HMRC have published their latest Employer Bulletin – ‘your route to the latest in payroll news’...

View the HMRC Employer Bulletin here.  That tagline is worth remembering as I go through some of the important contents of the latest online magazine.

Even if I do not mention it below, it is all worth reading:

End of Year Reporting Through RTI

This is a good reminder that the last Full Payment Submission (FPS) of the year must include the indicator telling HMRC that it is the last one of the tax year 2017/18. Or, you can do this via the Employer Payment Summary (EPS).

Either way, it must be done so that HMRC can close the tax year on their systems.

There is also the reminder that P60s are due by 31 May 2018 for anyone that was employed on 05 April 2018. The legislation is also specific that this is only an obligation where the employer has made ‘relevant payments’ in the tax year and was required to deduct tax.

So, it could be that an employee started on 01 April, was in your employ on 05 April but you had not paid them yet. Do you produce a P60? Strictly, there is no legal obligation, however, consider that there is no requirement for the ex-employer to produce one either. This could leave the employee with no P60 for that year at all, so you might consider it responsible to expand HMRC’s wording and produce a blank P60 in these cases.

Penalties

The FPS must be sent on or before the date that there employee is paid. A penalty may be charged if the FPS is sent late, however, HMRC’s systems look at the RTI field ‘Payment Date’ to determine whether it was late (do a search for the rules on this on ‘What payroll information to report to HMRC’).

There is an interesting example of an employee being paid on 30 March because the usual payday of 01 April is a non-banking day. Given that Good Friday is 30 March this year, which is a non-banking day as well! A better example would be an employee that is usually paid on the last calendar day of the month (31 March) but payment cannot be made because that is a Saturday. It cannot be made the previous day as that is Good Friday so payment is made on 29 March. In that example:

  • The FPS must be sent on or before the 29th and
  • The Payment Data must be set as the normal payday of the 31st. The Payment Date is the important date for the penalty regime and its interaction with the Universal Credit system

P11Ds

In this section there is also information about reporting expenses and benefits. Particularly:

  • If you didn’t register for payrolling of benefits on or before 05 April 2017, you will still have to do a P11D
  • If you want to payroll benefits for 2018/19, you need to register on or before 05 April 2018

Note that it is incorrect to say that employers payrolling benefits need to give a letter to their employees at the end of the year if they are provided with a payslip that gives them this information each pay period.

Basic PAYE Tools

If you use HMRC’s free software for anything, make sure you are using version 17.4.17200.477 as any previous version will cease to be recognised by HMRC this month.

The P9 Coding Run

This annual event started on 12 February and continues to 23 March 2018. P6 (in-year) tax code notifications should not be issued in this time. When downloading them, HMRC advise to ensure you select 2018/19 – though if they are not showing, log out and log back in the following day and they should be there!

Off-Payroll Working – working through an intermediary (IR35)

I’m not sure that there is anything new here in this complicated section.

I wonder if it isn’t better to start with the Gov.UK guidance itself and then segue to the ‘Running Payroll’ guidance when you ascertain that the individual is a deemed employee and you have to put them on the payroll.

Simplifying PAYE Settlement Agreements

I’m not sure it isn’t better to read my article on this to give the full story of what is and isn’t happening to PSAs from 06 April 2018.

It is good to know that HMRC have suspended the issue of the P626 pending the outcome of the consultation.

Payments in Lieu of Notice (PILONs)

This is a very unhelpful article which does not explain the changes at all. I have committed to write a separate article myself on this complicated issue.

You can only hope that there will be some guidance from HMRC on this soon given that we are only a few weeks away from the changes on 06 April 2018.

Scottish Tax

Whilst the figures are correct for the rates and bands (inclusive of the UK-wide Personal Allowance), these were not the figures announced at the Draft Scottish Budget in December 2017. They are the ones amended by the Finance Secretary on 31 January 2018.

Look out for the all-important Scottish Rate Resolution on 20 February 2018.

Tax-Free Childcare

Good for general knowledge of the new TFC scheme, however, the most important thing for employers is that Employer-Supported Childcare schemes close to new entrants on and after 06 April 2018. Existing participants can continue in the scheme but TFC does mean the eventual demise of the childcare voucher.

Do read the part on page 7 which is entitled ‘Role of employers in Tax-Free Childcare’.

National Minimum / Living Wage

Note that the rates do not increase on 01 April 2018. This is misleading for employers and workers.

Legislation says that they must increase from the first full pay reference period that starts on or after 01 April 2018. Though, there is nothing to say that they cannot be effective from this date if the employer wants to make changes mid-way through a pay reference period.

Student Loans

Note the new Generic Notification Service message from April 2018 if employers do not include the Plan type on the FPS.

This would have been a good space to say ‘the P45 format is not changing and employers are advised to ask new employees with a Student Loan which Plan type they have’.

Soft Drinks Industry Levy

I cannot immediately see that this is remotely to do with ‘the latest in payroll news’. Am I missing something here?!

HMRC’s bi-monthly Employer Bulletin really is a must-read (even if only to spot the mistakes!). Seriously, UK payroll professionals are advised to get this delivered straight to their desks by signing up for E-Mail updates.

Be careful what you sign up for though with anything on Gov.UK. I get over 2,500 E-Mails every week so I must have done something wrong!

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