UK PAYROLL UPDATE - JULY 2019
P11Ds and P11D(b)
Just a reminder that P11ds should have been filed to HMRC by 5th July. Class 1A NIC due on provision of benefits in kind needs to be paid to HMRC by 22nd July (if paying electronically). If you payroll benefits you still need to file a P11D(b) declaring the Class 1A NIC liability and ensure this is paid by 22nd July.
STUDENT LOAN AND POSTGRADUATE LOANS
As we now have 2 rates of Student Loan Deductions plus Postgraduate Loan deductions it is important to let us know what type of loan your new employees have. The new HMRC Starter Checklist is the best thing to use
but if you have your own starter forms please ensure it asks the same questions as page 2 of this one. If your new employee gives you a P45 which states to continue deducting student loan we also need to be advised as to which loan plan they are on. BACS REPORTS – Don’t put employee payments at risk
For any clients that pay by BACS – please ensure you are downloading and checking your reports each month. Reports should be checked on BACS day to ensure that limits have not been exceeded - if they have you would have to contact your bank to ensure your employees are paid on time. You should also regularly check for AWACS reports – these are where either employees have changed their bank account and left it up to the bank to inform everyone, or the bank themselves have changed a sort code or account number. BACS will match the payments with the account details we have supplied but they do expect employers to download the reports and pass them to us so the correct details are applied to future payments.
ETHNICITY PAY GAP REPORTING
Hot on the heals of Gender Pay Gap Reporting the government are now considering mandatory reporting of ethnicity data.Currently only employers with over 250 employees are required by law to publish annual Gender Pay Gap figures but it is recognised that many smaller employers do this on a voluntary basis.
For ethnicity reporting it is being suggested that listed companies and all businesses and public bodies with more than 50 employees should publish 5 year aspirational targets and report against these annually.
The government is currently considering responses to a recent consultation on this so watch this space for further updates.
TIPS AND TRONCS
Part of the government’s response to the ‘Taylor review of modern work practices’ was a pledge to ‘legislate to ban employers from making deductions from staff tips’ other than those required by law.
Recent research carried out by the Chartered Institute of Payroll Professionals (CIPP) showed that there are generally four ways tips are treated by employers (assuming the tips are not just given as cash in hand).
1.Employer keeps everything
2.Employer keeps 10% of total receipts
3.Employer passes all to employees through normal payroll
4.Tronc system is in place
To ensure that money left in good faith by customers is paid in accordance with their intentions and with most employees in the hospitality sector being paid minimum wage a Tronc system is the fairest way for this to be managed. As there is no liability for NIC on a Tronc PAYE scheme any employer costs for tips left on credit cards will be offset by the saving in Employer NI.
IN-YEAR TRIGGERS FOR TAX CODES
The final part of the Making Tax Digital Dynamic Coding exercise went into live testing in April. This compares the tax code held on HMCR systems for an employee in a particular employment against the latest RTI return sent from the payroll system.If there is a difference the system will look at:
Are the tax codes for the same employee?
Was a code issued by HMRC in the last 60 days?
Are the correct suffix and Wk1/Mth1 criteria being used?
Have Welsh or Scottish rates been applied?
If the codes do not match a new calculation will be performed and new codes issued if required.
Employers must carry out re-enrolment every three years. This involves putting any staff who opted out of the pension scheme back in (they can opt again if they decide to).
Employers must also complete and submit a re-declaration of compliance to show the Regulator how they have met this obligation.