NHS ISLE OF WIGHT CLINICAL COMMISSIONING GROUP ASSISTED RELOCATION PROCEDURE

Transcription

1 NHS ISLE OF WIGHT CLINICAL COMMISSIONING GROUP ASSISTED RELOCATION PROCEDURE

2 AUTHOR/ APPROVAL DETAILS Document Author Written By: Authorised Signature Authorised By: Helen Shields Loretta Outhwaite Date: March 2017 Date: 4 th February 2014 Job Title: Chief Finance Officer Effective Date: 30 March 2017 Approval At: CCG Remuneration Committee Job Title: Chief Officer Review Date: March 2019 Date Approved: 30 March 2017 VERSION CONTROL Version Date Changes /02/14 Initial draft /06/14 Draft policy to Remuneration Committee for comment 1.1 4/08/14 Staff consultation /09/14 End of consultation 2.1 6/11/14 Final Approval by Remuneration Committee /03/17 HR update and review 4 P age

3 CONTENTS Part Description Page 1 Introduction 2 Eligibility 3 General Conditions 4 Taxation 5 Internal Procedure Appendix Description Page 1 HMRC guidance 7 2 Assisted Relocation application form 5 P age

4 1. Introduction 1.1 This procedure supports the Assisted Relocation Policy of Isle of Wight CCG, and is a guide for granting relocation expenses/travel support for newly recruited employees who are not resident on the Isle of Wight. 2. Eligibility 2.1 Assistance with relocation expenses may be granted to employees, irrespective of their previous employer, who take up appointment with the CCG, and are not Isle of Wight residents. 2.2 There is no automatic right to relocation expenses. 2.3 Employees must be joining the CCG on a substantive contract. 2.4 Provided the CCG is satisfied that the removal of the home is necessary, expenses will be paid at the discretion of the CCG. In exercising this discretion, the CCG will take full account of its Equal Opportunities Policy commitment, to prevent discrimination. 2.6 In place of relocation expenses, the CCG may agree to an employee remaining in residence off the Island and instead pay expenses in relation to travel to the Island. Note: in line with current HMRC guidance this benefit will be taxable and subject to NIC. 2.6 Assisted relocation expenses/travel will only be granted upon the employee signing an undertaking that they will not leave the employment of the CCG within a period of two years. Where an employee breaks the undertaking, they will be required to refund the whole of the expenses. 2.4 In line with HMRC guidance, for the CCG to exempt National Insurance Contributions and Income Tax from the relocation benefits paid the applicant must incur a change in their sole or main residence, as a result of starting the new employment. 2.8 It should be noted that should a change of permanent residence not take place, HMRC will seek to recover tax on any benefit that has been paid. 3. General Conditions 3.1 The reimbursement of relocation/travel expenses will only be approved where such agreement is essential to the post holder taking up appointment. This will ensure that assistance is available to those in genuine need. 3.2 The levels of assistance are set out in the Assisted Relocation Policy. 3.3 Applications for assisted relocation expenses must be made by the recruiting manager to the Chief Officer prior to offering employment to a candidate who will need assisted relocation. Managers should ensure that individuals wishing to claim relocation expenses receive a copy of the policy and procedure. 3.4 Applicants must disclose any other source of relocation assistance, including that paid to any other member of their household. The receipt of any other relocation assistance will affect the amount granted by the CCG. 6 P age

