Bank of America Merrill Lynch announced on 16 May a new initiative that supports women and men looking to return to work after time away to care for their family. Individuals who have been absent from the workplace for three or more years are being offered the opportunity to benefit from BofA Merrill’s ‘Returning Talent’ programme.

Michelle Fullerton, head of Diversity and Inclusion for Europe and Emerging Markets (ex-Asia) at BofA Merrill, who is spearheading the initiative, says, “As an employer of choice and recognised as one of The Times’ Top 50 Employers for Women, we are keen to ensure we attract, retain, and develop talented individuals. We recognise that choosing to have a family is a very important stage in a person’s life, and that some decide to take time away from work to focus completely on caring for their family.”

During the inaugural year of the programme, 20 places are available for individuals to participate in three, one day workshops (scheduled around childcare), executive coaching, and access to employees and experts from BofA Merrill. At the end of the programme, it is anticipated that participants will feel better prepared and confident to re-enter the world of work, either at BofA Merrill or at another organisation.

‘Returning Talent’ is being delivered in partnership with the Executive Coaching Consultancy – the company that currently delivers maternity coaching workshops and individual coaching sessions to the bank’s employees and their managers – and the Mumsnet Family Friendly programme which develops and promotes family-friendly practices in business. The workshops will take place in June 2012 at the bank’s London offices. Interested parties are asked to complete an application form which can be accessed online. Successful applicants will be notified by 6 June.

Fullerton concluded, “Above all, our company is about people. A philosophy of inclusion drives us every day and helps us all to succeed in a diverse, global marketplace. Through ‘Returning Talent’, we are demonstrating that Bank of America Merrill Lynch is an attractive organisation for prospective employees and clients – a place where people want to work.”

The Court of Justice of the European Union reiterates that an employee who has been unable to take annual leave due to incapacity must be allowed to carry their untaken leave forward into a new leave year. However, employee’s do not have an unlimited time in which they can do this.

In this case (Neidel v Stadt Frankfurt Am Main (Case: C337-10)), Mr Neidel worked as a fireman. In June 2007, he went sick and didn’t return to work again before his retirement at the end of August 2009. Mr Neidel’s statutory holiday entitlement in each of the years from 2007 to 2009 was 26 days. In addition, firemen in Germany are entitled to compensatory leave for public holidays.

 Furthermore, according to the applicable German legislation, Mr Neidel had, as a general rule, to take his leave within the leave year. By arrangement untaken leave could be carried forward into the following leave year but was forfeited if it had not been commenced within a period of nine months after the end of the leave year.

At the time of his retirement, under the legislation applicable to a termination of employment, Mr Neidel claimed he was owed a payment in lieu covering 86 days’ untaken statutory leave.

The EC Working Time Directive requires that Member States must provide for workers to take a minimum period of four weeks’ annual statutory leave. This equates to 20 days for someone working a five-day week. The German leave provisions provided for a more generous period of statutory leave. The Directive also states that, under normal circumstances, any untaken leave cannot be carried forward to a following leave year. Also untaken leave can never be paid in lieu except at the time of termination.

But what has the Court decided in the case of someone who is long-term sick and cannot take all the leave they are entitled to during a particular leave year? In this case, the employee is allowed to carry forward untaken statutory leave into a following leave year and to be paid in lieu of that untaken leave if they do not return to work before any of that untaken leave can be taken.

However, there are two important principles: (1) An employer cannot limit an employee’s right to an entitlement to four weeks’ annual leave being carried forward in the case of sickness, or paid in lieu at the time of termination. (2) An employer does not have to allow the same provisions in relation to any additional statutory leave over and above that required by the Directive. It will be a matter for domestic legislation to decide.

When it comes to the time limit over which untaken statutory leave, as per the Directive, can be carried forward, “the Court takes the view that any carry-over period must ensure that the worker can have, if need be, rest periods that may be staggered, planned in advance, and available in the longer term, and must be substantially longer than the reference period in respect of which it is granted. In the proceedings in question, the carry-over period laid down is nine months, that is to say a period shorter than the reference period (in this case, one year).”

In other words, in the Court’s view a nine-month carry over period was inadequate under the circumstances of the case in question. However, the Court did not go as far as saying what would have been an adequate carry over period, although all the indications are that this would seem to be longer than a leave year.

Therefore, it remains to be seen whether, for example, it would be acceptable that untaken leave for a leave year ending 31 December 2012 must be commenced by 31 March 2014. The key question is: “Would a carry over period of 15 months be acceptable as being ‘substantially longer’ than a leave year? Or would an even longer carry over period be required, perhaps as long as 18 months?”

The UK Government have promised, in due course, to amend UK law implementing the Working Time Directive to deal with issues such as untaken leave due to ill-health.

