Employer Bulletin: June 2021

Claim working from home tax relief

• Your employees may incur additional household costs if they have to work at home on a regular basis, either for all or part of the week.
  • This includes having been told to work from home because of Coronavirus.
• Additional costs include things like heating, metered water bills or business calls, that they can demonstrate have been incurred wholly, exclusively and necessarily as a direct result of working from home.
  • They do not include costs that would stay the same whether they are working at home or in an office.
• If employees are not reimbursed for these costs, they may be eligible to claim tax relief on them.
• Claims can be made using HMRC's online service, which is now open for claims that relate to periods up to 5 April 2022.
  • Employees who have to complete a Self Assessment tax return will need to claim working from home expenses via the employment income pages of their tax return instead of the digital service.
• There is detailed guidance to help them claim and to check their eligibility

See COVID-19: Employees working from home and Working from home (employer/ee)

Continued support for businesses: Statutory Sick Pay Rebate Scheme

• Employers with fewer than 250 employees who have paid Statutory Sick Pay (SSP) to employees for Coronavirus-related sickness absence, could be eligible for support under the Statutory Sick Pay Rebate Scheme.
  
  • Tax agents can make claims on behalf of employers.
  • The repayment will cover up to two weeks of the applicable rate of SSP.
• Find out more information on eligibility and check if you can claim back statutory sick pay.

See COVID-19: Government support tracker

Coronavirus Job Retention Scheme (CJRS)

• The deadline for CJRS claims for periods in May 2021 is Monday 14 June 2021.
• You can claim before, during or after you process your payroll.
  • It’s best to make a claim once you’re sure of the exact number of hours your employees will work so you don’t have to amend your claim later.

How much you can claim

• The UK government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.
• For periods in July 2021, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50.
• In August and September 2021, this will reduce to 60% of employees’ usual wages up to a cap of £1,875.
• You need to continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month.
  • This means, for periods between July and September 2021, you will need to fund the difference between this and the CJRS grants yourself.
• You must also pay the associated employee tax and National Insurance contributions to HMRC.
  • If this is not done, the whole CJRS grant is repayable. 
• There is detailed guidance to help you claim through the CJRS and key deadlines you need to be aware of.

Further support

• You can sign up to receive regular email updates from HMRC, to keep up-to-date with the latest information on their Coronavirus schemes. 
• Thousands of people have also joined HMRC's live webinars which offer information on the CJRS, other government support, and how they apply to you.

See COVID-19: Coronavirus Job Retention Scheme (CJRS) from 1 November 2020

VAT Deferral New Payment Scheme

• If you deferred VAT payments due between 20 March and 30 June 2020 and still have payments to make, you can use the online VAT Deferral New Payment Scheme to pay in smaller instalments.
  • You can join the scheme online, without the need to call HMRC.
• The scheme closes on 21 June 2021: if you want to join the scheme online, you must do so before this date.
• You may be charged a 5% penalty and/or interest if you do not either pay in full, sign up to the scheme online before the scheme closes or get in touch with HMRC to make an arrangement to pay by 30 June 2021.
• Find out more about the VAT Deferral New Payment Scheme, including the things you need to do before joining.
• The new scheme lets you pay your deferred VAT in equal monthly instalments, interest-free.
  • Join by 21 June 2021 to pay in up to eight instalments.
• If you have a Time to Pay arrangement already in place for your deferred VAT, you cannot use the online scheme.
  • If you need to amend your Time to Pay arrangement, please phone HMRC to do this.

See COVID-19: VAT deferred payments

Taxable benefit charge: returning office equipment

Employer-provided equipment

• If you have supplied your employees with office equipment to allow them to work from home, without a transfer of ownership, there is no tax charge when they return the equipment back to you.
• If you transfer the ownership of the equipment to the employee at any stage of their employment, a benefit charge generally arises on the market value of the equipment at the time of the transfer less any amount made good by the employee.
• There is an alternative method for calculating the chargeable benefit when equipment is transferred, more information on this method can be found in Employment Income Manual EIM21650.