5 3.5 Arrangements must be reasonable i.e. expenses relating to the move should relate to a broadly comparable property. Where this is not the case the amount of assistance may be reduced. 3.6 Individuals are under an obligation to keep their expenses to a minimum and should obtain three quotes for any expenses they are claiming. Reimbursement will be based on the lowest quote. 3.7 Individuals must ensure that all claims are genuine and accurate and should not commit to any expenditure for which they expect to be reimbursed, without written approval in principle from their line manager. 3.8 Individuals must inform their line manager should their personal circumstances change, as this can affect their eligibility for relocation expenses i.e. be unable to sell their original property. 3.9 The CCG will only reimburse claimants. It will not make payments to any claimant s service providers direct Subject to the above, the CCG will approve appropriate expenses incurred as a result of relocating to the island. Appropriate expenses are defined in line with HM Revenue & Customs guidance for more information refer to Appendix Approval procedure 4.1 When a candidate is identified as suitable for relocation/travel assistance, a manager must gain approval to offer the relocation prior to offering to the candidate. Approval is sought from the Chief Officer using the Assisted Relocation Expenses Application (Appendix 2). 4.2 The level of assistance will be based upon the salary offered. 4.3 On appointment, or after offer but before the agreed start date, the prospective employee must be asked to complete the Assisted Relocation Expenses Application Form (appendix 2). In addition, a copy of the Assisted Relocation Policy will be sent to the employee, together with a letter for them to sign and return to confirm that they have read the policy. 4.4 The form will then be countersigned by the Chief Finance Officer, and retained by the Human Resources Service. A copy will be provided to the recruiting manager (for the employee s personal file) and the new employee so that they are aware of the date by which expense claims should be made under HMRC rules. 4.5 No expenses will be paid before the new employee joins the CCG. 4.6 Human resources will provide advice and guidance relating to the allocation of the assisted relocation policy and procedure. 5. Claims procedure 5.1 Claims are made using an expenses claim form and attaching original receipts. Completed forms should be: Signed by the claimant Signed by the claimant s line manager, to confirm reasonableness Approved by the Chief Finance Officer Sent to HR, for the Deputy Director to review for eligibility/compliance with HMRC guidance and sign off 7 P age

6 A copy of the expense claim form and receipts should be retained on the individual s personal file by their line manager. 5.2 Any Assisted Relocation costs incurred must be claimed within 3 months of expenditure. Line Managers must ensure that individuals are actively trying to complete the relocation in a timely manner and discuss any appropriate support that may be offered to assist this. 5.3 The Trust HR servicewill record all claims submitted to ensure that the funding agreed is not exceeded. Where funding is exceeded only claims to the level of funding agreed will be processed. Payroll deadlines will be adhered to, and late claims will be paid in the first available payroll. 5.4 Applicants must disclose any other source of relocation assistance relating to their property. The receipt of any other relocation assistance may affect the amount granted by the CCG, therefore, failure to disclose the receipt of other relocation assistance may result in the CCG withdrawing financial assistance. Under these circumstances, the CCG reserves the right to seek reimbursement of any assistance already paid. Funding used for relocation claims comes from the public purse and as such, consideration should be given to the suitability and reasonableness of claims. All claims are subject to the Public Sector Expenses Review Act Taxation 4.1 The CCG is guided by HMRC guidelines. A summary of current guidance is shown at Appendix 1, and this will be revised as necessary. Full details regarding HMRC guidelines can be found at 8 P age

7 Appendix 1 Types of expenses that may be claimed as part of assisted relocation NOTE this document is based on the information available from HM Revenue & Customs and it will be used to determine what can be claimed as part of Assisted Relocation from Isle of Wight CCG. The Isle of Wight CCG is totally committed to maintaining an honest, open and well intentioned culture and is therefore dedicated to the elimination of any fraud within the CCG. If Fraud or Corruption is suspected please report to the Local Counter Fraud Specialist or Director of Finance or ring the National Fraud and Corruption reporting line on Please refer to the organisations Fraud and Corruption Policy and Reporting Procedure for details. This action will ensure that the organisation is demonstrating every effort to Countering Fraud. Employers sometimes provide employees with assistance when they have to move home to take up a new job or when there is a change in the location of their existing job. Claims can include: a) Legal and professional fees including estate agents fees, solicitor s fees, surveys, stamp duty, land registry fees etc. b) Furniture removal, including insurance. For self-removal, vehicle hire costs and insurance can be claimed c) Disturbance allowance an allowance may be payable towards: Temporary cost of living in lodgings and maintaining a separate home; Excess travelling from current home to work, pending relocation; Travel home at weekends whilst in temporary accommodation, pending relocation. d) Expenses in old and new areas at the same time travel expenses in connection with the search for accommodation in the new area of employment will be reimbursed for up to two visits. e) Travel from the mainland to the Isle of Wight. Note: where travel and other associated costs (eg parking, hotel) are agreed instead of relocation the benefit will be taxable and subject to National Insurance Contributions (in line with the HMRC guidance) There is an exemption that removes tax and NICs liability on certain removal expenses and benefits up to a limit of 8,000. The conditions that must be met to qualify for this exemption fall into three main categories: Conditions relating to the change of job and home Conditions relating to the type of expense or benefit Time limit 9 P age

