Employer Bulletin: June 2018

HMRC have published their Employer Bulletin for June 2018. We summarise the key content for you, with links to our detailed guidance on the topics covered.

Reporting expenses and benefits

  • The deadline for reporting Expenses and Benefits in Kind for 2017-18 is 6 July 2018.
  • A P11D(b) form is required if:
    • One or more P11D is submitted.
    • Employees have received expenses or benefits which have been ‘Payrolled’.
    • HMRC have requested one be filed.
  • If HMRC have sent you a paper P11D(b), an electronic notice to file a P11D(b) or a reminder letter and you do not have any expenses or benefits to declare you can tell HMRC by:
  • Common mistakes to watch out for are:
    • Do not put ‘6 April 2017’ in the start date and/or ‘5 April 2018’ in the end date for Company cars unless they are genuinely the dates your employee received or returned a company car. If they had the car before the start of the tax year leave the ‘from’ box blank; if they kept the car into the new tax year, leave the ‘to’ box blank.
    • Check for wrong CO2 emissions, not including accessories and incorrect recording of capital contributions and private use payments for cars.
    • Remember to sign the form P11D(b) if you are sending a paper one.
    • Only send one P11D(b) for each scheme; do not send a separate one for employees and directors. Each separate P11D(b) is treated as an amendment to any received previously by HMRC.
    • Check P11D if you have given someone a Beneficial loan and that you have completed all parts of Section H.
  • Class 1A NIC must be paid by 19 July 2018.
  • If you haven’t already registered online to Payroll your company benefits you can so now ahead of the 2019-2020 tax year. This means you will not need to send P11Ds, from that tax year onwards, as long as you can payroll all your benefits.

Flexible benefits

  • The rules for flexible benefits, salary sacrifices, and Optional remuneration schemes changed on 6 April 2017:
    • Arrangements entered into on or before 5 April 2017 kept their previous tax treatment until the earlier of a renewal or variation of the arrangement. All pre-6 April 2017 benefits in kind moved into the new rules on 6 April 2018.
    • Pre-6 April 2017 Cars and Accommodation move into the new rules on the earlier of renewal or variation or April 2021.
  • If you may have an employee who is in the traditional rules and then moves into the new rules mid-year you can report it either as two separate benefits or a combined figure.

Childcare schemes

  • On 13 March the Government announced that the employer supported Childcare schemes, would remain open to new entrants for an additional 6 months, until 4 October 2018.
  • As this created practical issues for employers who had already closed their schemes on 5 April 2018 HMRC have advised that they will use their collection and management powers to allow the tax and National Insurance contribution advantages to continue for employees who were members of the scheme before 5th April 2018, even where employers choose not to re-open their schemes.

Higher Income Child Benefit Charge

  • If employees have an income of over £50,000 and claim Child Benefit or have a partner who claims, they may have to pay the Higher Income Child Benefit Charge (HICBC) .
  • HMRC are asking employers to remind employees to check their annual income to calculate whether they are liable to pay the HICBC.

National Living and Minimum Wage increases

Student loans

  • If you receive a Student loan start notice (SL1):
    • For an employee below the plan type threshold you should update your payroll software to note the employee as a student loan borrower. This will ensure deductions will be taken if, at any future point, the threshold is exceeded.
    • For an employee who had left your employment you do not need to do anything unless you continue to receive SL1’s in which case you should contact HMRC.
    • For an employee where deductions have already started you should check the student loan plan type to ensure there have been no changes and update your payroll software if there has been a change to the plan type. There is no need to contact HMRC.

Updating Basic PAYE Tools

  • When Basic PAYE Tools (BPT) is first installed the automatic update setting defaults to ‘Yes’: HMRC recommend that this setting is not altered.
  • When a new version of BPT is released users will see a message to alert them that a new version is available or they can use the ‘Check now’ button in settings to check for later versions.