The Chartered Institute of Payroll Professionals (CIPP) has made its members aware of a new online web address for employers wishing to refer to, or download, the handbook Attachment Orders – A guide for employers, published by HM Courts Services.

Dealing with the various types of attachment of orders (‘arrestments’ in Scotland) and deduction from earnings orders is not a straightforward task. It’s not a matter that all employers regularly have to deal with. So it’s useful to know there’s an official source of guidance if you get faced with dealing with an Order for the first time.

HMRC have decided that, from 6 April 2011 onwards, certain security enhancements fitted to cars made available for private use will not be treated as accessories bumping up the car’s list price for taxation purposes.

Why are HMRC making this change? Because this new measure “supports the Government’s objective of a fair tax system by ensuring that individuals who are provided with security enhanced cars due to the nature of their employment are not unfairly impacted by the abolition [since 6 April 2011] of the £80,000 cap on the cash equivalent of the benefit.” Gives you a nice, warm, fuzzy feeling inside to think HMRC is so caring of the wealthy and their company cars. Although, they admit that this new measure will only affect up to 100 company car drivers in the UK.

Anyway pushing all jealous thoughts to one side, what will the change mean for those chosen few?

The cash equivalent value of a car made available for private use is based on the car’s list price which includes all the car’s qualifying accessories. So, not only might the list price be high to begin with, but by the time you load it with the value of the accessories fitted to the car, it bumps up the value even more. Before the change announced above, a car’s security enhancements increased its list price.

From 6 April 2011, where an individual can demonstrate that the nature of their employment creates a threat to their personal security, then the following security enhancements will not be treated as part of the car’s list price:

• armour designed to protect the car’s occupants from explosions or gunfire;
• bullet-resistant glass;
• any modifications to the car’s fuel tank designed to protect the tank’s contents from explosions or gunfire (including by making the tank self-sealing); and,
• any modification made to the car in consequence of anything which is a relevant security feature by virtue of the proceeding three examples.

From 1 May 2012, there is a change in the period during which a new employee, or a returning employee, cannot get SSP from their employer if they’ve been a recent recipient of the Employment and Support Allowance (ESA).

Pre 1 May 2012, where an employee started a new job, or returned to work, after getting the ESA from Jobcentre Plus or the Social Security Agency, and who went sick within 104 weeks of their starting/returning they could not get SSP from their employer. They would be given a form SSP1 and the employee would go back on to the ESA during their incapacity. From 1 May 2012, this period on non-entitlement has been cut from 104 to 12 weeks, as per the latest online version of Helpbook E14, and will affect any employee starting/returning on or after this date.

An employer should have a policy of always asking new or returning employees as to whether they have a linking letter (ESA220 or similar) detailing the last payment of the ESA. Or, the employer should check with the Jobcentre Plus, or in Northern Ireland with the Jobs and Benefits Office, to see if the employee has any ESA entitlement.

HMRC have updated its online listing of payroll software products that have been found by them as being able to:

• file a valid RTI form – Full Payment Submission (FPS), Employer Payment Summary (EPS), Employer Alignment Submission (EAS); and NINO (National Insurance number) Verification Request (NVR);
• retrieve National Insurance number verifications online.

The HMRC listing of products is qualified by the statement: “Employers who want to buy software which has RTI Recognition indicated by ‘payroll values checked’, should note that HMRC basic payroll tests do not include every possible payroll function and that contact would have to be made by the employer with the Software Developer to ensure that the software product contained all the payroll functionality that the business required. Employers would have to establish how easy a product or service would         be to use or what it costs.”

Note: HMRC does not recommend or endorse any one product or service over another.

HMRC have confirmed that a further 310 employer schemes will join the Real Time Information (RTI) pilot following its launch in April.

HMRC have published the first issue of ‘The Employment-Related Shares & Securities   Bulletin’. Issue No. 1 is dated May 2012. The Bulletin will provide information and updates on developments relating to employment-related securities, including the tax-advantaged employee share schemes.

 Further issues of the Bulletin will be published as and when sufficient articles or updates are available, or when HMRC have an item they want to alert taxpayers to quickly. HMRC welcome any suggestions for future articles although they cannot guarantee publication.

From 1 May 2012, the Scotland Act 2012 gives the Scottish Parliament the powers to introduce, from 6 April 2016, a Scottish rate of income tax to affect all Scottish taxpayers.

It’s proposed that for Scottish taxpayers, the rate of UK income tax will be cut by 10%. The Scottish Parliament will then have the powers to set their own rate of income tax. This could result in rates of income tax for Scottish taxpayers ending up equal to, lower, or higher than rates paid by taxpayers in England, Wales, or Northern Ireland.

