Employer Bulletin: April 2023

19 April 2023

The Employer Bulletin has been published by HM Revenue and Customs (HMRC). The Bulletin contains a wealth of information of interest to payroll professionals and the work that they carry out, and the CIPP recommends that it is read in its entirety.

Key items from the bulletin are highlighted below, but the full version can be accessed here.

Classification of company cars and vans for benefit in kind purposes

These is particularly important for employers/agents that need to report company vehicles on a P11D prior to the filing date of 6 July 2023.

  • guidance to help employers and agents determine classification is now available

Employer PAYE direct debits and time to pay arrangements

  • setting up a new direct debit for employer PAYE needs to be done early to make sure the payment is made on the 22nd of every month

  • agents are unable to set up a direct debit on behalf of the employer

  • the direct debit is always collected shortly after the 22nd of every month, this means that HMRC may send a notification stating that the payment is late, even if the payment is made on time. This is not a penalty, but an advisory notice and HMRC are looking to stop this from happening

  • a time to pay arrangement can be set up online by employers, who are struggling to pay and have PAYE arrears

Tax and National Insurance contributions (NIC) for termination payments

  • HMRC highlights the rules around treatment of termination payments, as a number of changes have occurred over the years

  • useful links:

           Income Tax (Earnings and Pensions) Act (ITEPA) 2003

           changes to the rules on post-employment notice pay

           changes to income tax and NICs treatment of termination  payments

           EIM12810 — Termination payments and benefits: applying the legislation

           EIM12800 — Termination payments and benefits

           Employment Income Manual

           what you pay tax and national insurance on

           corrections can be made through a full payment submission

Student and postgraduate loans

  • check the HMRC online service for generic notification service messages, as this impacts employee’s student and postgraduate loan repayments

  • the 2023/24 thresholds and rates for student and postgraduate loans are available here

Employer PAYE charge queries

  • the creation of duplicate employments for employees, where an extra employment record is created which is identical to an existing live or ceased employment is still causing an issue

  • check HMRC’s recommendations to avoid duplicate employments

Reporting expenses and benefits for the tax year ending 5 April 2023

  • HMRC has changed legislation to mandate the submission of P11D and P11D(b) returns online

  • paper P11D and P11D(b) forms will no longer be accepted

  • employers and agents who need to submit up to 500 P11D and P11D(b) returns can use the free HMRC PAYE online services

  • for the 2022/23 reporting year, the submission deadline is 6 July 2023

  • from 6 April 2023 HMRC will no longer accept paper P11D or P11D(b) amendment forms, including lists. Read the published guidance on submitting amended forms electronically

Payrolling expenses and benefits in kind

  • from 6 April 2023 employers can register to payroll benefits for 2024/25 reporting year

  • employers may still have a Class 1A NICs liability and will still need to submit a P11D(b) to tell HMRC how much employer Class 1A NICs are owed. Employers will also need to submit a P11D to show any benefits paid that were not payrolled

  • HMRC no longer accept informal payrolling arrangements, the deadline to register to payroll for the 2023/24 reporting year was 5 April 2023

  • If this deadline has been missed then employers must revert to online filing for P11Ds for the 2023/24 reporting year

Paying Class 1A NICs

  • electronic payments must clear into the HMRC account by 22 July 2023

PAYE electronic payment deadline falls on a weekend

  • this month the electronic payment deadline of the 22nd falls on a saturday. Funds should be cleared in HMRC’s account by 21 April 202 (unless paying by faster payments)

Update to ‘fix problems with payroll’

  • the updated fix problems with running payroll guidance is now available. However from May 2023, HMRC will publish further information and updates to this guidance

  • to make the relevant corrections for 2023/24, employers should still correct overpaid NICs and submit a revised full payment submission (FPS) as normal

  • customers will be able to ask for 2022/23 NICs to be checked for an overpayment. Subscribe to HMRC employer update emails

The official rate of interest from 6 April 2023

  • the official rate of interest is used to calculate the income tax charge on the benefit of employment related loans and the taxable benefit of some employment related living accommodation

  • the official rate of interest increased from 2.00% to 2.25% on 6 April 2023

Off-payroll working rules (IR35) — engaging contractors

Understanding your obligations on right to work and national minimum wage (NMW)

  • to help employers understand NMW obligations the Home Office Immigration Enforcement and HMRC are hosting a webinar on 16 May 2023 – sign up here

Other points covered are:

  • simplifying and modernising HMRC’s income tax services consultation

  • annual ‘Tell ABAB’ survey gives small businesses a big voice in the tax system – take part

  • economic crime levy - published information includes who is liable and how those affected can register

  • anti-money laundering supervision — YouTube videos to help businesses

  • changes to VAT penalties for late filing or payments

  • guidelines for compliance — help with VAT apportionment of consideration

  • businesses misusing their till systems should come forward

  • preparing for the new tax year basis — income tax self-assessment.

Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.