HMRC have published their Employer Bulletin for June 2019. We summarise the key content for you, with links to our detailed guidance on the topics covered.
Some of the items included in this update were also included the Agent update June/July 2019, rather than duplicate these we have linked to that update accordingly where appropriate.
P11D and P11D(b) Filing and Payment Deadlines
- The deadline for telling HMRC about Class 1A National Insurance contributions (NICs) that you owe for the tax year ending 5 April 2019 is 6 July 2019 at the latest.
- P11D forms due must be sent to HMRC by 6 July; failure to do so may result in a penalty.
- Class 1A NIC must reach HMRC by 22 July (19 July if you pay by cheque)
HMRC’s list of common questions, and mistakes to avoid.
- What do I need to file?
- If you paid any benefits and/or non-exempt expenses, or payrolled benefits you should file a P11D(b). Include all benefits liable to Class 1A NICs, even if you taxed them through your employees’ pay.
- You should send a P11D for each employee receiving benefits, unless you registered before 6 April 2018 to tax them through the payroll.
- If you didn’t register online to tax benefits through the payroll but did so anyway:
- You still have to send a P11D form, but mark clearly which benefits have been taxed through the payroll already.
- You need HMRC’s agreement each year, which is only normally given in exceptional circumstances.
- You may wish to register online now for the 2020-21 tax year.
- You can payroll all benefits except: Employer provided living accommodation and interest free and low interest (beneficial) loans
- I didn’t pay any expenses or benefits. Do I need to tell you if I don’t need to file a P11D/P11D(b)?
- You only need to tell us that you don’t need to make a return if we sent you a paper P11D(b), an electronic notice to file a P11D(b) or a reminder to file a P11D(b) letter.
- How can I be sure I’ve filled everything in correctly? There are free, online toolkits which you can use to help avoid mistakes. Some common ones to watch out for are:
- Don’t put ‘6 April 2018’ in the start date and/or ‘5 April 2019’ in the end date for company cars, unless they are genuinely the dates your employee received/returned a company car. If they already 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
- Remember to sign the form P11D(b) if you’re sending a paper one
- Only send one P11D(b) for each scheme, showing the total amount due. HMRC treat each separate P11D(b) as an amendment to any received previously.
- Check to see if you need to use the ‘adjustments’ at Part 4 before you complete Part 1 box C. If you do need to make an adjustment, you need to leave Part 1 box C blank.
- If you have given someone a beneficial loan double-check that you’ve completed all parts of Section H.
Paper forms must be sent to:
P11D Support Team BP1102 HM Revenue and Customs Department 1250 Newcastle NE98 1ZZ.
See P11D: reporting benefits and expenses
Toolkits – 2019 Updates
- National Insurance Contributions & Statutory Payments toolkit.
- The Expenses and benefits from employment toolkit
June electronic payment deadline
In June the electronic payment deadline of the 22nd falls on a Saturday.
- You need to have cleared funds in HMRC’s account by the 21st unless you are able to arrange a Faster Payment to clear on the payment deadline.
- If your payment is late you may be charged interest and/or a late payment penalty.
- Electronic payment for Class 1A NIC declared on your P11D(b) return for the tax year ended 5 April 2019 must clear into the HMRC account by 22 July 2019.
- Use the right payment reference when paying Class 1A NIC; this should be your 13 character Accounts Office reference followed by 1913.
Supply Chain Fraud
HMRC have said they aware of increasing levels of fraud in labour supply chains and with companies offering payroll services. Payroll Company Fraud occurs when a business transfers staff and payroll responsibility to a fraudulent Payroll Company who supply the staff back to the business but do not make the necessary payments to HMRC for Income Tax, National Insurance Contributions or VAT.
Recent examples are:
- Co-Employment: when control and supervision of an employee’s activity is shared amongst two or more business entities. One company is the original employer and the other/others take over the personnel related functions, claiming the workforce are employed jointly by all companies.
- Mini Umbrella Companies: An umbrella company is a company that acts between the ultimate employer and the staff doing the work. The workforce is segmented into small companies with a very small number of employees in each to exploit specific allowances designed to help small businesses and reduce the tax paid to HMRC.
If it can be shown that your company knew, or should have known, that transactions in your supply chain are linked to fraud you may lose the right to recover VAT paid on these transactions and may still be liable for unpaid tax or National Insurance.
HMRC recommends anyone entering into an arrangement with a payroll company or umbrella company should undertake sufficient and proportionate due diligence checks.
See When the tax inspector calls for HMRC’s spotlights.
In-Year Triggers
The Tax Code comparison trigger compares the tax code on HMRC records for that particular employment against the one shown on the individual’s latest RTI submission from the employer or pension provider. If there is a difference the system will assess the difference against the following criteria:
- Are the codes for the same employee?
- The tax codes on HMRC records must not have been issued within the last 60 days
- Suffixes (eg L,T, etc) or the basis of operation (eg cumulative or WK1/MTH1) are not taken into consideration
- Have Welsh and Scottish rates been applied correctly?
If the tax codes match no further action is taken.
Where the tax codes do not match, to ensure the employer has the correct code:
- A new tax code calculation takes place
- If the tax code calculated is the same as the one held on HMRC records a P6 will go out to the employer.
- If the tax code calculated is not the same as the one held on HMRC records a P6 will be sent plus a P2 will be issued to the taxpayer.
See Real Time Information (RTI)
Using loans to escape the Optional Remuneration rules
HMRC may challenge instances where loans are being used to get around the Optional Remuneration Arrangements (OpRA) rules?
- Under OpRA rules the value of the benefits in kind is the higher of the amount of earnings given up, or the value under the standard rules.
- HMRC is aware that employers are entering employees into arrangements that seek to get around the OpRA rules by paying an amount of money through a loan facility.
- Income tax and NIC may be due on these earnings.
See Salary sacrifice & Optional Remuneration schemes
Re-enrolment of staff back into a workplace pension scheme is a two-stage process
See Agent update June/July 2019
Student/Postgraduate Loan notices
See Agent update June/July 2019
Disguised Remuneration Loan Charge
See Agent update June/July 2019 and our Disguised Remuneration zone
The General Data Protection Regulations/Data Protection Act 2018 – Have you paid the annual data protection charge?
- All businesses that process personal data are legally required to pay an annual data protection charge to the Information Commissioner’s Office (ICO) unless a relevant exemption applies.
- Failure to do so could result in a fine with a maximum of £4,350.
- Once you have paid, your business details are published on the Information Commissioner’s register of data controllers.
There are three levels of charge payable:
- Micro organisations (including sole traders) pay £40;
- Small and medium organisations pay £60; and
- Large organisations pay £2,900.
- Payments made by direct debit automatically receive an annual £5 deduction.
- In order to determine if payment is necessary, you can use the self-assessment tool on the ICO website.
See GDPR: General Data Protection Regulation
Contractors operating CIS – new VAT reverse charge on building and construction services
See Agent update June/July 2019
Help your employees make school holidays easier with Tax-Free Childcare
See Agent update June/July 2019
How to quickly confirm National Insurance numbers
When taking on a new employee you will need to know their National Insurance (NI) number.
The quickest way to obtain this, if your employee doesn’t know it, is ask them to:
- use the HMRC App or their personal tax account (PTA).
- Find their NI number on previous payslips, P60s, or letters about tax, pensions and benefits.
- Complete a form and get HMRC to post their NI number to their home address, which can take up to 15 days.
- Contact the National Insurance Number Helpline and HMRC will post confirmation to them.
External Link: