HMRC have published their Employer Bulletin for February 2023. We have summarised the key content for you, with links to our detailed guidance on the topics covered.
Reporting advances of salary when paid on account of earnings
- Accessing earned salary before the normal payday is a salary advance.
- These are payments on account and an additional Full Payment Submission (FPS) is required to be submitted.
- The increase in administrative burden is recognised and HMRC are amending secondary legislation to allow reporting on or before the contractual payday. This means only one FPS need be submitted.
- Further details will appear in future bulletins.
Issuing of P9 coding notices to employers for 2023 to 2024
- P9 Notice of Coding email notifications will be sent from the week commencing 6 February 2023 until 5 March 2023.
- Check your email address is up to date on your PAYE Online Account.
- The coding will be available to view on the Account, by clicking the correct tax year in the drop-down menu.
- Paper notices should be received before 6 April 2023.
Employer PAYE liabilities data is now available sooner
- From February 2023, employers will be able to view the previous month's PAYE liability on PAYE Online two days earlier on the 10th of the month.
Basic PAYE Tools — new release
- Version 23.0 will be available at the end of March. Ensure your settings have the automatic update enabled.
PAYE Desktop Viewer — important maintenance update
- Version 2.6 is now available. Please ensure you are using the latest version.
Reporting expenses and benefits for the tax year ending 5 April 2023
- From 6 April 2023, HMRC will no longer accept informal payrolling benefits arrangements.
- Informal arrangements must be formalised as soon as possible.
- Where expenses and benefits have yet to be payrolled, employers must register now to use the payroll from 6 April 2023. A separate P11D will no longer be required for each employee.
- For employers already payrolling benefits, a P11D(b) still needs to be submitted for NICs reporting.
- The P11D reporting deadline for 2022/23 is 6 July 2023. Paper copies are no longer accepted for new submissions or amendments.
- Failure to report by the deadline may lead to penalties.
Tax updates and changes to guidance
Student and postgraduate loan thresholds from April 2023
The student loan plan and postgraduate loan thresholds from 6 April 2023 are:
- plan 1: £22,015
- plan 2: £27,295
- plan 4: £27,660
The deductions remain at 9% for earnings over the threshold.
- postgraduate loan: £21,000
The deductions remain at 6% for earnings over the threshold.
Employers receiving a loan start notice (SL1 or PGL1) must check and use the correct loan or plan type and start date as shown on the notice. This will ensure the employee pays the correct amount.
If the employees' earnings are below the relevant threshold, employers should update their payroll records to show there is a loan and file a start notice.
Employment status guidance for Associate Dentists to be withdrawn
From 6 April 2023, the HMRC manual guidance that states that Associate Dentists (AD) will be classed as self-employed and not employed if following approved standard working agreement will be withdrawn. ADs will have to follow the usual tests for employment to judge what their status is. The CEST tool will be available for use.
Preparing for the new tax year basis - Income Tax Self Assessment return
The Basis Period reform will change how businesses are assessed for tax purposes from 6 April 2024. In the lead up to this change, businesses will face a transition in the tax year 2023/24.
- Businesses will be taxed on the profits of the accounting period ending in 2023/24 along with any additional profits arising up until 5 April 2024.
- Profits can be mitigated by using any overlap relief brought forward. HMRC can provide details of any historic figures.
- Excess profits can then be spread over five years.
- From 6 April 2024, businesses will be taxed on the profits arising from 6 April to the following 5 April.
See: Basis Period Reform
Save time on pre-employment checks with the HMRC app
- To speed up the recruitment process, job applicants can use the HMRC app to access their employment history, income, NI number and tax codes, going back five years.
Help employees with income tax relief for employment expenses
- Employers who help their employees with claiming tax relief on employment expenses should ensure that they are aware of the changes to the claim form P87.
- The forms changed on 21 December 2022 and if the correct information is not provided, the claim will be rejected.
- The easiest way for employees to claim is by using HMRC's online services.
National Minimum Wage
On 1 April 2023, the National Living Wage (NLW) will increase to £10.42 for workers over 23 years old. Other National Minimum Wage rates will also increase. HMRC will be running webinars to help employers get it right.
Tax Avoidance - how to avoid being caught
HMRC are encouraging contractors and those working through umbrella companies to look at their 'Tax avoidance - don't get caught out' campaign.
Plastic Packaging Tax: check if your business needs to register
The Plastic Packaging Tax was introduced on 1 April 2022.
- If your business manufactures or imports 10 or more tonnes of plastic packaging within a 12-month period, you must register for the Plastic Packaging Tax, even if your packaging contains 30% or more recycled plastic.
Martyn's Law/Protect Duty
In the wake of the Manchester Arena bombing, the government have announced details for 'Martyn's Law' or the Protect Duty. It will require venues to take steps to improve public safety in line with the size of the venue and the planned activity.