Pay and Benefits

 

In a recent e-newsletter you asked for comments on whether employers felt that the employees blamed them for the recent bout of tax errors from HM Revenue & Customs (HMRC). In some cases they do, especially when the employee has been told by HMRC that their employer failed to notify them by way of completing a P46 at the start of their employment. Although HMRC is to dispense with the paper P46 I think that this is very short sighted, the P46 should be kept and improved.

 

Fortunately I was able to produce proof that I had followed correct P46 procedure. Where proof is given HMRC should waive the demand for lump sum payment, even if the sum is more than the £2,000 limit.

 

Sue Davies Accounts Supervisor/Payroll, An Oxford College

 

 

HMRC has not discontinued the use of the paper form P46. There are employers who may be exempt from online filing and who can still legitimately use paper forms. However, from April 2011 all employers not covered by an exemption are legally required to send their starter and leaver forms online.

 

In 2006, Lord Carter’s Report on HMRC’s online services made a number of recommendations, including that employers should file their starter and leaver forms (P45, P46 etc) online. 

 

From April 2010 large and medium-sized employers have been required to file in year forms online. From April 2011 small employers must also file their starter and leaver forms online.  

 

Doing it online is easy and convenient. As well as avoiding postal delays and costs, HMRC can process information much more quickly. This means that employee records and tax codes are updated faster, which in turn, helps make sure employees pay the right amount of tax.  

 

More information and guidance on submitting forms can be found here.

 

 

On the topic of introducing an employment tribunal fee; we frequently advise clients who are faced with the prospect of having to defend employment tribunal claims that are spurious or without merit. While there is a mechanism for asking employment tribunals, in circumstances where a claim is unlikely to succeed, to strike out the claim or require the claimant to pay a deposit of up to £500 as a condition of being allowed to continue, this often involves a disproportionately time consuming and costly procedure. It can also be rather “hit and miss”.

 

Many employers believe that a problem with the current system is that it does not do enough to discourage poor claims. Many claimants will be mindful of the fact that there is no tribunal charge when lodging a claim; they are unlikely to face the prospect of having to pay the costs of the employer if they lose; and they can generally withdraw at any time without being penalised. This can mean that some claimants approach tribunal litigation with the mindset that they have nothing to lose. They may also hope that by putting the employer to the time and cost of having to defend the claim, they will be offered a settlement by employers who would rather avoid the time and cost required to defend the claim.

 

The introduction of a refundable fee when bringing a tribunal complaint may go some way to discouraging speculative or spurious claims, as it addresses the “I have nothing to lose” mindset. However this, rightly, needs to be balanced against the risk that it will discourage genuine or well founded claims.

 

If a fee is to be introduced, the amount will be crucial, as will the application of any fee waivers and reductions – such as those which apply in the civil courts to enable access to court services free of charge or at a reduced rate in specific cases.

 

Provided a fee is set at the right level and fair exemptions apply, the introduction of a fee would be widely welcomed among employers and is unlikely to put off claimants with well founded or genuine complaints.

 

Charles Rae Senior Associate, Pinsent Masons LLP