HMRC published another Employer Bulletin this February, we have summarised the key points including benefits and payrolls, and added some extra details and links where we think it will be useful to do so.
*Paid Subscribers: if you are looking for CPD points can we recommend Employers What's On? 2023-24 for you. This is a rolling tracker of key employment tax announcements and updates covering the current tax year.
Employers' Bulletin: highlights
Benefits & Expenses
Taxed Award Schemes
Tax and Class 1A National Insurance is due on benefits or non-cash vouchers to employees provided via third parties on behalf of the employer.
- If you are a provider of such awards, you should use a taxed award scheme (TAS) to make a payment to HMRC
- A TAS for awards given in the 2023 to 2024 tax year must be agreed by 6 July 2024.
- HMRC's Incentive Award Unit deals with all aspects of a TAS, including the valuation of awards.
Benefits
- From 6 April you can submit P11D or P11D(b) using online forms.
- Payrolling benefits become mandatory from April 2026.
- If you are ready to take the plunge and start on Voluntary Payrolling benefits, you must register before the start of the new tax year (by 5 April 2024)
National Insurance Contributions (NICs) rates reminder
From 6 January 2024 (in case you missed it)
- The main rate of employee Class 1 NICs is reduced by 2%, from 12% to 10%.
See National Insurance: Rates
Basic PAYE tools
- A new release of HMRC's PAYE tools is out now!
- It is important that you update and use version 24.0 from 6 April 2024.
Other reminders from HMRC
- Student loans: Check that you use the correct start date and loan or plan type (as shown on the notice).
- Year-payroll: Your last FPS or EPS of the year, up to and including 5 April 2024, needs to include an indicator that you are making the final submission.
- P60s: Send out a P60 to employees by 31 May 2024.
Scottish Income Tax
From 6 April 2024 a new tax band, an Advanced rate applies: update your software.
- Loan or plan type on the notice.
Paying PAYE (Pay As You Earn)
To ensure PAYE payments are allocated correctly, always include the 13-character accounts office reference.
- If an employer wants a payment allocated to a particular tax period, they need to add four numbers to the end of the accounts office reference. To be allocated correctly, all 17 characters without any spaces should be used.
- These final four numbers advise HMRC which tax year and month or quarter the payment is for. Your clients need to include all 17 characters without any spaces to ensure the payment is allocated correctly.
- A variable Direct Debit payment option is available for PAYE. This allows HMRC to automatically collect payments based on the amount in a client’s return.
- The service can be accessed and managed through Pay employers’ PAYE — Direct Debit or directly through your clients’ PAYE online service account.
Termination payments: route to obtain clearance where there may be uncertainty about the correct tax treatment
HMRC will no longer give a binding answer on the following Termination Payment cases, outside the normal Non-Statutory Clearance process, for example, where there is a genuine point of uncertainty on the correct treatment.
- The disability and injury compensation exception.
- The foreign service exception.
- How the £30,000 threshold applies to payments made by the third party and by the employer.
- Non-cash provisions.
If you or your advisor have a genuine point of uncertainty about the Tax and National Insurance treatment of a termination payment, you should use the Non-Statutory Clearance Service.
Previously HMRC guidance advised HMRC would assist customers if they required an explanation of how certain Statements of Practice and Extra Statutory Concessions operated within the context of a termination case. These are:
- SP2/81: contributions made to a pension scheme as part of termination arrangements.
- SP10/81: the meaning of disability.
- SP13/91: voluntary payments on retirement made before 6 April 2006.
- SP1/94: clearance procedure for redundancy schemes.
- ESC A10: lump sums from overseas pension schemes.
- ESC A81: legal expenses in termination settlements.
Queries on these should now be dealt with in the same way, through the Non-Statutory Clearance Service.
EIM12800 Termination payments and benefits — contents provides comprehensive information to establish the Tax and National Insurance treatment of a termination payment.
HMRC`s current position on handling termination payment enquiries can be found at EIM12820 — Termination payments and benefits.
Off-Payroll Working: off-set of PAYE
From 6 April 2024:
- For Off-Payroll Working engagements, HMRC will be able to reduce the PAYE liability of a deemed employer, where that engagement has been incorrectly treated as self-employed for tax purposes, to take account of tax and National Insurance Contributions (NICs) already paid by the worker and their intermediary on the payments received.
- This will apply to Income Tax and NICs liabilities assessed under PAYE on or after 6 April 2024.
- See Off-Payroll Working: what's new
Useful guides on these topics
External links