Employer reimbursed equipment

• If your employee has agreed to purchase their own home office equipment for use whilst working at home as a result of Coronavirus and you reimburse the exact expense unless you have specified to your employee that they must transfer ownership to you, the ownership of the equipment rests with your employee.
  • There is no benefit charge on the reimbursement.
  • There is also no benefit charge if you allow your employee to keep the equipment as it is something that they already own.
• Further information and to check which expenses are taxable if your employee works from home due to Coronavirus is available.

See COVID-19: Employees working from home and Assets made available without transfer

Coronavirus: how HMRC will continue to support customers and the economy

• HMRC have updated the HMRC issue briefing COVID-19: how HMRC will continue to support customers and the economy.
• This document sets out the support schemes and policy changes that HMRC has implemented.
  • It also includes HMRC's principles for the next steps on tax collection, benefits payments, compliance checks and debt activity.
• HMRC recognise the continuing impact of the Coronavirus pandemic.
  • HMRC will continue to collect the tax due in a way that recognises the very real needs and challenges that businesses and individuals face.
• The updated issue briefing now includes government announcements made since November.

Check you are taking the correct student and or postgraduate loan deductions

• HMRC will contact you where they identify the wrong student and/or postgraduate loan deductions recorded on your employee’s full payment submission.
• HMRC may contact you by:
• • Generic Notification Service (GNS) reminder message.
  • Post: for example a change of loan or plan type letter or start and stop letter.
  • Telephone: HMRC will always ask security questions before disclosing any client information
• Further information can be found on student loan and postgraduate loan repayment guidance for employers.

Scottish student loans Plan Type 4

• Payroll software should now be updated to include new Student Loan Plan 4.
  • If your software does not include Plan 4 you will need to speak to your software provider immediately.
• It is important that you check your online notifications and start notices to ensure you are using the correct plan type as this will impact the employee’s take-home pay and student loan balance.

Basic PAYE Tools: maintenance release

• A maintenance update to the Basic PAYE Tools (BPT) was released at the beginning of May 2021 to support the 2021 to 2022 tax year.
• It is important that you update to, and are using, version 21.1.
  • To update or check for updates you should select ‘Check now’ in the update section of settings in the top right-hand corner of the tool. It is also recommended that you should set the automatic update to ‘yes’.
• New customers can download BPT where you will also find comprehensive help on installing this software.
• From April 2022, BPT will no longer operate in a 32-bit environment and you will need to ensure your computer and operating system software can run 64-bit applications in order to use BPT.
  • For more detail, you should refer to the ‘Useful Information’ section within BPT and the first time users guide.

Reminder deadline for reporting expenses and benefits 2020 to 2021 tax year

• The deadline for reporting any Expenses and Benefits is 6 July 2021.
• You need to do this for every employee you’ve provided with expenses or benefits.
• If you still need to make a report, you can avoid delay by using the following methods:
• • Commercial payroll software
  • HMRC’s PAYE Online service (now improved, to cater for employers with up to circa 500 employees)
  • HMRC’s Online End of Year Expenses and Benefits service
• The quickest way to complete this is online. If you can’t do it online then you can still print off the legacy paper forms P11D and P11D(b).
• You’ll also need to complete form:
• • P11D(b), if you have a Class 1A National Insurance contribution liability because you’ve payrolled your expenses and benefits.
  • P11D to declare any non-payrolled expenses or benefits.
• If your report is late, your employees could end up paying the wrong tax and be out of pocket.
• If HMRC have asked you to submit a form P11D(b) and you did not provide any employee expenses or benefits: complete this declaration.
• More information on reporting expenses and benefits is available.

See Benefits, share schemes & incentives

Medical benefits

• If you report medical benefits through payrolling benefits in kind, or the legacy P11D process, you may find that the 2020 - 2021 taxable value has changed.
• HMRC has been made aware that some medical providers may make refunds to employers if services were not provided as originally specified.
  • The reportable value of the benefits in kind is the cost less any refund related to that year, regardless of when it is received.
• If you are currently payrolling Benefits In Kind:
  • You may need to adjust the taxable value by way of an amended Full Payment Submission, and the correct value on the P11D(b) submission.
• If you use the legacy P11D process:
  • To ensure that your employees are not overtaxed and the correct amount of Class 1A National Insurance is reported, make sure you have any discussions with your medical benefit provider before the P11D deadline and report the correct taxable value on P11D submissions and on the P11D(b).