For example, if the Scottish Parliament were to keep the Scottish rate of income tax at 10% it means that Scottish taxpayers will overall pay income tax at the same rates as everyone else in England, Wales, and Northern Ireland. However, if the Scottish Parliament chose to set their rate of tax at 8%, then Scottish taxpayers would pay tax at 18%, 38%, and 43% (if the additional rate of income tax is still cut to 45% from 6 April 2013). If they set a rate of 12%, Scottish taxpayers would pay income tax at 22%, 42%, and 47%.

How is a “Scottish taxpayer” defined? Section 80D of the Scotland Act 2012 defines a “Scottish taxpayer” as someone who has a “close connection with Scotland” (very much dependant on where your main residence is and how much time you spend there and in Scotland each year). If you’re a member of Parliament for a constituency in Scotland and/or a member of the Scottish Parliament, you’re automatically a “Scottish taxpayer” wherever you actually live.

HMRC states: “Broadly, if you live in Scotland you are a Scottish taxpayer. Scottish people living outside of Scotland are not Scottish taxpayers. Non-Scottish UK residents living in Scotland are.”

The above definition and comment doesn’t go far enough in answering the obvious questions about have a “close connection” with Scotland. You can imagine how “Scottish taxpayers” will seek to drop their “Scottishness” if Scottish tax rates end up higher than in the rest of the UK! HMRC state: “We shall be issuing more guidance about [defining Scottish taxpayers] nearer the time. We shall also be writing to those on our computer systems who appear to be Scottish taxpayers. If you pay tax through PAYE, HMRC will tell your employer whether to treat you as a Scottish taxpayer.”

Employees who are identified as “Scottish taxpayers” will be issued with special PAYE tax codes – all “Scottish” tax codes will be prefixed with the letter “S”. For example, 810L would become S810L, K190 would become SK190. Scottish tax codes will start being issued by HMRC to employers during January/February 2016.

These changes could affect employers way south of the Scottish border. This is because, if you employ Scottish taxpayers you’ll have to apply Scottish tax rates even if you’re an employer who isn’t resident in Scotland. “All employers will have to operate the Scottish tax codes, so where your employer is based won’t affect the tax you pay.”

HMRC have published some frequently asked questions on the Scottish rate of income tax. They’re well worth having a look at.

Over the years, there have always been claims that particular cars should be treated as ‘vans’ for taxation purposes. There used to be a big difference between the cash equivalent value of a car made available for private use and a van made available for similar private use. Although the differences in cash equivalent values are not so great now, some employers/employees still think it’s worth trying to get a car treated as a van to save on income tax. This was illustrated in the First Tier Tax Tribunal case of Jones v Revenue & Customs [2012] UKFTT 265.

In this case, Mr Jones is a mobile technician for Jaguar Land Rover who, by reason of his employment, was supplied with a new Land Rover Discovery 4 2.7 TDV6 GS Auto. He objected to his Notice of Coding for the tax year 2011/12 which was determined by HMRC on the basis of information provided by his employer that, despite the Land Rover having been specially modified to carry engine components and tools for his job, the vehicle, which is available for his private use, was a car.

The entire boot area of the Land Rover was filled with racking and tool boxes which were bolted to the structure of the vehicle. In addition, although the rear seats and seat belt fittings were in place the seats were impossible to use as extra tool boxes had been securely fixed over them. Although it was technically possible for the tool boxes to be removed, he was not permitted to do so by his employer. There had also been modifications carried out to the vehicle including additional lighting, electrics, and special control systems.

You can see why Mr Jones was desirous of the vehicle being treated as a van from the fact that having the vehicle deemed a car was costing him nearly £2,600 more in income tax (as 20%) than he’d have paid on the unrestricted private use of a van. There was nearly a £6,000 difference if Mr Jones paid tax at the marginal rate of 40% of the benefit.

So, what does the law state is the difference between a car and a van?

According to section 115 of the Income Tax (Earnings and Pensions) Act 2003, a car “is not a goods vehicle”, whilst a van “is a goods vehicle”, i.e. “a vehicle of a construction [emphasis added] primarily suited for the conveyance of goods or burden of any description”.

As far as HMRC were concerned, the vehicle should still continue to be treated as a car as the modifications made to it were not sufficiently permanent and substantial in scale to have altered its original manufactured construction.

Although the Land Rover Discovery supplied to Mr Jones may have become primarily suited for the conveyance of goods or burden, whilst he was carrying out his duties using it, this was as a result of modifications, which were made to the vehicle that did not fundamentally alter its structure, and not because it was “of a construction” for such a purpose. This was borne out by the fact that when Mr Jone’s vehicle was replaced by a new one after a year, it had been returned to Jaguar Land Rover whence it was converted back to its normal specification for re-sale.

In the circumstances, the Tax Tribunal agreed with HMRC that nothing could be found that the Land Rover Discovery in question was a “goods vehicle” within the definition of section 115.

The HMRC Employment Income Manual, from page EIM23110 , provides guidance on the differences between a car and a van.