HMRC have published their latest Employer Bulletin – ‘your route to the latest in payroll news’. Here is a brief summary of some of the points, though even if I do not mention it below, it is all worth reading:


Page 2 is important in two respects and all concerns the importance of the Payment Date field on the FPS (field 43). The confusing issue around the Payment Date declaration is that it serves two purposes:


If a payment is incorrectly reported or the FPS is submitted late, this can lead to the HMRC / DWP interaction resulting in an incorrect payment to the employee (have a look at ‘Universal Credit and Employers’ to try and understand this complicated link). Essentially, UC entitlement or non-entitlement is determined by the amount of earnings in an ‘assessment period’ that is determined by the date on which the claim is made to the DWP. The stable DWP assessment period requires similarly stable RTI submissions of earnings, something that is not always easy given that people are not always paid on the same day each month, for example 31 day months as opposed to 30 day months.

Given the requirement for some stability in the earnings declared, Employer Bulletin 73 states that the Payment Date is:

‘the earlier of the date an employee is paid or the date they were entitled to that payment, not the payroll run date, or another date from your payroll system’

So, using this latest explanation, if the payday is 25 August but payment is made on the 24th because the 25th is a non-banking day, Payment Date should be declared as the 24th.

However, this goes against guidance on the RTI data items grid that says:



Using the same example as above, this guidance (which is not new) gives a direction that the Payment Date should be declared as the 25th, regardless of the fact that the employee was paid earlier.

This is corroborated by guidance ‘What payroll information to report to HMRC’ which says:


When it comes to charging penalties, HMRC’s systems use the Payment Date data. Whilst the legislation says that the FPS must be sent on or before the date that the employee is paid, a late filing penalty may be charged if the FPS is sent after the date declared as the Payment Date.

So, using the example above, if the Payment Date is declared as the 25th but the employee is paid on the 24th, HMRC’s systems will look at late filing if the FPS is received after the 25th (although, HMRC says that it will not impose penalties if the FPS is sent within 3 days of the Payment Date, unless the employer is a persistent late filer).


For the interaction with the UC, I conclude that the Payment Date should be the date that the employee was entitled to be paid (i.e. the 25th in the above example) and NOT as per the guidance in the Employer Bulletin (which says it should be the 24th). This concurs with HMRC’s own guidance at 1.8 of the CWG2 2018/19 which talks about the operation of PAYE and Class 1 National Insurance contributions when the regular date for payment is a non-banking day.

For the possible imposition of late filing penalties, the Payment Date is also important as the FPS must be sent on or before the date that is declared (or within 3 days if not persistently). Also, have a look at this list of valid reasons why the FPS can be sent late but remember there may be a need for the ‘Late Reporting Reason’ field to be completed.



Page 3 talks of two issues as reminders for employers:



If an employee does not work for a period of 3 months and no FPS is sent, HMRC’s systems may regard this employee as a leaver.

Payrolls are frequently comprised of people that are not paid for a period of time – maybe they are on long-term sick, maybe they are causal employees. Regardless of the reason, if the employee is not paid regularly, employers should be aware of the Irregular Payment Pattern Indicator and use this to prevent HMRC’s systems closing a taxpayer’s record.



This is not to do with the A, B or C that we enter when we have a new employee.

It is a reminder from HMRC to include the postcode of the employee when submitting the address. It is this postcode that will be used as part of HMRC determining the employee’s tax residence status (i.e. a Scottish Taxpayer or a Welsh Taxpayer). In addition, as the Bulletin points out, an incorrect address on HMRC’s systems may result in mismatches with the DWP’s systems which can, in turn lead to delays in processing things such as Universal Credit.



Form PSA1 advises HMRC the value of items that have been included in a PAYE Settlement Agreement.

Page 3 includes a notification that the PSA1 will be changing for the tax year 2018/19 to account for the fact that different thresholds and rates apply for Scottish Taxpayers compared to those in rUK (rest of the United Kingdom) countries.



Electricity is not a fuel and HMRC have previously said that, where employers reimburse business travel for solely electric-powered cars (or require the employee to make good), they should use the actual cost of charging the vehicle. This is not an easy thing to calculate.

Therefore, the page 4 announcement of an Advisory Electricity Rate of 4p per mile is welcome. The Bulletin does not contain any announcement about an effective date. However, I believe that the August Bulletin announcement comes ahead of publication of the revised Advisory Fuel Rates from 01 September 2018.



The sharing of the Income Tax regime continues with Wales from April 2019. This will mean the setting of a Welsh Rates Resolution once the Welsh Government has agreed the 3 rates of Income Tax that will apply to Welsh Taxpayers.

This article on page 5 is a plea for Welsh Taxpayers to ensure their correct address is registered with HMRC. The taxpayers themselves can update their address using their Personal Tax Account but should also advise their employer so that the correct information can be sent via the FPS.

The Welsh Government have published information about the sharing regime on their Website and this is a good overview.



The Student Loan world expands in April 2019 with the collection of PGLs. These apply in England and Wales, so it is not just the Department for Education that have made this product available (as the DfE applies for skills in England only).

More information will be given on the collection of PGLs in a later Bulletin, however, there are a couple of points that an employer should consider now:

  • The P45 does not look as though it will be updated. It is already unfit for purpose regarding Student Loans anyway, as it fails to identify which of the Undergraduate Loans apply (i.e. Plan 1 or 2)
  • So, given that there will be three different Plan types (1, 2 and PGLs), if you don’t already, is it now time to ask the ex-student / new employee ‘which Loan do you have?’ Essentially, we will be asking the Starter Checklist questions rather than defaulting to Plan 1, only for HMRC or the employee to tell us otherwise. You should be aware that this form is currently being revised so maybe wait for the final version to be published


Page 6 is clear that the P46 (Car) can be used in the following circumstances:

  • Advising HMRC of the provision of a company car, or
  • Advising HMRC about ceasing provision of a company car

It cannot be used for advising HMRC that an employee has changed their car. This has to be done by getting the employee to advise HMRC themselves. This can be done online via their Personal Tax Account or by asking them to telephone HMRC’s Taxes Helpline on 0300 200 3300.

Employers will still have to advise HMRC about car changes via the P11D (or payroll if payrolling benefits), however, it is good to be advised that employees themselves are responsible for updating their car details. It is probably good for employees to be advised of the two ways in which they can notify HMRC in the event that they are disabled or digitally excluded.

**Update 21 August 2018**

HMRC have updated this section of the Bulletin to say that you can still report this change online. Unfortunately, the previous version of the Bulletin has been overwritten by the updated version so you will never be able to see that the above analysis was a true reflection of what the original said.



Page 6 also talks about the disguised remuneration scheme, often referred to as the Contractor Loan Scheme. Broadly, this is where an individual looked to reduce their Income Tax and NICs liability by paying some of their remuneration to a scheme / trust that converts the money to a loan (though the scheme may pay some of this as a small salary which is taxable income). The remaining monies stay as a loan and may be subject to Income as a benefit-in-kind.

Budget 2016 announced the intention to apply a Disguised Remuneration Loan Charge on outstanding and unrepaid loan balances. Legislation was introduced via Finance Act (No 2) Act 2017 and applies to all loans made since 06 April 1999 and outstanding on 05 April 2019.

There will be no loan charge if the individual reaches a settlement agreement with HMRC before 30 September 2018. If the loan is still outstanding on 05 April 2019 and no settlement agreement is in place, employers need to declare the outstanding balance as employment income on the FPS. This will involve a new RTI field on the FPS and EYU, which we are awaiting details of:



HMRC’s advice to ‘settle now’ under the new legislation is very relevant and there is not much time for individuals to be able to register interest in a settlement arrangement.



HMRC have updated their guidance for employers when completing an EYU that includes negative employee NICs.

Page 6 says that this now matches the guidance that is in the RTI Data Items Grid for EYU field 143:



Page 7 talks of four pieces of draft legislation regarding employment income set to come into force on 06 April 2019:

  1. Changes to Optional Remuneration Arrangements (OpRA)
  2. Charging electrical vehicles at work (personal cars and vans)
  3. Changes to Income Tax treatment of emergency vehicles, and
  4. Changes to tax relief on employee expenses
  5. Putting overseas scale rates on a statutory basis

Rather than repeat an explanation of the above, it is best I refer you to an article written previously. This article also talks about the reform of employer contributions into life assurance and Qualifying Recognised Overseas Pension Scheme (ROPS).



If you have made it to the end of this article, I hope that you have found it a useful summary of what is a good Employer Bulletin – with the exception of the article about the Payment Date which I do not agree with.

It is also nice to see an Employer Bulletin that does not mention the Soft Drinks Industry Levy and I could never understand why it was included in a ‘latest in payroll news’ document anyway!

Join our newsletter