SIP - Capped on payslip

Brie

Looks like payroll is playing fun and games with me!  

I had asked to have a one of deduction of £600 made from my pay to go into a share purchase plan at work.  For some reason instead what I see on this month's payslip is £407 with the notation "SIP - Capped".  

I can't for the life of me think why they haven't taken the correct amount or why they think it should be capped.  £600 is the max one can contribution to get matching from the employer. but you are allowed to purchase much more.  I've done £600 a year for a number of years but normally through £50 a month.  They messed up on cancelling the £50 regular contribution initially but even taking that into account this would be a total of £457 deducted for SIP in this salary year.

Is there some weird tax rule about share purchase plans of which I am unaware?  I am in the process of being made redundant but my understanding was that SIPs aren't detrimentally affected by that.

I have asked payroll for an explanation but knowing them they will take a couple of weeks to get back to me and probably not actually answer the question before there's about 5 emails back and forth.  

Marcon

Brie said:

Looks like payroll is playing fun and games with me!  

I had asked to have a one of deduction of £600 made from my pay to go into a share purchase plan at work.  For some reason instead what I see on this month's payslip is £407 with the notation "SIP - Capped".  

I can't for the life of me think why they haven't taken the correct amount or why they think it should be capped.  £600 is the max one can contribution to get matching from the employer. but you are allowed to purchase much more.  I've done £600 a year for a number of years but normally through £50 a month.  They messed up on cancelling the £50 regular contribution initially but even taking that into account this would be a total of £457 deducted for SIP in this salary year.

Is there some weird tax rule about share purchase plans of which I am unaware?  I am in the process of being made redundant but my understanding was that SIPs aren't detrimentally affected by that.

I have asked payroll for an explanation but knowing them they will take a couple of weeks to get back to me and probably not actually answer the question before there's about 5 emails back and forth.  

Have you looked at the explanatory paperwork (or website) for your SIP? If that doesn't help, I guess it's a call to payroll to ask them for an explanation.

Brie

Perfectly sensible suggestions @Marcon but not possible.

Payroll doesn't have a phone number anywhere so it's all meant to be via chat or email and has been like that for about 3 years now.  I can't chat or look at the work website about the SIP because I'm on garden leave so none of that is available to me any more.  I printed off reams and reams of stuff before my last day in the office to help avoid this problem but missed this bit obviously.

ReadingTim

HMRC's rules on SIPs state that the maximum you can spend on partnership shares (the ones you buy out of your pre-tax salary is the lower of £1,800 per year, or 10% of your income.  Depending on contributions to date, and the fact you're being made redundant (meaning you won't complete a full tax year with that employer), that's the most likely explanation for the cap I can think of.  

Alternatively, it is possible that your contribution has been capped because if the full amount was processed, it would have the effect of meaning you'd be paid at below national minimum wage level, which is illegal, even though you have voluntarily chosen to join the scheme.  I'm not sure how many HR departments are clued up on this aspect, as it's more relevant to those on mat leave or long term sick.  

However, the only people who can answer for certain are your HR department, rather than a couple of randoms off the internet.  

Brie

Gov.uk does say there is a 10% limit based on income but given the £457 where the SIP amount seems to have been capped makes it look like payroll thinks my annual salary is under £5k.  Of even if they just allow me to buy based on being an employee for 1/3 of the year I still should be allowed well in excess of the £600 i requested.

still boggled.

Brie

ReadingTim said:
However, the only people who can answer for certain are your HR department, rather than a couple of randoms off the internet.  

I know, I'm just impatient.  And while I'm not on  a huge salary £600 deduction wouldn't reduce me to below min wage.  Even for a third of the year.

MacMickster

Brie said:

ReadingTim said:
However, the only people who can answer for certain are your HR department, rather than a couple of randoms off the internet.  

I know, I'm just impatient.  And while I'm not on  a huge salary £600 deduction wouldn't reduce me to below min wage.  Even for a third of the year.

They wouldn't be looking at a third of a year.  As you are talking about a single payment then they would be looking purely at the particular payroll period in which the payment was made.

Brie

MacMickster said:

Brie said:

ReadingTim said:
However, the only people who can answer for certain are your HR department, rather than a couple of randoms off the internet.  

I know, I'm just impatient.  And while I'm not on  a huge salary £600 deduction wouldn't reduce me to below min wage.  Even for a third of the year.

They wouldn't be looking at a third of a year.  As you are talking about a single payment then they would be looking purely at the particular payroll period in which the payment was made.

So in that case they are allowing me £407 which might be 10%  of the month's salary - I should be so lucky to be paid £4070 a month!!  Or even over 2 months which is how much of the salary year has been paid so far.  But this might make sense if the other £50 I've paid so far applies to the last month in the previous salary year.

hmmm looks like I'll have to wait to see what they say and whether they will automatically take the rest next month.