It is hard enough keeping on top of changes to legislation and guidance anyway. It is not made any easier when guidance is updated that just says: ‘A updated version of 480(2018) uploaded with changes to sections 18.1, 18.3, 21.17, 24.1 and 25.1’.

For the benefit of people that do not know what these sections are, here is my summary of the changes.  In short, it is largely to do with employees who are in excluded employments. An excluded employment is described as one where the direct employer isn’t a ‘relevant third person’ unless it is acting as a trustee.

Changed from:

Although the income from a scholarship is exempt from a tax charge in the scholar’s hands, scholarships awarded to students by reason of their parents’ employment will normally give rise to a tax charge on the parent unless the parent is in an excluded employment (see paragraph 1.19)

To:

Although the income from a scholarship is exempt from a tax charge in the scholar’s hands, scholarships awarded to students by reason of their parents’ employment will normally give rise to a tax charge on the parent.

What the actual change is:

Reference to excluded employment has been deleted.

This is all about where the legislation states that there is an exclusion from a tax charge for any scholarship provided from a trust fund or under a scheme for full-time education or instruction under 2 conditions.

Changed from:

In the relevant tax year not more than 25% by value of the awards go to members of the families or households of the employees whether or not the employee

·        (a) is in an excluded employment (see paragraph 1.19)

·        (b) is resident or ordinarily resident in the UK, or

·        (c) the duties of the individual’s employment are performed outside the UK, and

The award wasn’t provided by reason of the parent’s employment (disregarding for this purpose only the extended meaning given to this phrase in paragraph 18.2).

To:

In the relevant tax year not more than 25% by value of the awards go to members of the families or households of the employees whether or not the employee

·        (a) is resident or ordinarily resident in the UK, or

·        (b) the duties of the individual’s employment are performed outside the UK, and

The award wasn’t provided by reason of the parent’s employment (disregarding for this purpose only the extended meaning given to this phrase in paragraph 18.2).

What the actual change is:

Reference to excluded employment has been deleted.

This is under the section’ provision of benefits of facilities connected with living accommodation, i.e. hearing, lighting, repairs etc.

Changed from:

If the employee concerned isn’t in an excluded employment (see paragraph 1.19) he or she is also liable to tax on the expense incurred by the provider of the accommodation on benefits or facilities connected with the accommodation.  Such expenses would include heating, lighting, garden maintenance, domestic or other services, and repairs and decorations except those within paragraph 21.20.

To:

The employee concerned is liable to tax on the expense incurred by the provider of the accommodation on benefits and facilities connected with the accommodation.  Such expenses would include heating, lighting, garden maintenance, domestic or other services, and repairs and decorations except those within paragraph 21.20.

What the actual change is:

Reference to excluded employment has been deleted.

This is the section that says at the end of the tax year, the employer must provide a P11D to the employee (or a statement to the employee where benefits have been payrolled and the amounts are not clearly details on the payslip).

Changed from:

At the end of each tax year the employer is required to give particulars of the non-exempt expenses payments, benefits and facilities provided for each of his or her employees who isn’t in an excluded employment as set out in paragraph 1.19.   Form P11D provided by HMRC is used for the purpose.   If the employer is registered to payroll benefits through Real Time Information (RTI) the taxable amounts will be reported in a Full Payment Submission.

To:

At the end of each tax year the employer is required to give particulars of the non-exempt payments, benefits and facilities provided for each of his or her employees.  Form P11D provided by HMRC is used for the purpose.   If the employer is registered to payroll benefits through Real Time Information (RTI) the taxable amounts will be reported in a Full Payment Submission.

What the actual change is:

Reference to excluded employment has been deleted and changing the wording from ‘non-exempt expenses payments’ to ‘non-exempt payments’.

Changed from:

A separate form P11D should be used for each employee who isn’t in an excluded employment (paragraph 1.19).  Apart from the information given in this booklet reference should also be made to the P11D(Guide), booklet CWG5 Class 1A National Insurance contributions on benefits in kind and the booklet CWG2 Employer Further Guide to PAYE and NICs.  Copies of these may be obtained from the Employer Orderline or our website.

To:

A separate form P11D should be used for each employee.  Apart from the information given in this booklet reference should also be made to the P11D(Guide), booklet CWG5 Class 1A National Insurance contributions on benefits in kind and the booklet CWG2 Employer Further Guide to PAYE and NICs.

What the actual change is:

Reference to excluded employment has been deleted and information about the P11D (Guide) and the CWG5 and 2 being available from the orderline or Website.

This is all to do with amendments to the Income Tax (Earnings and Pensions) Act 2003, specifically Part 7A, effective 06 April 2018.  Finance Act 2018 ‘strengthened’ Part 7A by introducing measures designed to tackle perceived disguised remuneration schemes.  New sections were inserted that, essentially, require employers to treat the monies as employment income and tax it as such.

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