| HR & EMPLOYMENT LAW
Jackie Le Poidevin, Editor-in-Chief, HR Adviser |
Get Ready for Important Changes to Right-to-Work Checks
From 6 April, new rules will apply on checking that prospective employees have the right to work in the UK. If you follow the wrong process and it then emerges that any employees don’t have the right to work for you, you could face a fine of up to £20,000 per worker. It’s therefore important to prepare for the changes.
What’s Changing?
This change only affects checks on holders of a biometric residence permit (BRP), biometric residence card (BRC) or frontier worker permit (FWP). Currently, job applicants with one of these documents can choose to prove their right to work for you either by showing you their physical document or agreeing to let you use the Home Office online checking service.
Before 6 April, you must not insist on using the online service. After this date, though, you must carry out the check online. Even if the person has a valid BRP, BRC or FWP, making a copy of the physical document will not be acceptable as evidence of their right to work.
How to Carry Out the Check
From 6 April, you must:
- Ask for the person’s date of birth and a share code that they can generate via the online service. The share code is valid for 30 days.
- Put the code into the online checking service and follow the instructions.
- Make a copy of the profile page that confirms the person’s right to work. This will show their photo and the date on which you carried out the check. You can either print the page out or save it as an electronic file.
- Retain the document securely for the duration of the person’s employment and for 2 years
Checks for Existing Employees
You don’t need to carry out retrospective online checks on employees whose physical documents you checked before 6 April 2022.
What You Should Do Now
You should now:
- Familiarise yourself with the latest version of the government’s guide to right-to-work
- Train managers who carry out right-to-work checks in how to use the online service, what checks and documents are acceptable as evidence and how to store this evidence.
- Update your policies and procedures on carrying out right-to-work checks.
- Consider inviting (but not forcing) job applicants who hold a BRP, BRC or FWP to let you carry out an online check on them. This will help to get managers used to the new process. Also, you can only confirm that an EU national has settled or pre-settled status by using the online tool. You can’t see this by looking at their paper document, so an online check is safer.
What About the Covid Adjusted Process?
During the pandemic, employers have been permitted to check physical right-to-work documents remotely without meeting the person. This adjusted process is due to finish on 5 April.
An online tool is being developed that will allow you – for a fee – to verify British and Irish passports (or other paper right-to-work documents) remotely. The person will upload the document and you won’t have to see the physical version. Alternatively, you can check the original document in the old-fashioned way (thereby avoiding the fee). But you won’t be allowed to accept a scanned copy as you’ve been able to do during the pandemic.
However, the technology may not be ready by April so it’s possible the adjusted Covid procedure will get another temporary reprieve.
| HEALTH & SAFETY
Michael Ellerby, Editorial Board Member, Health & Safety Adviser and Risk Assessment & Compliance |
5 Tips for the Successful Management of Asbestos
The HSE consider asbestos to be the single greatest cause of work-related deaths in the UK, currently responsible for the deaths of around 4,500 people a year in the UK. Many buildings that were constructed before 2000 contain asbestos as part of the build or as a result of refurbishment work. If you manage such a building, you must manage your asbestos. It can affect your workers and contractors working on your site. They may become seriously ill, potentially fatal, and you may face court action leading to substantial fines and imprisonment.
A Simple, Important Rule for Dealing with Asbestos
Don’t disturb the asbestos. Asbestos is only dangerous when it is disturbed. If it is safely managed and contained, then it does not (usually) present a health hazard. So think before you act – don’t remove asbestos unnecessarily as this may be more dangerous than leaving it in place and managing it.
Your 5 Tips for Managing Asbestos
As the person responsible for your business premises, you need to be aware of your duties under the Control of Asbestos Regulations 2012. Here are some simple steps that you can take:
- Know What Asbestos You Have and its Condition
Take reasonable steps to find out if there are any asbestos-containing materials present in your premises. If there is asbestos present, determine how much material, where it is, what type it is (such as asbestos insulating board [AIB], asbestos cement sheeting, lagging/insulation, etc.) and, importantly, what condition it is in. This allows you to share information with workers and contractors.
- Keep Accurate Records and Details
Develop a suitable record of the location and condition of the asbestos-containing materials (or materials which are presumed to contain asbestos), and keep this record up to date. People should be able to rely on this information to keep them safe while working on the premises.
