| HR & EMPLOYMENT LAW
Jackie le Poidevin, Editor-in-Chief, HR Adviser |
Summer Holidays and Covid-19: 4 Key Issues
Thanks to travel corridors and the reopening of UK holiday accommodation, at least some employees who have booked a summer holiday will now be able to go ahead with their travel plans. Here, we set out 4 things that you can and can’t do if an employee has a holiday planned.
- Can We Furlough Staff Just for the Holiday Period?
You may have brought someone back off furlough who is now about to go off on their 1- or 2-week summer holiday. Under the flexible furlough scheme, you’re no longer limited to furloughing employees for a minimum of 3 weeks. So, can you furlough the person again for the holiday period and recoup 80% of their holiday pay through the Coronavirus Job Retention Scheme (CJRS)?The government guidance on the scheme makes clear that you can’t. It states that, ‘employees should not be placed on furlough for a period simply because they are on holiday for that period’.If you do this, there’s a risk HMRC will claw back the relevant part of the furlough grant and impose a penalty for breach of the CJRS. - Can Staff Already on Furlough Take a Holiday?
Now let’s imagine someone is still on full-time furlough and has a holiday booked. This won’t get you into trouble with HMRC – the holiday doesn’t bring the furlough period to an end and you can keep claiming your furlough grant. However, you should top up the employee’s pay to 100% during the holiday period. - How Do We Treat Holidays During Flexible Furlough?
As in point 1, you shouldn’t deliberately time an employee’s furlough leave to coincide with their holiday. However, what do you do if they’re working a particular pattern and part of their holiday falls during a period when they would have been working and part of it falls during a period when they would have been on furlough?In this case, HMRC says that, ‘any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours’. So, you can claim the furlough grant for the whole of the holiday – remembering to top up the employee’s wages so that they receive their normal pay.
- Do We Have to Pay Employees During Quarantine?
It is now possible to travel back to the UK from more than 50 countries without having to quarantine. However, people returning from certain destinations, including Portugal and Sweden, still have to self-isolate for 14 days. People may also have to quarantine if a country they’re visiting is removed from the travel-corridor list due to an outbreak. Serbia was already removed from the list used by England, Wales and Northern Ireland on 11 July due to a dramatic rise in coronavirus cases. Scotland has drawn up its own nearly identical list of travel corridors but, importantly, this excludes Spain – a decision due to be reviewed on 20 July.You don’t have to pay sick pay during quarantine as you would if an employee was self-isolating for another reason. You might allow the employee to work from home if they can, or suggest they take the time as additional annual leave, if they have any entitlement remaining. Otherwise, you might treat the time as unpaid leave.
| PAYROLL
Sarah Bradford, Editor-in-Chief, Pay & Benefits Adviser |
Are COVID-19 Tests and Provision of PPE a Taxable Benefit?
As a result of the pandemic, employers may provide employees with coronavirus tests and/or personal protective equipment. Where these are provided is there a tax charge and should they be reported on the employee’s P11D?
Coronavirus Tests
There has been some confusion over the past week or so as to whether the provision of Coronavirus (COVID-19) tests for employees constitutes a taxable benefit or not. Guidance initially published by HMRC suggested this to be the case, but the guidance was withdrawn following something of an outcry, with the Government promising to look at the situation.
Revised guidance was published on 9 July 2020 and this was the latest guidance available at the time of writing.
Where Coronavirus tests are provided by the Government as part of their national testing scheme, the guidance confirms that these tests are not treated as a benefit in kind for tax purposes. Employers employing healthcare workers and other eligible front-line staff who take a test through the Government’s testing programme do not need to report this to HMRC on the employee’s P11D as no tax is due.
The revised guidance also confirms that where antigen testing kits are provided to employees outside of the Government’s national testing scheme, no tax or Class 1A National Insurance will be due. This will be the case where the employer either provides the tests directly, or purchases tests that are carried out by a third party. As no tax and National Insurance is due, the provision of the tests does not need to be reported on the employee’s P11D.
The Government is to introduce legislation to provide for a statutory tax exemption.
Personal Protective Equipment
Employees working in a situation where the risk of Coronavirus transmission is high may require personal protective equipment (PPE). Where an employer’s risk assessment shows that PPE is required, the employer must provide this to the employee free of charge. By law, any PPE provided must fit properly. The provision of PPE does not give rise to a tax benefit – it is provided to the employee to enable them to perform the duties of their employment. In their guidance on the tax treatment of expenses and benefit provided to employees during the Coronavirus outbreak, HMRC confirm that no tax charge arises where PPE is required.