Welsh Rates of Income Tax

  • From 6 April 2019 the Welsh Government will set the rate of income tax for Welsh resident taxpayers but this will continue to be collected by HMRC.
  • People living in Wales could pay a different rate of Income Tax compared to people in other parts of the UK.
  • From April 2019, Welsh resident taxpayers employed or in receipt of a pension will have a tax code beginning with C.
  • Those completing a Self-Assessment tax return will be asked about country of residence on their return.

Public Consultation: Off-payroll working in the private sector

Construction Industry Scheme

HMRC have prepared some further hints and tips for employers who also operate as a subcontractor under the Construction Industry Scheme (CIS): 

  • When you receive payment from a contractor and a deduction is made, the contractor must provide you with a Payment and Deduction Statement (PDS) no later than the 19th of the month following the month of payment.
    • The PDS can be in electronic format, providing both you and the contractor agree to this, and you are able to store and print it.
    • A contractor is not obliged to provide a PDS if you have been paid gross, but many do as it is good practice.
    • HMRC can charge a penalty for inadequate records; if you lose a PDS or it is mislaid you should ask the contractor for a copy which should be marked ‘duplicate’.
  • To avoid having to claim a repayment for overpaid CIS deductions, you can apply for Gross payment status, providing your business passes the qualifying tests. You can apply when registering for CIS or online at a later date via your tax account.
  • Limited company subcontractors without gross payment status should off-set CIS deductions taken from income as a subcontractor against their monthly or quarterly payments to HMRC on the Employment Payment Summary (EPS).
    • If you make a mistake you need to send a further EPS with the correct year-to-date figures and reduce your monthly or quarterly payments to HMRC by the amount of the deductions to avoid having to claim a CIS repayment at the end of the year.
    • Make sure you keep a record of amounts set-off using the CIS132 or a similar record.

National Insurance Numbers on Biometric Residence Permits

  • From August more people applying for a Biometric Residence Permit (BRP) will receive their National Insurance number through the same process.
  • Employers are reminded that for individuals who are seconded to work in the UK they must complete the appropriate boxes on their first RTI submission.

Tax avoidance

  • HMRC advises anyone thinking of using tax avoidance arrangements to seek appropriate, independent and professional advice before entering into the arrangements.
    • Advisers qualifications should be checked to ensure the advice received is specific to individual circumstances.
    • Those who fail to take Reasonable care completing their tax returns will face a penalty of up to 30% of the tax they tried to avoid, plus interest.

First Soft Drinks Industry Levy return due in July

  • Packagers of drinks that are liable for the Soft Drinks Industry Levy (SDIL)  , or those who need to report drinks that have been brought into the UK must send a return and pay any levy due every quarter.
  • Returns must be submitted and any levy due paid within 30 days of the end of each reporting period.

Investing in mental health and fitness at work

  • There are a number of tax reliefs available to encourage and support investment to help create the best conditions for staff to thrive for example:
    • Some specific counselling and Employee Assistance Programmes (EAPS) where they are available to all employees. There is a list of what qualifies here.
    • Mental Health First Aid training where it is work related training
    • Health screening, including mental health screening is tax free for one screening per year.
    • Medical treatment for work related injuries, including mental ill health is tax free.
    • Medical treatment to get employees back to work up to £500
  • HMRC have issued new guidance on Fitness at Work
  • Certain Recreational benefits  may be provided on a tax free basis.

The Apprenticeship Levy

  • From 6 April 2017 employers with a pay bill over £3 million each year have been liable to pay the Apprenticeship levy to HMRC through the PAYE process.
  • If an employer who pays the apprenticeship levy doesn’t plan to use all of the funds in their apprenticeship service account, they can make a transfer of up to 10% to another employer to support them in taking on apprentices.

Requirement to Correct

  • The new Requirement to correct legislation requires UK taxpayers (including non UK resident trustees and non-resident landlords) who have undeclared UK tax liabilities on foreign income and assets to declare this to HMRC before 30 September 2018.
  • Employers may want to draw this to employees’ attention as substantially higher penalties of between 100-200% of the tax owed will be applied to those who fail to disclose any tax due on foreign income following 30 September 2018.

Employer Bulletin: June 2018

The published Bulletin can be found here or accessed via HMRC’s website www.gov.uk.

 

 

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