HMRC have published their Employer Bulletin for April 2016. We summarised key content for you, with links to our detailed guidance on the topics covered.
Budget 2016 announcements
HMRC highlight the following announcements as being of interest to payroll operators:
- Rates and thresholds for 2016/17, see Tax Data
- Changes to Van benefits; the charge for zero emission vans will be phased out between 2015 and 2022 (instead of 2015 and 2020) and the charge for 2016/17 will remain at 20% for 2016/17, see Vans Benefit Charge (VBC) Zero emission vans
- Employer-provided pensions advice exemption increases from £150 to £500 from April 2017.
- Voluntary payrolling will be extended to include non-cash vouchers and credit tokens from April 2017, see Voluntary payrolling of benefits
Reporting Expenses and Benefits in Kind for 2015/16
THere is new guidance relating to the year-end requirements for expenses and benefits.
Forms P11D
- Employers who submit P11D information in a list rather than completing forms for each employee must:
- Use a font size no smaller than 11-point Arial.
- Sort the list by employee, not by benefit.
- Include the employer reference.
- Include each employee’s name, National Insurance number or date of birth and gender.
- Include all expenses and benefits provided to an employee on the same list.
- Show the code letters assigned to each P11D benefit.
- If employees have had expenses and benefits payrolled, these should be marked as such.
- Amended forms must show the original amounts and items as well as the revised ones.
Forms P11D (b)
- Paper forms submitted to HMRC which show a Class 1A NIC amount due must have an original signature written in ink.
- Paper forms which include a charge will be rejected if they are photocopies, scanned copies or include a stamp of a signature.
- Amended forms must show the original amounts and items as well as the revised ones.
Paying Class 1A NIC
- Use your 13 character Accounts office reference followed by 1613 when making the Class 1A NIC payment.
S336 claims
- When these are attached to a paper P11D and submitted by the employer both should be sent to HM Revenue & Customs (NIC&EO), Room BP2101, Tynemouth House, Benton Park View, Longbenton, Newcastle upon Tyne, NE98 1ZZ.
- When these are submitted separately on a form P87, form P810 or by letter, these should be clearly headed S336 CLAIM and a copy of the P11D should be attached. These should be sent to Pay As You Earn and Self-Assessment, HM Revenue & Customs, BX9 1AS.
End of Year Payroll reporting
The April Bulletin includes similar details as the February Bulletin regarding the submission of the final FPS, EPS and the End of Year Checklist.
Employers’ NIC allowance: Single director companies
From April 2016 if the director of a company is its only employee, the company is no longer eligible for the Employer’s NIC allowance.
- Companies affected should make sure that they pay the full amount of employer NIC without deducting any allowance.
- An Employer Payment Summary (EPS) should also be submitted to HMRC confirming that the claim to the allowance has stopped.
HMRC advise that if a second employee receives sufficient earnings so that the company has employer National Insurance contributions to make for more than one earner then the full allowance can be claimed.
PAYE payments
HMRC reminds employers to check their payment reference, payment amount and payment date. Wrong details can lead to an automatic penalty.
Payment reference:
- Include your 13 character Accounts Office Reference (example 123PA00012345) with no gaps.
- Montly payers making an early payment before the 5th of the month or a late payment after the 5th of the next month should add an extra four numbers to identify the year and month it relates to. An early or late payment for the month ended 5th May 2016 should have the numbers ‘1701’ added, 17 for the tax year 2016/17 and 01 for the first month of the tax year.
- Quarterly payers making an early or late payment should add four numbers to identify the tax year and the quarter. An early or late payment for the quarter ended 5th July 2016 should have the numbers ‘1703’.
Payment amount:
- Pay the amount showing as owing per the Full Payment Submission (FPS) of the previous month minus any reductions on the Employer Payment Summary (EPS) sent in before the 19th of the current month.
Payment date:
- Make the payment early enough to clear HMRC’s account on or before the due date of the 22nd of the month.
- If making payment by post, it must be received by HMRC by the 19th.
- BACS Direct Credit don’t operate on non-bank working days.
- In May the electronic payment deadline falls on a Sunday so payment must be made by Friday
Trivial Benefits
The new exemption for Trivial benefits removes a liability to income tax and Class 1A NIC from 6 April 2016 where the benefit:
- Is not cash or a cash voucher
- Cost less than £50
- Is not part of a salary sacrifice or contract arrangement
- Is not provided in recognition of services performed
The exemption is subject to a £300 annual cap for employees that are directors or office holders of close companies, or members of their family or household.