See Medical benefits and health checks

Paying Class 1A National Insurance contributions on payrolled benefits in kind: Generic Notification Service Message

• HMRC is reminding employers that they need to pay Class 1A National Insurance Contributions (NICs) and complete a P11D(b) by 6 July 2021 if they have taxed benefits in kind through the payroll.
• In early June 2021, HMRC will issue a GNS message via the Real-Time Information payroll system to contact employers where they hold data that suggests you are taxing benefits through payroll.
  • This message will remind you that a P11D(b) needs to be completed to account for any Class 1A National Insurance contributions due on these benefits.
• Class 1A National Insurance Contributions are payable by employers on nearly all benefits taxed through the payroll. 
  • Guidance on payrolling benefits in kind is available.
  • Guidance on completing form P11D(b) is available.
  • There is further information on how to view your GNS messages.

Paying Class 1A National Insurance Contributions

• Electronic payment for National Insurance Contributions declared on your P11D(b) return for the tax year ended 5 April 2021 must clear into the HMRC account by 22 July 2021.

Use the right payment reference when paying Class 1A NICs

• Help ensure your payment is correctly allocated by providing the correct payment reference.
• Use your 13-character Accounts Office reference followed by 2113.
  • Adding 2113 is important because 21 tells HMRC the payment is for the tax year ended 5 April 2021, and 13 lets HMRC know the payment is for Class 1A National Insurance contributions.
  • The reference should have no gaps between the characters.
• Go to pay employers’ Class 1A National Insurance and click the green ‘Pay Now’ button to select one of the secure payment methods or for more information on how to pay your Class 1A National Insurance contributions.

Reporting Pay as you earn (PAYE) in real-time

PAYE Real-Time Information (RTI) penalties: continuation of the risk-based approach to charging penalties

• Following HMRC’s review of the effectiveness of the risk-based approach to late filing PAYE and late payment penalties, they can confirm this approach will continue for the 2021 to 2022 tax year.
• This means that late filing and late payment penalties will continue to be considered on a risk-assessed basis rather than issued automatically.
• The first penalties for this tax year (beginning 6 April 2021) will be issued in August 2021.

Late filing penalties

• As in previous years, HMRC will also continue to not charge penalties automatically if a Full Payment Submission (FPS) is filed late but within three days of the payment date and there remains no pattern of persistent late filing.
  • This is not an extension to the current statutory position on reporting PAYE payments which remains unchanged.
• Employers are still required to file their submissions on time unless any of the circumstances set out in the sending a FPS after payday guidance arises.
• Employers who persistently file after the statutory filing date but within three days will continue to be monitored and may be contacted or considered for a late filing penalty as part of HMRC's risk-based approach.

Late payment penalties

• The due date to make PAYE payment to HMRC electronically remains the 22 of the month (or quarter if you are eligible to pay quarterly) following the tax month/period to which they relate.
• If you pay by cheque or other non-electronic payment methods, you must continue to make payment by 19 of the following month or quarter to which the payment relates.
• How to pay your PAYE guidance is available.
• If you pay late, HMRC may charge interest on the amount outstanding which will continue to accrue until the total amount is paid.
  • You may also face a late payment penalty which HMRC will continue to raise using a risk-based approach.
  • This will focus on cases of greatest risk and non-compliant behaviour.
• There is guidance on how HMRC calculate late payment penalties and how employers can appeal them.

