11 May 2020 is a date that needs to be remembered by payroll professionals for 2 reasons: The Off-Payroll Worker (OPW) Marker and changes to Scottish Income Tax.

The Off-Payroll Worker (OPW) Marker

This is a new field on RTI submissions (field 208).  This has to be completed for deemed employees.  On 06 April 2020, Alison Walsh from HMRC posted on the tax agent’s blog about the delay of the roll-out of the off-payroll reforms to the private sector.  She said:

Private sector and third sector organisations
  1. Organisations would not have to issue status determination statements, therefore, by implication
  2. There was no need to have a SDS appeals / disagreement process in place and
  3. ‘Organisations in the private and third sector should not use this indicator’ (i.e. the OPW flag)
Public authorities

And I quote:

For the tax year 2020-21, public authorities will not be required to:

 Produce a status determination statement (SDS) and pass it to the worker and the first party in the contractual chain

  1. Have a status disagreement process in place

Regarding point 3 and the OPW marker, she said, and I quote:

However, from 11 May 2020 there will be an additional requirement on public authorities, or agencies, for contracts which fall inside the off-payroll working rules. The party paying the contractor’s company will be required to start using the PAYE RTI ‘off-payroll worker subject to the rules’ indicator in payrolling software. While there is no requirement to start using the off-payroll worker indicator on RTI submissions from 6 April 2020, this function will be available and may be used from that date.

SDST have included an updated RTI data items grid for 2020/21 that has been posted to Gov.UK as version 1.2.  The only change as far as I can see is the description of the field 208.  This has changed:

  • From ‘Off-Payroll Worker Subject to the 2020 Rules’ to
  • ‘Off-Payroll Worker subject to the rules’

Subtlety, the removal of the words ‘2020’ have made this marker applicable to individuals that are already deemed employees.

Scottish Income Tax

Even though the rates and thresholds were agreed on 04 March 2020, HMRC have advised that these will not be implemented until the first payday on or after 11 May 2020.  This date appears as in the PAYE Update 24 for software developers, released on 28 April 2020.  This says:

Revised Scottish Income Tax rates and bandwidths are used for the first pay-day on or after 11 May 2020. 2019 to 2020 Scottish Income Tax rates and bandwidths continue to apply up to and including 10 May 2020.

Therefore, from the first payday on or after 11 May 2020, the following will apply, as per the Taxable Pay Tables:

Rates

The 5 rates of tax for Scottish Taxpayers remain unchanged:

Band Rate (%)
Scottish Starter 19
Scottish Basic 20
Scottish Intermediate 21
Scottish Higher 41
Scottish Top 46
The Thresholds

The Budget raised the size of these thresholds by the rate of inflation rather than raising the threshold values by the rate of inflation.  The below shows the bands of earnings taxable at the relevant Scottish rates:

Band 2019/20 2020/21 Change
£ £ £
Scottish Starter 2,049 2,085 +36
Scottish Basic 10,395 10,573 +178
Scottish Intermediate 18,486 18,272 -214
Scottish Higher 119,070 119,070 0
Scottish Top Over 150,000 Over 150,000 0

 

Remember 11 May 2020!

 

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