Trivial BIK which are subject to Class 1 NIC rather than Class 1A NIC (such as non-cash vouchers like match tickets) will continue to be subject to Class 1 NIC until a separate amendment to NIC Regulations takes effect.
See Trivial benefits
National Living Wage (NLW)
HMRC remind employers that from April 2016 all workers aged 25 or over are legally entitled to at least £7.20 per hour.
HMRC advise employers to take these four steps to make sure that they are ready for the change:
- Identify which staff are eligible for the NLW.
- Update payroll information.
- Tell staff about their new pay rate.
- Check that staff under 25 are earning at least the right rate of National Minimum Wage.
Apprentices under 25
From April 2016 employers no longer have to make employers’ national insurance contributions in respect of apprentices under 25, up to an earnings threshold of £43,000.
- The apprentice must be following a government statutory apprentice framework which vary for the different UK companies.
- Evidence will be needed to apply the relief.
- NIC category H should be used for apprentices under 25, including those under 21.
Links to check whether your employee is on a statutory apprenticeship are included in HMRC Guidance, or in our guide to Employer’s NIC allowance (subscriber version).
PAYE desktop viewer
PAYE Desktop Viewer is an application from HM Revenue and Customs (HMRC) that allows employers to view, search and sort large numbers of employee tax codes and notices. Notices can also be downloaded and viewed offline.
Version 2.42 of the viewer is now available which enables employers and agents to
- View codes for the Scottish Rate of Income Tax
- View notices advising which Student Loan Plan the employee has.
The viewer can be downloaded from HMRC’s website.
A new version of Basic PAYE Tools (BPT) is also available.
Student Loans
HMRC will prompt employers via the Generic Notificaton Service (GNS) if they do not report any deductions for an employee when one is expected. A second missed deduction will result in a second prompt and a third in a phone call.
HMRC advise employers to:
- Check their inbox for online notices.
- Implement SL1 and SL2 notices at the first available payday.
- Check that deductions are made against the correct plan type.
- Ask their employee to contact the Student Loan Company if they don’t know their plan type.
Employer supported childcare
Tax and NIC relief for Childcare vouchers will not be available for new entrants to the scheme from April 2018.
Tax-Free Childcare will be introduced from early 2017. Parents can have an online account which they and others can pay into and the government will top up the account with 20p per 80p up to a maximum top up of £2,000.
There is no statutory requirement for employers to contribute.
See Childcare and childcare vouchers
Employee Starter Checklist
HMRC have issued a printable version of their starter checklist.
Alternatively, our version is more user friendly: it includes an employer checklist, see New employee starter checklist (2016/17).
Employees travelling to interviews, promotion boards and grievance panels
- HMRC advise employers that the reimbursement of employees travel and subsistence costs for attending these sorts of events is subject to tax and NIC.
- It says that tax relief is not available as the employees will not be attending a workplace to perform duties of employment.
- {Editorial comment: this is merely HMRC's view. We suggest that each case should be decided according to its own facts and circumstances. Employment/career progression and the nurtuing of staff welfare maybe something that will assist a business.}
Company car users
- Employees that they can update their company car details online via their Personal Tax account.
- Employees can check what information HMRC has about their company car and fuel benefits and amend their tax code to add, remove or update a company car benefit.
This is not available to employees whose benefit is taxed through their company payroll via payrolling.
Scottish Rate of Income Tax (SRIT)
HMRC again remind employers that
- Scottish taxpayers will pay tax at the same rates as the rest of the UK for 2015/16.
- HMRC and not the employer are responsible for identifying Scottish Taxpayers.
- The S code must be applied if sent to the employer by HMRC.
Some employers experienced problems when downloading information, and the S prefix was not shown on the P9s in their third party software or the PAYE desktop viewer.
HMRC have fixed this problem and by 21 March 2016 reissued all P9s which were accessed via the Data Provisioning Service.
Employers should have received email notification that a new P9 was available and should download the information again to make sure that they have the correct codes.
Employer Bulletin: April 2016
A link to the published Bulletin can be found here or accessed via HMRC's website www.gov.uk.