Reporting your payroll information accurately and on time

• Accurate and timely reporting of your payroll is important, it helps to ensure that your employees pay the right amount of tax and supports Universal Credit.
  • Universal Credit is designed to increase the financial benefits of working and provide you with a more flexible workforce.
• Late or inaccurate reporting can negatively impact on your employees as Universal Credit payments are linked to the payroll information you report.
  • It is therefore very important to report your payroll accurately and on time, as changes in earnings can affect the amount of Universal Credit your employees receive.
• The payment date you report on your FPS should be on or before the date you pay your employees, not the payroll run date or another date from your payroll system unless the normal payment date falls on a non-banking day (Saturday, Sunday or bank holiday).
• When a regular payday falls on a non-banking day and because of this payment is made on the last working day before the regular payday or next working day after the regular payday: 
  • For PAYE purposes the payment may be treated as having been made on the regular payday.
  • This is also the date that should be reported on the FPS as the ‘payment date’ even if the actual payment is made slightly earlier or later.
• For National Insurance contributions purposes the payment must be treated as if it had been made at its regular time, if the actual and regular payment days are in the same tax year.
  • The payment may also be treated as having been made at its regular time when the payment dates cross a tax year.
• Detailed guidance on this subject can be found at point 1.8 of the CWG2 Further Guide to PAYE and National Insurance contributions.
• It is important to check this and make any changes that are necessary to your payroll software so that when you report, you use the correct payment date.
• HMRC often find that employers entering the incorrect payment date is the reason why some employers receive a penalty.
  • If you are unable to report payments on time and you have a reasonable excuse for doing so you should use a late reporting reason code.
  • You must include the code for every payment on the FPS where the circumstances apply.
  • Employers can include problems caused by Coronavirus as the reasonable excuse that prevented them from meeting their tax obligation.
• When you receive an electronic message from HMRC saying that they have successfully received your submission, it does not necessarily mean that it was correct and on time: it is just an acknowledgement of receipt.

Generic Notification Service (GNS) electronic warning messages

• Do not ignore these messages, they are intended to be a helpful service to notify you that you haven’t filed on time or paid on time.
• Electronic messages give you a chance to review your submission process to ensure that things are correct in the future.
• HMRC will send you a message:
• • Once in a month when they receive an FPS later than the payment date without a valid reason.
  • On the 11th or 12th of the month where they have not received an FPS for the month that just ended on the 5 or an Employment Payment Summary stating no employees were paid in that month

How do I access GNS Electronic warning messages?

• You can check your messages in the same way you do if you receive electronic coding notifications, either by:
• • Logging into PAYE Online and selecting the generic notifications from within the ‘Notice summary’ section.
  • Using the PAYE Desktop Viewer.
  • Using your commercial software: you should check with your software supplier that their product is compatible with accessing GNS messages.
  • Accessing your Business Tax Account and using the ‘messages’ link.
• HMRC recommend that you check for any electronic notice messages they may have sent you, as they contain helpful and important information.

See Real-Time Information (RTI) and Penalties: RTI (Real-Time Information) for PAYE

National Insurance number allocation

• The National Insurance number application digital service for adults who have not been allocated a number is now open.
• DWP have also opened their face to face service, for those who may still need to attend an office to have their identity verified.
• Applications should be made online initially and applicants will be advised if they need to book a face to face appointment.
• Demand is currently high for the service and applications can take up to 16 weeks to be processed.
• If an employee already has a National Insurance number, the quickest way to confirm or share their number is by using their personal tax account to download a confirmation letter or follow the lost National Insurance number guidance.

National Insurance holiday for the employers of veterans: update

• Employers are now eligible for a zero rate of Secondary Class 1 National Insurance Contributions on the earnings of veterans.
• Employers must continue to pay NICs as normal until April 2022, at which point, they will be able to claim back any National Insurance contributions that would otherwise have been relieved.
• Further information about this relief and what employers need to do is available.

See Employer NICs relief for veterans

Off-Payroll Working rules

• The Off-Payroll Working rules changed on 6 April 2021.
  • Medium and large-sized client organisations who engage contractors through their own limited company or other intermediaries should now be operating the rules.
  • Agencies of any size who supply contractors in this way also have responsibilities.

