HMRC have published their Employer Bulletin for June 2016. We summarise the key content for you, with links to our detailed guidance on the topics covered.
Reporting expenses and benefits for 2015/16
Employers must tell HMRC by 6 July 2016 about any expenses and benefits provided to employees or directors during the 2015/16 tax year.
- By 6 July form P11D or P9D must be submitted for each relevant employee or director, and one form P11D(b) must be submitted to declare the amount of class 1A NIC payable.
- Class 1A NIC is payable electronically by 22 July, or by 19 July if making payment by post.
See P11D and P11D(b): useful links
Personal Tax Account
HMRC remind employers that they can reduce the number of enquiries they get from their employers by encouraging them to review their Personal Tax Account online.
Employees (and other individuals) can
- Check their tax code
- Check their income tax estimate
- Tell HMRC about changes affecting their company car
- Use online forms to claim tax deductible work expenses or repayments of tax (see below)
- See the progress of forms submitted online
- Check the expected level of their state pension
- Check their National Insurance history
- Renew their tax credits
- Tell HMRC about a change of address
Later on this year, employees will be able to
- View tax calculations for previous years
- Make payments online
- Check their employment history
Employees can register and access their account at www.gov.uk/personal-tax-account.
Tax relief for employees
Employees may be able to claim tax relief if they have to use their own money, and are not reimbursed, for travel or things they must buy for their job, such as
- Repairing or replacing small tools
- Cleaning, repairing or replacing specialist clothing, for example, a uniform or safety boots
- Business mileage, where an employee uses their own vehicle or fuel costs, if using a company car
- Travel and overnight expenses
- Professional fees and subscriptions paid to some approved professional organisations
Forms P87 can be completed online through the personal tax account (see above) or by completing and submitting a paper copy.
Final PAYE submissions for tax year 2015/16
These should have already been completed and sent to HMRC.
Any employer who has not yet sent their final report should
- Submit a final report as soon as possible using an Earlier Year Update (EYU)
- Only submit the differences between the last report submitted and the final figures for the tax year
Employers who didn’t pay anyone in the final period of the tax year should send a final report using an Employer Payment Summary (EPS)
Employers who forgot to put ‘Yes’ in the ‘Final Submission for the year’ field in their last Full Payment Summary (FPS) should correct this by using an EPS.
See Penalties: RTI (Real Time Information) for PAYE.
Reporting PAYE on time and late filing penalties
HMRC remind employers that all PAYE information must be reported on or before the day that employees are paid, including employers who took advantage of the temporary reporting relaxation for micro-employers which ended on 5 April 2016.
The three-day period of grace for late reporting will continue for occasional delays, however employers who persistently file after the filing date but within three days may be contacted or considered for a penalty, see PAYE/RTI penalties: 3 day grace period extended.
Where employers have a reasonable excuse for filing late, the appropriate late reporting reason code should be used for every relevant payment on the FPS.
See Penalties: RTI (Real Time Information) for PAYE.
Online appeal against late filing penalties
HMRC ask employers to use their online appeals service if they disagree with a penalty; appeals will be dealt with quicker and employers will normally receive a faster decision than if they appeal in writing.
Penalties are not charged for the first month in a tax year that an employer fails to submit on time, but an appeal can still be made if there was a reasonable excuse for not filing on time.
Tax Credits
HMRC are asking employers to encourage their staff to renew their tax credits online before the 31 July 2016 deadline.
Employers can
- Add a message to payslips in June and July, for example “Renew your tax credits claim and update your circumstances online before 31 July. Go to www.gov.uk/manage-your-tax-credits”
- Keep RTI returns accurate and up to date as employees’ tax credits are based on the details submitted.
Tax credit renewals packs will be received before the end of June.
New State Pension
HMRC have published materials which might assist employers and their employees with any queries about the new state pensions which came into effect from 6 April 2016. These include
- A new state pension resource pack, which includes factsheets, email templates and a poster.
- A new state pension myth-buster, which includes handouts addressing many frequently asked questions.
HMRC also draw attention to the following NIC credits:
- Class 3 NIC credits for spouses and civil partners of Service personnel who accompany their partners on an overseas posting.
- NIC credits for carers which could increase the amount of state pension received by a part-time carer who looks after one or more people for at least 20 hours a week.
Links to the relevant website pages are included on page 9 of June’s HMRC Employer Bulletin.
Making PAYE payments electronically
HMRC remind employers to
- Pay the correct amount
- Use the correct account. HMRC Cumbernauld is recommended: Sort code 08 32 10, Account number 12001039.
- Use the correct payment reference. This is the 13 character accounts reference
- Make sure payment clears on or before the payment deadline of 22nd of the month
Paying Class 1A NIC
- Class 1A NIC should be paid separately
- Use your 13 character Accounts office reference followed by 1613 when making the Class 1A NIC payment.
Payments from overseas
- HMRC changed bank accounts earlier this year.
- Most employers should be unaffected as sort codes and account numbers were moved across.
- Overseas payments are affected and changes are needed to the account number (IBAN) and Bank identifier code (BIC):
- IBAN GB62BARC20114770297690
- BIC BARCGB22
- Account name HMRC Cumbernauld
Paying by post
- Use the new payment address: HMRC Direct, BX5 5BD
- The old address is still in use but will be discontinued at some point.
Student Loans
HMRC will prompt employers via the Generic Notification 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.
If employees are not able to confirm their plan type, employers should use Plan type 1 until further instruction is received from HMRC.
Contractor Monthly Returns and Subcontractor Verifications
From April 2016 all contractors must use the CIS online service to file monthly returns.
Online verification of subcontractors will be mandatory from April 2017.
HMRC have introduced a number of improvements to CIS online to make it easier and more efficient, including
- Improved search functions for verifying subcontractors
- Screens which display tax treatment details against each subcontractor
- Facility to amend returns online
- A new message/alert service
Messages will be sent to the contractors HMRC CIS Online account, accessed either through some commercial software packages or through HMRC’s online service.
See CIS: Contractors and Subcontractors
Employer Bulletin: June 2016
A link to the published Bulletin can be found here or accessed via HMRC's website www.gov.uk.
