? Employee communication Procedures for demonstrating to HMRC monitoring above checks

11 How does this effect other benefits and credits etc? Overtime, bonuses, shift allowances, pay reviews no impact redundancy etc no impact NMW need to monitor and possibly bank Employee and Employer Pension Contributions and Life Assurance appropriate adjustments to be made Statutory Sick Pay only if earnings fall below LEL Statutory Maternity, Paternity and Adoption Pay will be affected consider opting out 23 weeks before Student loans repayment may reduce even to nil if earnings fall below equivalent of 15,000 per year

12 How does this effect other benefits and credits etc? Child Tax Credit and Working Tax Credit based upon taxable pay Basic State Pension only impact if below LEL for year State second pension (S2P) and age related rebates Incapacity Benefit and Jobseeker s Allowance only impact if below LEL for year Other benefits, Council Tax, Housing benefit etc income related so may be affected but not on a pound for pound basis NHS Low income scheme net pay so may be affected Maintenance increase in net pay should be notified Mortgage references - affordability and notional pay