If an employee requires PPE to undertake their job, but the employer is unable to provide it, the employer should reimburse employees who purchase the PPE themselves. HMRC confirm in their guidance that the reimbursement of the PPE is not taxable.
However, the guidance states that employees cannot claim tax relief on the expenses from HMRC. The test of deductibility is whether the expense is wholly, necessarily and exclusively incurred in performing the duties of the employment. If this test is met and the expense is revenue in nature, a deduction should be permitted where the employee meets the cost of PPE but this is not reimbursed by the employer. HMRC’s Employment Income Manual at EIM32480 confirms that a deduction can be claimed for the upkeep and repair of protective clothing where the duties of the job require it to be worn.
Where the employer provides the employee with PPE which is not required for them to do their job, the tax position is different. Where the equipment provided is not essential, it will trigger a taxable benefit charge. This would be the case, for example, if an employer provides employees with complimentary face masks following the announcement that these are to be compulsory for shoppers from 24 July 2020, even if the employee opts to wear the mask to work. However, where the cost is less than £50, the provision will fall within the scope of the trivial benefits exemption, and can be provided tax-free. Likewise, the employee is not allowed a deduction if they purchase PPE which is not essential for them to do their job. Where the PPE forms part of a uniform, no tax charge arises.
| HEALTH & SAFETY
Paul Smith, Editor-in-Chief, Health & Safety Adviser |
The New Normal: Time to Focus on Mental Health
The Covid-19 crisis has imposed exceptional burdens on the workers on whom we depend to take our organisations into the future. What should we as employers and managers be doing to enable them to perform at their best?
It was a problem before…
Wind the clock back to the pre-coronavirus world and organisations such as the Chartered Institute of Personnel and Development (CIPD) were already warning of the immense risk poor mental health poses to employees and employers alike. At the same time, campaigners such as former MP Sir Norman Lamb were highlighting the problems the NHS faces in providing treatment for sufferers, with people facing months and sometimes years of waiting just for an initial consultation with someone who might be able to help.
Switch the focus to our managers and supervisors and you may well find they are uncomfortable dealing with health issues (which are often less straightforward than safety problems). And, of all the health issues, mental ill-health is the one where they are most likely to struggle unless we give them clear guidance on what we expect them to do.
Coronavirus has made things worse…
Covid-19 has made the problem more serious and the answers more difficult: it has not only put more pressure on people, but has also taken away their support mechanisms – for example, sport, hobbies and social contact. Some will have had to cope with health vulnerability, illness or even bereavement. All have had to adjust to new ways of working, and many will have been worried by threats such as debt, redundancy – and of course Covid-19 itself.
On top of this, there are disturbing reports that lockdown has triggered a huge rise in domestic violence, with calls to Refuge’s National Domestic Abuse Helpline increasing by 50% after three weeks of lockdown, and the Metropolitan Police reporting more than 100 arrests per day. This is, of course, beyond the normal scope of health and safety at work (it is not a hazard that lies within employers’ control). The fact remains, though, you may well have victims in your workforce – or perpetrators.
So, what actions can we take to minimise the mental ill-health risk? Here are 5 action points to get you started:
- Find out if you have a problem: Talk to people about their concerns then identify how much of your current sickness is due to mental health issues. For a quick metric of what poor mental health could be costing you, take your sickness absence rate, adjust it to exclude absence due to other causes, then multiply by your payroll cost.
- Get Help: Tap into free resources available from bodies such as Mind (https://tinyurl.com/ydfapbh6), Time for Change (https://tinyurl.com/y5atbn43) and the Institute of Directors (https://tinyurl.com/zhvhaga).
- Commit to action: Join companies such as Tesco, British Gas and Shell by signing the ‘Time to Change’ pledge to end the stigma of mental ill-health (sign up at https://tinyurl.com/huwzbqh).
- Include mental health in your health and safety management: It’s clear from case law that workplace stress lies squarely within an employer’s responsibilities. It follows that mental health should feature in your safety policies, systems and assessments, along with planned action to minimise the risk.
- Point concerned employees to someone who can help: This could be a team leader (although many prefer to talk to someone other than their manager), a trained mental health first aider, a confidential employee helpline or a combination of all three. Also consider setting up informal (socially-distanced!) groups for exercise in the fresh air, or for just making new friends.