8 1. Conditions relating to the change of job and home. The conditions are: The employee must change his or her sole main residence. The employee must move home because of: o Taking up a new job with a new employer, or o Taking up new duties with the existing employer, or o Continuing the current job at a new location. The employee s existing home must NOT be within reasonable daily travelling distance of the new workplace The employee s new home must be within reasonable daily travelling distance of the new workplace. 2. Conditions relating to the type of expense or benefit The exemption for relocation expenses and benefits applies only to certain types of expense or benefit. These are: Disposal or intended disposal or old residence, including: - Legal fees & services - Estate agent fees - Advertising - Disconnecting utilities, including phones - Loan redemption costs - Rent, insurance, maintenance & security once the property is left empty & before you sell it Acquisition or intended acquisition of new residence, including: - Legal fees & services - Loan arrangement costs & mortgage indemnity premiums - Structural surveys & valuations - Stamp duty & land registry fees - Connection fees for utilities, including phones Transporting belongings: - Packing & unpacking - Temporary storage - Insurance to cover transit/storage - Removing & re-fitting domestic goods - Moving ordinary domestic pets Travelling and subsistence for (see website for further examples): - Family visits to the new location - Family travel for the move itself - Travel and accommodation for any temporary commute if you cannot relocate before starting work Domestic goods for the new residence (e.g. carpets, curtains, cookers), where existing ones would not be suitable Interest payments on some bridging loans (see website for more details) Some costs of relocating do not qualify for the tax exemption: Interest payments for the mortgage on an existing home Re-direction of mail Council Tax bills 10 P age

9 Purchase of new school uniforms for employee s children Compensation for losses, such as: - Having to give up a part-used season ticket - Cost of joining a new sports or social club - Penalty for giving insufficient notice of a child s withdrawal from school 3. Time limits Where travel expenses have been agreed in lieu of relocation expenses, under current HMRC guidance they are not exempt from NIC or tax. The time limit for the exemption for relocation expenses and benefits applies for tax and for Class 1A NICs liability but not to Class 1 NICs. The relocation expenses must be incurred, or the relocation benefits provided, before the end of the tax year following the one in which the employee starts the new job. As long as the employee actually moves home the date on which the removal takes place does not matter: the time limit must be satisfied for each expense incurred or benefit provided before the deadline. In certain circumstances, HMRC may be able to extend the time limit. To extend the time limit an approach must be made to HMRC 4. The 8,000 tax free limit If the conditions relating to change of job and home are met there is an upper limit on the amount that is free of tax and NICs. In calculating whether the upper limit has been breached the amount to take into account for each benefit or expense is the amount that is taxable or liable for NICs. 5. Tax The first 8,000 of expenses paid and benefits is free of tax. This limit applies once for the whole relocation, so if assistance is provided over more than one tax year the amount of the tax free limit available in the second year is reduced by the value of relocation expenses and benefits that were provided in the first year. For example, if the employee gets 6,000 worth of relocation expenses and benefits in the first year, the maximum that can be provided free of tax in the second year is 2, National Insurance Contributions There is no upper limit on the amount of exempt expenses and benefits that are free of Class 1 National Insurance Contributions (NICs). But the 8,000 limit applies for Class 1A NICs purposes in the same way as for tax purposes. This means that any relocation benefits or expenses paid for a relocation which exceed 8,000 are liable for Class 1A NICs. More guidance on this is available at Note: Where tax and NIC exemption has been applied in anticipation of relocation and no relocation occurs, HMRC can claim it back. 11 P age

