Two Years Later...
- By Jo Marshall
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- 26 Jan, 2018
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Intoduction
In April 2018, Yorkshire Payroll Services Ltd will celebrate it’s second anniversary!
Its been a busy two years, delivering payroll training including expenses and benefits, pensions, gender pay gap reporting to name but a few, to delegates up and down the UK. The difficulties have been keeping up with the changes in legislation, in the last two years alone, we’ve had; statutory exemptions, trivial benefits, apprenticeship levy, gender pay gap reporting, re-enrolment, national minimum wage, holiday pay calculations, the list goes on…
Following the third Finance Act 2017-19, last year, we hopefully have a chance to catch our breath and digest what we need to do moving forward (well, only until Brexit has finished!).
What I have learnt over the last two years, is the average person isn’t aware of how their pay is calculated, what the purpose of their tax code is, what their statutory rights are, what tax relief they are entitled to. Most haven’t opened their Personal Tax Account yet, even though HMRC have created an app that you can download onto your phone.
Based on this, I’d like to start sharing some of the knowledge I have gained over the years to help everyone to start to understand all this payroll jargon. If there is anything in particular you would like me to explain, please message me and I’ll create a post with the explanation.
Thanks for reading!
Jo Marshall
Yorkshire Payroll Services Ltd
26th January 2018
I was scrolling through Twitter this morning when I spotted the front page of the Financial Times. The headline reads “Sorrell feels the strain as WPP is ‘walloped’ by ad spending cuts”.
The reason this caught my attention, was I’d recently presented the CIPP Payroll and HR Legislation Update course in Leeds and a section of the presentation relates to “CEO pay ratios reporting”.
Apparently, according to the House of Commons Library, Martin Sorrell, the CEO of WPP, was the best paid CEO in the UK. In 2016 he was paid £48,000,000!! Yes, 48 million pounds in one year, that’s 826 times more than the average pay of an employee. Believe it or not, his average is down when compared to the year before, in 2015 he was paid 1,336 times more than the average pay of an average employee.
The article can be found in the House of Commons Library. https://commonslibrary.parliament.uk/economy-business/work-incomes/pay-it-forward-the-meaning-of-company-pay-ratios/
The high levels of executive payments have been subject to general debates for many years, but the government has now expressed concerns as the rate of the increases, certainly over the last two decades, in executive payments when compared to pay generally. So, the government is now starting to act. In August 2017, the government announced new reforms which include:
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Financial Reporting Council (FRC) to revise UK Corporate Governance Code
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Require *quoted companies to explain executive remuneration in context of wider pay
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New legislation to require annual reporting of ratio of CEO pay to average UK employee, with narrative
*Quoted companies are those listed on the Main Market of the London Stock Exchange.
In December 2017 FRC released its consultation document on reforms. http://frc.org.uk/getattachment/31897789-cef6-48bb-aea9-f46b8cf80d02/Proposed-Revisions-to-the-UK-Corporate-Governance-Code-Dec-2017-1.pdf
Interestingly, Richard Howson, CEO of Carillion, was paid £1.5 million pounds in 2016, he’s a local lad too, lives in Skipton according to The Construction Index website.
Thanks for reading!
Jo Marshall
Yorkshire Payroll Services Ltd
I’ve seen a few entries on Facebook where people have stated they are working 13 hour shifts, or are missing the football match again because they were working overtime on a Saturday.
Did you know, the national minimum wage for people over 25 is £7.50 per hour, it increases to £7.83 in April 2018. If your pay falls below this amount, your employer must top up your pay. For example, if you work over and don’t get paid for that time, or you are asked to come into work before your shift officially starts, or to stay behind to go through security checks, these hours are all included in national minimum wage calculation. It is these areas that Argos neglected to include in their employees pay, Ryan Air are the next to face investigation.
Holiday pay. If you do work overtime on a regular basis and you are paid for the extra hours you work, your employer should be including the average overtime you have been paid into your holiday pay. For example, your normal salary is for working Monday to Friday, but you regularly work on a Saturday and are paid for those extra hours. When you go on holiday, if you are only paid for the normal Monday to Friday hours, you are receiving less pay than you normally would. From a legal point of view, you are therefore being deterred from taking your holiday leave entitlement.
Because of this, recent legal cases have highlighted this fact and in general, workers should receive the same pay while they are on annual leave as they normally receive while they are at work. They should not be deterred from taking leave because they are paid less while they are on leave.
For those people who receive Commission payments, recent cases have confirmed that Commission payments should also be included in the holiday pay calculation. We are now waiting for the calculation method to be confirmed; e.g. average over the last 12 weeks, last 52 weeks etc.
Watch this space, if Commission payments are to be included in the holiday pay calculation, what could be next??
Thanks for reading!
Jo Marshall
Yorkshire Payroll Services Ltd