- Know Which Areas Have and Have Not been Surveyed
Ensure that you clearly identify any areas that have not been accessed/surveyed. This is vital to prevent workers and contractors from assuming that non-assessed areas are safe to work on (drill, break into, etc.).
- Manage the Asbestos Risks for the Premises
Prepare a plan that sets out how the risks from these materials will be managed. This may include planned removal of known asbestos, encapsulation of asbestos containing materials, or regular checks on the condition of known/suspected asbestos materials.
Take the necessary steps to put your plan into action. Ensure that the plan is communicated to those who will be responsible for carrying out (such as by engaging competent contractors to remove or encapsulate the asbestos, or training people to carry out condition checks (with records) as agreed, appropriate intervals (such as every 6 months, etc.)
- Share Information
Provide information on the location and condition of any asbestos-containing materials to anyone who is liable to work on or disturb them.
Not Sure What to Do?
If in doubt, seek professional advice. This is too serious a matter to leave to chance. Consider talking to your health and safety consultant, your insurers, or other building risk specialists. You may need to commission a suitable asbestos survey and then act on the findings and the recommendations.
| PAYROLL
Sarah Bradford, Editor-in-Chief, Pay & Benefits Adviser |
New Case Shows Importance of Treating Overnight Allowances Correctly
A recent appeal to the First Tier Tribunal (FFT) highlights the importance of treating tax-free overnight allowances paid to lorry drivers correctly for payroll purposes. If you don’t get this right, you could end up paying back eyewatering sums to HMRC.
The case was Fieldmuir Ltd trading as Centurion Freight Services v HMRC [2021] TC8309. It revolved around the payment of overnight allowances by a company providing road haulage and transport services to drivers with a sleeper cab. The company also paid a fixed amount per night for incidental expenditure. The allowances, which were paid between 2010/11 and 2016/17 were within HMRC’s benchmark rates, and the company believed them to be tax-free.
However, the allowances were not set up correctly on the company’s payroll software, and the tax-free nature of the allowances was not reflected. As a result of the set-up error, the allowances were grossed up and PAYE and National Insurance contributions were deducted. The company believed that the lorry drivers had received the correct pay to which they were entitled.
Realising that they had overpaid PAYE, Fieldmuir wrote to HMRC in April 2018 requesting that the associated PAYE and National Insurance, which amounted to £220,662 be repaid.
The Judgement
However, HMRC disputed the claim, taking the view that the allowances were not tax-free overnight allowances; rather they were round-sum allowances. They reached this view because the overnight allowances were paid to the drivers 5 days a week for 52 weeks a year, regardless of whether the driver was working or on holiday, an irrespective of whether they worked full-time or part time.
As HMRC considered the allowances to be round-sum allowances, they were chargeable to tax as earnings and liable to Class 1 National Insurance contributions. HMRC also pointed out that an employer could not make a claim for overpayment relief in respect of PAYE and Class 1 National Insurance paid by an employee; the only claim that could be made was for employer’s National Insurance, which they would refute.
On September 2020, HMRC notified the company of their intention to issue decision letters for PAYE (under Regulation 80 of the PAYE regulations) and for National Insurance. The company appealed to the Tribunal on 8 October 2020, prior to the issue of any decision notices. HMRC applied for the appeal to be struck off as no appealable decision had yet been issued, and as such the appeal had no reasonable grounds of success.
The FTT struck out the part of the appeal relating to PAYE as they had no jurisdiction to hear it. However, they refused to strike out the appeal against NIC, which will be heard in due course.
Lessons for Business
This case highlights the importance of getting it right in the first place and the importance of understanding when the allowances could be paid tax-fee and of setting them up correctly on the payroll so that they are paid free of tax and National Insurance.
Employers can pay an overnight subsistence allowance to lorry drivers using the haulage industry scale rate where they have HMRC approval to do so. The figure for 2021/22 is £34.90 per night. Where the driver uses a sleeper cab, a lower tax-free allowance of 75% of the full amount (currently equal to £26.20) can be paid tax-free. A checking system should be in place to undertake periodic checks that the drivers are spending this amount on meals and subsistence and the payment is a reasonable estimate of the costs incurred.
By contrast, a round sum allowance is simply a sum of money given to employees to use to meet expenses. This is treated as earnings for PAYE (but the employee can claim a deduction for business expenses). For National Insurance purposes, the allowance less any amount used for business expenses is treated as earnings for National Insurance purposes.