Help and support

• HMRC have new support available for those who are affected by the changes to the rules:
• • A new flow chart for clients to help you understand if the rules apply to you.
  • A live question and answer session with technical advisers on 23 June 2021, where you can get your questions on the rules answered. Watch out on HMRC’s social media for how to register.
  • A webchat on off-payroll if you want to talk to HMRC directly.
  • For those who have decided to reconsider how they offer contractors roles, HMRC have published new guidance on working through an umbrella company.
  • HMRC are working to identify any sectors who may benefit from further support and will be delivering additional workshops for the construction sector, which will be advertised through stakeholders.
    • If the sector you work in could benefit from additional support on the changes to the rules then please get in touch with HMRC by emailing: This email address is being protected from spambots. You need JavaScript enabled to view it.
• You can continue to use all HMRC's other guidance, as well as the free, digital Check Employment Status for Tax (CEST) tool to help with employment status decisions.
  • The CEST landing page has recently been updated to reflect the changes to the off-payroll working rules that took effect on 6 April, improve customer journeys and signpost customers to specific guidance to help them use CEST effectively. The tool itself and the decision it gives has not changed.
• HMRC's programme of live webinars on the general rules, status decisions, when the rules apply, fee-payers and international issues has now ended, but you can continue to access recordings of all six webinars on HMRC's help and support page.

Best practice

• Medium and large-sized client organisations may find the following bullets on best practice helpful in complying with the rules. Agencies of any size will also find some of this best practice useful:
• • Consider how the changes affect your organisation: some organisations have found it helpful to form an internal working group to consider the rules and review their procedures.
  • Upskill those responsible for making decisions: you may want to implement a central decision-making process, and you need to make sure decision-makers have the training they need, and all relevant departments are included in the decision process.
  • Review current workforce: many organisations are using digital tools to help them with employment status decisions, you can use HMRC’s CEST tool or another tool to make employment status decisions.
  • Talk to your contractors: you should provide a status determination statement to your contractors if they are inside the rules, as well as the agency you engage with, agencies should also pass status determination statements onto the next agency they engage with. You may also wish to share a status determination statement if a contractor is outside the rules, and you should talk to your contractors about your processes as well as your decisions.
  • Operate PAYE where appropriate: for all engagements inside the rules, PAYE needs to be operated by the agency that pays the contractor's limited company or other intermediaries’ fees or, if there are no agencies in the supply chain, the client needs to operate PAYE.
  • Use the RTI flag: if an engagement is inside the Off-Payroll Working rules, and you are responsible for deducting Income Tax and National Insurance contributions on payments to the contractor’s intermediary, you must use the ‘off-payroll worker subject to the rules’ indicator in RTI, the name of this indicator may be reflected differently in your payroll software.
  • Have a clear process in place for disagreements: some organisations have done this by creating an internal team to ensure disagreements are handled in a fair and consistent way.
  • Maintain an audit trail: this is a legal requirement.
  • Utilise the resources and guidance available to you from HMRC: HMRC's off-payroll working guidance is available.

See Off-Payroll Working: PSCs & Private Sector Engagers

Do you currently pay Employers PAYE using a debit or corporate credit card? Introducing HMRC’s ‘pay by bank account’

• You can now pay HMRC straight from your bank account without the need to enter card details or worry about card fees.
• The new process uses Open Banking technology to offer a seamless journey, all within the HMRC domain.
• The journey starts with HMRC, Open Banking technology connects the customer to their online banking to authorise a secure payment and then returns them to HMRC.
• All payment details will be pre-populated and carried through the journey so you can be reassured that the correct payment reference number will be used.
• Initially open to customers using their online accounts, the service will be extended to those who do not wish to use an online account and other regimes in the near future.
• Log in to your online HMRC account to get started.

Construction Industry Scheme (CIS): useful verification information for contractors and subcontractors

• If you are a subcontractor, you will need to provide your contractor with the exact same legal business name or trading name you used when you registered for the CIS along with your Unique Taxpayer Reference.
  • The contractor needs this information to verify you and pay you correctly.
• Contractors then need to use those exact details when undertaking a verification request otherwise it may give an ‘unknown’ or ‘unmatched’ result.
  • HMRC will be updating our online verification guidance for contractors and subcontractors to reflect this.
• If you are a contractor you can sign up for email alerts to receive GNS messages which can be done within your online account.
  • These GNS messages provide useful reminders for contractors for example when you have not filed your monthly return with the deadline approaching, confirmation of inactivity periods, and other messages.

