UK Payroll News - October 2018
Updated: Aug 6, 2019
TAX FREE CHILDCARE
Salary Sacrifice Child Care Voucher (CCV) schemes closed to new members from 4th October 2018. Existing members will be able stay in their scheme if the employer keeps it open.
There is a new tax-free childcare scheme provided by HMRC which employees apply for directly at https://www.gov.uk/apply-for-tax-free-childcare . This provides eligible families with an additional 20% towards their childcare costs up to a value of £2,000 per child per year (£4,000 is the child is disabled). To qualify for the new scheme both parents must work a minimum of 16 hours per week and receive at least the National Minimum Wage. If one parent earns in excess of £100,000 the couple will not be eligible.
It has been confirmed that the Government still intends to impose Class 1A National Insurance liability on the taxable part of termination payments but an implementation date has yet to be agreed. This means that if it is implemented at any time in the 2019/20 tax year it cannot be reported via the FPS so will instead be an annual charge to be reported and paid via the P11D(b) along with charges for benefits. Employers will need to ensure that they keep adequate records of all termination payments made so that they can calculate the Class 1A NIC liability at year end if required.
TAX RELIEF ON EMPLOYEE PAID EXPENSES
When PAYE tax payers spend their own money on various business expenses (such as fees and subscriptions, replacing / repairing tools or washing branded uniform) they may be able to claim tax relief. Of the flat rate expense claims that HMRC receive, an average of 85% of customers use an agency which charge fees to make the claims. However, by using a simple and straightforward online tool at https://www.gov.uk/tax-relief-for-employees taxpayers will receive the full tax relief they are entitled if their claim is approved.
If you have employees who may need further information just let us know as we have some HMRC posters available for different sectors.
As a BACS bureau we pay many clients payrolls directly through the BACS system which is a safe, secure and time efficient way of making payments. As agents though, we do not have access to the exception reports that may be generated as a result of us sending a payroll file. These reports (normally AWACS or ARACS reports) need to be regularly reviewed within your organisation on a regular basis and passed to us for action.
If you are going to payroll benefits to avoid the P11D process from April 2019 you must register with HMRC before the end of the current tax year.
HMRC will then strip out any benefits from employee tax codes for the new tax year. Benefits can then be taxed through the payroll ensuring that tax is paid in real time and making it more transparent for employees.
AUTO ENROLMENT PENSIONS RATE CHANGES
Just a reminder that the statutory minimum contributions to Auto Enrolment Pension Schemes increase again from April 2019.
Current minimums are;
Employer 2%, Employee 3%, Total 5%
From April 2019 these will increase to
Employer 3%, Employee 5%, Total 8%