UK Payroll in the News


Payroll departments endeavour to pay staff accurately and on time as that is the main function of the payroll department and the one by which we are judged.  So, two recent cases of paying staff inaccurately took the Global Payroll Association’s interest in the last week or so:

Renfrewshire Council

In an April 2019 report entitled “Safeguarding public money: are you getting it right?” the Accounts Commission and Audit Scotland highlighted that Renfrewshire council had overpaid over 800 current and former staff by £812,000 during the period April 2015 to February 2018.  An eighth of former employees were still paid by the council after leaving, usually because there was a delay advising the payroll department that someone had left.  

It was not until March 2018, after the audit, that the Council issued a Payroll Overpayment Process Guide detailing how overpayments should be recovered.  The following month, the payroll department also issued procedural guidance to managers on avoiding salary overpayments in the first place.

The April 2019 report says that by March 2018, a large proportion of the overpayments had not been recovered and £21,000 had been written off.

WH Smith

In March 2019, over 10,000 current and ex-employees of WH Smith received letters out of the blue and payments totalling £40 on average per person.  The reason for these unexpected payments is WH Smith unwittingly misinterpreting HMRC guidelines on national minimum wage and the interaction with its own uniform policy.

WH Smith employees were asked to wear blue of black trousers or skirts and shoes and these were not provided by the company.  Something that has been highlighted by a number of HMRC compliance audits is that if the company requires employees / workers to wear specific clothes for their work, this is counted as a reduction to their pay for national minimum wage purposes.  This is regardless of whether the company provides the uniform and deducts the cost from pay or requires the individual to purchase it at their own cost (as is the case with WHSmiths).

The letters started:

“Following a review with HMRC it came to light that our interpretation of uniform regulations was different to that of HMRC.  We now understand that by asking you to wear trousers, skirts or shoes in either black or dark blue means that the Company has to cover some or all of the costs depending on your rate of pay”

WH Smith is not alone in “falling foul” of this and as well as making the payments it has apologised to staff and ex-staff.  So the Global Payroll Association would like to point readers to the specific section in HMRC’s manual that covers this.

Comment

Paying people accurately and on time is the number 1 goal but is not always easy.  Increased compliance confusion and mistakes make our lives complex, yet payroll remains an unappreciated profession.

The main point we have gleaned from the cases are that companies need to pay more heed to the purpose of the payroll department in the first place – paying accurately and on time.

Plus, the two cases we have talked about in this article serve as proof that payroll is undeservedly unrecognised in the United Kingdom and indeed worldwide.