PAYROLL INSIGHT
2018/19 – the year ahead
Jill Smith MCIPPdip, CIPP policy manager, reveals what’s coming and the impact on payroll
W ith 2018 already in progress and a new tax year fast approaching, there are plenty of changes to keep the payroll profession on their toes. Maybe not as many as in previous years, but we all know how quickly that can change. Paying HMRC online Since 13 January 2018, it is no longer possible to pay HM Revenue & Customs (HMRC) online with a personal credit card. HMRC is only allowed to accept credit card payments on the basis that there is no cost to the public purse and the EU Payment Services Directive 2 prohibits bodies from recharging associated fees back to customers. This applies to any online payments to HMRC including: ● self-assessment ● employers’ paye as you earn and National Insurance contributions ● VAT (value added tax) ● corporation tax ● stamp duty land tax ● income tax (where you have previously underpaid). Corporate, business and commercial credit cards are not affected by this change, and HMRC will continue to accept personal and commercial debit cards. Optional remuneration arrangements Well, we’ve had ten months or so bedding in the changes to legislation surrounding
benefits in kind (BiKs) in conjunction with a salary sacrifice, that came in to effect in April 2017, but if the queries from our members are anything to go by it has been a long and arduous year. ...for future years will increase in line with average earnings From April 2018, for those already voluntarily payrolling company cars as a BiK, it will be mandatory to submit car data information in the full payment submission returns. Those employers providing company cars (and are not voluntary payrolling them as BiK), can continue to process in the normal way via P11D and P46 (Car) returns. Bear in mind that the ‘amount foregone’ is only the part of the salary sacrificed amount that relates specifically to the taxable car. It does not include the amount sacrificed for payments and benefits associated with taxable cars, such as a servicing package. You should therefore apportion the full amount of the salary sacrifice (or cash allowance) between the taxable car and the tax-exempt benefits. Student loans The Department for Education confirmed in October 2017 that there would be
a threshold change for student loan borrowers in the current income contingent repayment scheme. So, from 6 April 2018 the threshold for: ● plan 1 loans will rise to £18,330, and ● plan 2 loans will rise to £25,000. The £21,000 repayment threshold for plan 2 student loans was to be fixed until 2021. However, it seems the government have realised that they won’t be getting in as much money as they first thought and perhaps in a bid to attract student voters has now reversed that decision. The earnings threshold will be increased to £25,000 from 6 April 2018, and for future years will increase in line with average earnings. The new threshold will apply to those who have already taken out and will take out loans for tuition and living costs for full-time and part-time undergraduate courses in the post-2012 system and those who took out or will take an advanced learner loan for a further education course. On 6 April 2018, the upper threshold will rise to £45,000 from £41,000. Both the repayment and variable interest thresholds will be adjusted annually in line with average earnings thereafter. Scottish income tax The Scottish draft budget published on 14 December 2017 proposed a new 19p starter rate of tax, freezing the basic rate at 20p. In addition, a new intermediate rate of 21p was introduced and a 1p increase
| Professional in Payroll, Pensions and Reward | February 2018 | Issue 37 20
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