The CWG2 Further Guide to PAYE and NICs was updated on 08 May 2019. The update section on Gov.UK says ‘Section 1.14 of CWG2 for 2019 to 2020 has been updated’.  This is not very helpful at all as this is quite a large section.  Although, it is better than the update on 07 March 2019 which just says ‘Guidance CWG2 for 2019 to 2020 has been updated’. 

So exactly what has changed?

Section 1.14 is all about ‘standard payments made when, or after, an employee leaves’.  As far as I can see, the only change is under the ‘For PAYE Purposes’ section where the P45 has already been issued:

Before

Payments in connection with employment related securities, including cash payments arising from those securities, made to an employee after leaving should also be taxed using code 0T (week 1 or month 1 basis non-cumulatively).

After

Payments in connection with employment related securities, including cash payments arising from those securities, made to an employee after leaving should also be taxed using code 0T for England and Northern Ireland, S0T for Scotland and C0T for Wales (week 1 or month 1 basis non-cumulatively).

However

Why the previous paragraph in Section 1.14 has not been updated I do not know.  In both the current and previous version it says:

If you’ve already given an employee a form P45 you should deduct PAYE using code 0T (non-cumulatively on a week 1 or month 1 basis) using the normal pay period for the employee (for example, monthly or weekly), at the time you make the payment. This payment should be submitted on an FPS.

Yet guidance on Gov.UK about paying a person after issuing a P45 says that 0T should be used non-cumulatively for rUK taxpayers (anyone who is not a Scottish or Welsh Taxpayer), S0T or C0T.

I’m not sure why the CWG2 just says that it is different if the payment after leaving is in connection with employment related securities.

Join our newsletter