See CIS: Contractors and Subcontractors

Tax Administration Framework Review

• In July 2020, the Government published its 10-year strategy for the tax system (Building a trusted, modern tax administration system). This committed to publishing a call for evidence on the Tax Administration Framework, which was published on 23 March 2021.
• We need to take a fresh look at the fundamental building blocks of the tax system to design a trusted, modern tax administration system that is simpler, easier to navigate and responsive to taxpayers’ needs and fits into the way people work, live their lives, and operate their businesses.
• This call for evidence is the first step in designing a tax administration system fit for all the challenges and opportunities of the modern era, including the flexibility and capacity to respond in future national crises.
• It explores, at a high level, how the framework could be reformed to improve the ways in which people experience the tax system and build on it to maintain trust between HMRC and taxpayers. 
• The call for evidence considers different aspects of the tax administration framework. Respondents should not feel that they must respond to all the questions in this document.
• HMRC are keen to receive ideas on how best to incorporate the widest cross-section of viewpoints, as well as the expertise of those who have a particular interest in tax legislation.
• Send any questions, queries or response to the call for evidence to This email address is being protected from spambots. You need JavaScript enabled to view it. by 13 July 2021.

See Call for Evidence: Tax Administration Framework

Plan for jobs campaign

• As part of the over-arching ‘Plan for Jobs’ campaign, Department for Business Energy and Industrial Strategy have asked us to share details of the ‘Help to Grow’ initiative launching next month to support small businesses.
• In June 2021, small businesses will be able to access a 12-week programme delivered by leading business schools across the UK.
  • The programme will combine a practical curriculum, with one to one support from a business mentor, peer-learning sessions and an alumni network.
  • The programme is 90% subsidised from the government.
• The Help to Grow Stakeholder Toolkit provides more information.
• Find more information and how to register on the Help to Grow – Take your business to the next level website.

Join like-minded Small to Medium-sized Enterprise (SME) businesses benefiting from the Peer Networks Programme

• Peer Networks is a free networking programme for SME leaders that are keen to develop their organisation for future success.
• Almost 5,000 businesses have benefitted from the government-funded Peer Networks programme and learnt from other SMEs about real solutions to challenges they have faced.
• The Peer Networks programme is being delivered locally through Growth Hubs across England, which are creating diverse networks of business leaders to discuss common business challenges from finance and HR, to sales and marketing.
• Business leaders will be able to discuss their individual challenges, reflect on valuable feedback from their peers, and identify practical solutions to improve their productivity.
• The programme is available to any SME business based in England that has:
• • Operated for at least one year.
  • At least five employees.
  • A turnover of at least £100,000.
• Expert facilitators will provide business leaders with the opportunity to create a trusted support network that works for them, helping to build and strengthen the business and improve its performance.
• Participants will also receive one to one support tailored to individual needs.
• More information is available on the Peer Networks website.

HMRC’s support for customers who need extra help

• HMRC’s principles of support for customers who need extra help set out their commitment to support customers according to their needs, and underpin the HMRC Charter.
• Find out how to get help and the extra support available.

Over 20,000 businesses are already benefiting from being Disability Confident

• As our economy recovers from the pandemic, we need to ensure that every individual has the opportunity to contribute to, and benefit from, our national revival. Workplace inclusion is central to this.
• The Disability Confident scheme supports employers with the tools to make the most of the talents disabled people can bring to the workplace.
• To find out more about Disability Confident and to sign up, check out the online guide.
• Once signed up you will receive a Disability Confident accreditation certificate and badge for three years, to display on your website and recruitment advertisements: providing a signal that you recruit fairly.
• Members can access free resources, including online guidance, specialist webinars, events and information about Access to Work.
• A Voluntary Reporting Framework is also available to help your organisation better understand the make-up of your workforce and encourage conversations about disability and mental health.

New tool launched to support organisations achieve Cyber Essentials certification

• The Cyber Essentials Readiness Tool, which has been developed by IASME on behalf of the National Cyber Security Centre asks organisations a series of questions related to the main Cyber Essentials criteria to help prepare them for certification.
• Through the Cyber Essentials scheme, businesses can learn how to defend themselves by securing internet connections and devices, controlling access to data, and understanding how to protect against malware.

External link 

HMRC: Employer Bulletin June 2021