On 19 April 2020, I published an article about how the CWG2 (Employer further guide to PAYE and National Insurance contributions) published on 06 April 2020 was incorrect. This Guide was subsequently updated on 21 April and has since been updated again, on 28 April.
The updated version, published on 28 April was accompanied by the explanation:
Paragraphs 1.5, 3.8.4 example 1 and example 2, 4.7 and 5.5.1 of the 2020 to 2021 version of CWG2 have been amended.
For completeness, let me take you through the amendments:
This is all to do with the value of the Employment Allowance for tax year 2020/21. Previous versions had quoted this as £3,000. The 28 April 2020 updated version has corrected this amount to £4,000!
3.8.4 Example 1 and Example 2
These two examples are also to do with the annual value of the Employment Allowance. Previous versions had quoted this as £3,000, however, the 28 April 2020 updated version now says it is £4,000.
There was a line in this paragraph that said:
You may also want to familiarise yourself with the new rules for Off-payroll Reform due for implementation from April 2020.
This has been removed as the IR35 / off-payroll reforms have been postponed until April 2021, as per the news story from 18 March 2020.
This section talks about payments that can be made towards household costs incurred by employees who work from home. Extremely relevant. Previous versions said that employers ‘may pay up to £4 per week (£18 per month) without supporting evidence of the costs’. The 28 April 2020 updated version reflects the guidance on Gov.UK and says that from 2020/21, the rates are £6 per week (£26 per month).
The importance of staying up to date
Increasingly, I am saying to employers to take a copy of the guidance that they are working to in order to justify themselves in the event of future compliance activity by HMRC.
Make sure that you have downloaded and work to the latest CWG2:
- Version issued 22 February 2020 (the first one for 2020/21) DO NOT USE
- Version updated 06 April 2020 DO NOT USE
- Version updated 21 April 2020 DO NOT USE
- Version updated 28 April 2020 – DO USE!