Payroll news
DEA guides revised THE DEPARTMENT for Work and Pensions (DWP) has updated its guidance for employers on operating direct earnings attachments (DEAs). The Guide for employers can be found at http://bit.ly/2FA7PWx; and the More detailed guide at http://bit.ly/2DPQzfj. Recent changes reflected in the guidance include: ● the new contact number 0800 916 0614 that employers can use to enquire about a DEA, and to make payments by debit card ● a declaration form that employers must complete and submit to DWP prior to sending DEA payment schedules by email. The payment schedule (a Microsoft Excel spreadsheet) and the email address to be used will only be supplied to the employer on DWP receiving such a declaration. Judge Thomas also contrasts tax law provisions with social security law. He comments that section 2 of the Social Security Act 1998, “…envisages that in social security matters a decision can be taken by a computer, as it gives authority for that to be done in cases where legislation requires the Secretary of State or an officer acting under his authority to make the decision.” It is understood that HMRC is not appealing this decision. Automatic tax penalties potentially illegal A RECENT decision of the First-tier Tribunal (Tax Chamber) has challenged the validity of a £100 penalty imposed not by an officer of HMRC but automatically by computer. Automatic penalties can arise for various reasons. In Khan Properties Ltd v HMRC (http://bit.ly/2rZblYo), judge Richard Thomas held that a penalty imposed for late submission of the company’s tax return was cancelled because “there was no valid determination of the penalty, or if that is wrong, the appellant had a reasonable excuse for filing on time.” Section 100 of the Taxes Management Act 1970 (TMA) states that “…an officer of the Board authorised by the Board for the purposes of this section may make a determination imposing a penalty under any provision of [TMA] and setting it at such amount as, in his opinion, is correct or appropriate.” Judge Thomas states that “In my view the requirement in s 100(1) TMA is for a flesh and blood human being who is an officer of HMRC to make the assessment, that is to decide to impose the penalty and give instructions which may be executed by a computer…”, adding that “That officer should be named in the [penalty] notice otherwise the recipient will not know to which officer to address the appeal as required by … TMA.”
Revised Scottish income tax proposals
SCOTLAND’S FINANCE secretary has confirmed that, following publication of the Scottish Government’s tax proposals for tax year 2018–19, an anomaly that would have meant some higher rate tax payers saw their tax bill fall while others on slightly lower incomes saw a rise, would be removed by amending the change in the higher rate threshold.
Income bands
Rate 19% 20% 21% 41% 46%
£11,850*–£13,850 £13,851–£24,000 £24,001–£43,430 £43,431–£150,000**
Above £150,000 **
And briefly… ● P11D working sheets – Updated versions of P11D return working sheets 2b and 4 for tax year 2017–18, can be found at http://bit.ly/2BJcWRI. ● Modified EP schemes – Amended forms for applying to HM Revenue & Customs (HMRC) to set up modified EP Appendix 6 (http://bit. ly/2E7xc4S) and EP Appendix 7A (http://bit. ly/2DShknf) schemes should now be used to avoid delays. ● Issue of P6 coding notices – On 31 January HMRC paused issuing P6 tax coding notices to allow for investigation and resolution of an issue. On 1 February, HMRC resumed issuing P6 coding notices, and announced that all P6 notices which were held would be released in date order over the following three to four working days. ● Compliance checks – HMRC’s factsheet General information about compliance checks CC/FS1a (http://bit.ly/2nrZDRm) has an updated ‘More information’ section that explains what information HMRC may use when dealing with compliance checks. ● Money laundering – HMRC has updated anti-money laundering draft guidance, adding 2017 content and removing that for 2008. The Consultative Committee of Accountancy Bodies draft guidance 2017, which can be found here: http://bit.ly/2DRMaIS, will be finalised on approval by the Treasury. * Assumes individuals receive the standard UK personal allowance. ** Those earning more than £100,000 will see their personal allowance reduced by £1 for every £2 earned over £100,000.
Diary dates
5 March
Last day of tax month 11
6 March
First day of tax month 12
Last day for submitting a real time information employer payment summary to apply to tax month 11 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method Weekly rates of SMP, SAP, SPP, SShPP increase from this date Upper and lower limits of qualifying earnings thresholds for AE increase
19 March
22 March
1 April
5 April
Last day of tax month 12 and tax year 2017–18
| Professional in Payroll, Pensions and Reward | March 2018 | Issue 38 16
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