10 Appendix 2 Assisted Relocation Expenses Application PART A Manager s Application Please give details of the offer made: Date of Interview Name of candidate Post offered Band Starting salary Anticipated start date Is this a permanent contract? Manager s Signature... Date.. Name Department. PART B Chief Officer Approval to offer Assisted Relocation Level of Assistance to be offered Up to Signed..... Date.. Name: Chief Officer PART C Employees Application (to be completed by new employee) Please give these personal details: Family Name: First Name: Title: What date did you start working with the CCG? 12 P age

11 Address for correspondence: Where are you moving from? (please provide your current home address) What relocation arrangements do you propose? To sell my home in the old area and purchase in the new area To leave rented accommodation in the old area and to purchase in the new area To rent accommodation on the island in the first instance with a commitment to purchase To buy an owner-occupied home on the island To leave rented accommodation in the old area and to rent accommodation locally To commute from the mainland to the Island Is your appointment fixed term? YES / NO If YES please state when your employment is due to end: PART D Final confirmation. After completion a copy of this form will be sent to the recruiting manager, new employee, HR and CCG Finance Team Assisted Relocation approved up to..... (based on starting salary) This Assisted Relocation should be completed by 5 April 20 Signed: Dated :. Name:. Chief Finance Officer: 13 P age

12 Appendix 3 Removal Expenses Summary & Checklist for Claims Notes Provision Cost 1 Removal of furniture and effects to temporary accommodation 1A Removal of furniture and effects to permanent accommodation 2 Storage of furniture and effects 3 Legal etc. expenses on permanent house purchase/rental 4 Bridging Loan interest reimbursement 5 Legal etc. expenses on house sale/ending lease 6 House Agents or Auctioneers Fees 7 Tenancy/arrangement costs for interim accommodation * 8 Visits for accommodation search 9 Family travel to move 10 Continuing commitments allowance * 11 Travel for mainland commute (by agreement) Total Claim * One or the other of these - not both Approval: Line Manager Name: Signature: Date: Deputy HR Director: Name: Signature: Date: Chief Finance Officer: Name: Signature: Date: 14 P age

13 I, the under signed, certify that these expenses, for which I enclose all relevant documentation, were actually and necessarily incurred and are in accordance with the CCG s Assisted Relocation policy and procedure. Claimant Signature: Date: Notes: 1 1A Actual cost of removal of possessions to temporary accommodation while seeking a property to purchase/rent (three quotes of cost necessary) Actual cost of removal of possessions to permanent accommodation (three quotes of cost necessary) 2 Temporary (essential) storage due to moving into interim accommodation 3 Legal Fees associated with permanent house purchase/rental 4 Bridging Loans interest is only reimbursed in exceptional circumstances and for a timed limited period 5 Legal Fees encountered with house sale/ending lease 6 House Agents Fees (at standard rates) associated with the Sale of a house or entering into/ending lease 7 The rent of interim accommodation while waiting to move into permanent home, agreed for a specific time scale. Reviewed quarterly. 8 Preliminary return visits to find new home, research area (2 visits) 9 Cost of personal and family travel to move 10 Negotiated allowance towards the initial rental cost associated with living away from family prior to moving into interim or permanent home i.e. where temporarily maintaining two house-holds. May include excess mileage (recorded in 11). 11 Travel from the mainland in lieu of relocation (by agreement of the Chief Officer) When you are ready to submit your claim for re-imbursement (via the CCG Travel & Subsistence Allowance Form, with original receipts attached), please attach this form to the front and forward to your line manager. Your line manager will send the approved forms to Chief Finance Officer for their approval and then the Head of HR (IW NHS Trust) for checking against the CCG Policy and HMRC guidance, who will submit them to payroll. 15 P age