HMRC have published their Employer Bulletin for August 2016. We summarise the key content for you, with links to our detailed guidance on the topics covered.

Recent consultations

A number of consultations were released this month:

Mileage regulations

When the new exemption for paid or reimbursed expenses was introduced amendments were made to the PAYE regulations which inadvertently removed the requirement to report taxable mileage allowance and passenger payments on form P11D. 

This has now been corrected through a further amendment made in July.

Apollo Fuels judgement

In HMRC v Apollo Fuels Limited [2016] EWCA Civ 157, the Court of Appeal ruled against HMRC confirming that no car benefit arose to employees leasing cars from their employer at market value.

Changes were introduced by Finance Bill 2016 to clarify that, with effect from 6 April 2016, there is no requirement for there to be any benefit transferred to the employee for a benefit in kind charge to arise.

HMRC have produced guidance for their staff about how to handle open cases up to and including 5 April 2016 where the judgement may be relevant.

Intermediary return penalties

The first quarterly employment intermediary return for the year ended 5 April 2017 should have been submitted by 5 August 2017.  Automatic penalties will be charged for late filing: 

  • The initial penalty will be £250
  • This rises to £500 and £1,000 if you are also late submitting the next two return.
  • If the return is still not received after 30 days a further daily penalty of up to £600 can apply.

Apprenticeship levy

The Apprenticeship levy comes in from 6 April 2017:

  • The levy is 0.5% of an employer’s pay bill.
  • Each employer will receive an annual allowance of £15,000, meaning you only need to report and pay if your annual pay bill exceeds £3m.
  • Payments have to be made through PAYE.
  • Paying employers will receive funds in a new digital apprenticeship services account which they can use to pay for apprenticeships.
  • Employers not liable to pay can still get a contribution to the training and assessment of their apprentices.

Further guidance for employers will be released later this year.

National Insurance numbers with a ‘KC’ prefix

A small number of these have been issued recently and can cause trouble with employers.

  • They are valid: individuals receiving them should use them as normal.
  • If you are having trouble submitting RTI information for an employee with this code leave the National Insurance number field blank and make sure the employee address field is complete.

Paying HMRC

In October, the electronic payment deadline of the 22nd falls on a Saturday.  To make sure payment reaches HMRC on time you need to have cleared funds in HMRC’s accounts by the 21st unless you are able to arrange a Faster Payment to clear on the payment deadline.

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).  Each type of tax has its own IBAN and BIC details, to find out the correct one to use check here

PAYE Settlement Agreement (PSA) payment

  • Electronic payments for the tax year ended 5 April 2016 must clear into HMRC’s bank account by 22 October (a Saturday, see above).
  • Cheques must reach the Accounts Office by 19 October.

Statutory payments

Employers can claim credit for some statutory payments made to employees:

  • To claim an Employer Payment Summary (EPS) has to be sent to HMRC by the 19th of the following month.
  • The credit reduces the amount payable to HMRC under PAYE.
  • If the statutory payments made exceed the amounts deducted from employees, you can apply for an advance to cover the difference.

However, since 5 April 2016 employers can’t receive anything for statutory sick pay.

Student loans

A new plan type was introduced for student loans from 6 April 2016.  Student loan repayments should now be deducted using either Plan 1 or Plan 2.

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.

Auto enrolment

Over 100,000 small and micro employers are due to begin their duties in the next few months.

Legal duties differ depending on the circumstances of employers and staff:

  • Employers yet to reach their staging date need to find out what to do by completing The Pensions Regulator’s online Duties Checker.
  • Employers who have reached their staging date need to make sure they know their ongoing duties to enrol and write to staff, pay contributions, keep records etc.
  • Employers who are due to re-enrol need to choose their re-enrolment date, assess and re-enrol eligible staff and re-declare compliance.

See Auto-enrolment: workplace pensions (subscriber guide)

NIC contributions for employees over the State Pension age

  • Once an employee has reached the State Pension age they don’t have to pay employee’s NICs.
  • They should be moved to NICs category letter C.
  • Employers must continue to pay Class I NICs for these employees.

Personal Savings Allowance

HMRC are encouraging employers to let their employees know that the Personal Savings Allowance was introduced from 6 April 2016.

This allows up to £1,000 of savings income to be tax free for basic rate taxpayers (£500 for higher rate taxpayers). See Savings income: tax on interest

Employer Bulletin: August 2016

A link to the published Bulletin can be found here or accessed via HMRC's website


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