ICAEW’s Tax Faculty shares highlights from the latest edition of HMRC’s Employer Bulletin.
HMRC published its latest Employer Bulletin on 19 April, setting out its current views on employment taxes policy and operational issues that affect payroll and benefit-in-kind (BiK) reporting.
While the Tax Faculty highlights the following points, there are others in the bulletin that employers and agents need to be aware of.
Classification of company cars and vans for BiK purposes
HMRC’s guidance at EIM23100 et seq has been updated to reflect HMRC’s victory in the Coca Cola Court of Appeal case heard in June 2020. HMRC’s new guidance includes a flowchart (recommended to be opened in IE browser). Read more in Employer Bulletin.
Direct debits and time to pay arrangements
HMRC notifications on underpayments sent to employers paying PAYE by direct debit have now been suppressed, despite what Employer Bulletin says. The conditions that need to be met for a time to pay (TTP) arrangement are listed; TTPs should be arranged directly with HMRC – agents cannot do this.
HMRC has highlighted changes and provided links to its various guidance on the tax and national insurance contributions (NIC) rules on termination payments over the past five years, including:
- the introduction of post-employment notice pay;
- the removal of foreign service relief on termination payments to UK resident individuals;
- clarification that the exemption for injury does not apply to injury to feelings; and
- alignment of the rules for income tax and NIC.
HMRC sends notification messages to employers about student loans as a reminder to start or stop taking deductions or to use the correct plan number. There is a link to HMRC’s guidance that reminds employers to include deductions on full payment submissions if any of the following apply:
- a new employee’s P45 shows deductions should continue — ask employee to confirm their plan or loan type, or both;
- a new employee says they are repaying a student loan — ask employee to confirm their plan or loan type, or both;
- a new employee fills in a starter checklist showing they have a student loan and or postgraduate loan — the checklist should say which plan or loan type, or both to use;
- HMRC sends an SL1 start notice — this will say which plan type to use;
- HMRC sends a PGL1 start notice — this will say they have a postgraduate loan;
- an employer receives a generic notification service (GNS) student loan or postgraduate loan reminder (or both) — ask employee to confirm plan or loan type, or both.
Employer PAYE charge queries
Every month, employers contact HMRC’s employer helpline to inform it of a discrepancy. Some affect the amount of PAYE due by the employer leading to HMRC chasing apparent underpayments (as highlighted in Resolving HMRC employer liabilities and payments account errors, which the faculty continues to pursue with HMRC). Others affect employees’ code numbers and yet others affect income tax/NIC/student loans and universal credit/tax credit awards.
To help avoid some of these disputes, HMRC provides some tips on avoiding duplicate employments, payroll IDs, what to do when an employee leaves, and the occupational pension and irregular payment fields in full payment submissions.
Reporting expenses and benefits for 2022/23
As reported previously, forms P11D and P11D(b) must be submitted only online from 6 April 2023. HMRC has without notice mandated online-only submission of forms P11D and P11D(b) and amendments. Paper forms including lists are no longer accepted.
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