PART 1: DATES, DEFINITIONS AND OBLIGATIONS
In December 2017 the Government agreed to undertake consultation in 2018 before determining if the new off-payroll working rules will extend to all external contracting. Finance Act 2019 confirmed that the new scheme would apply to all external contracting from April 2020, but this date was deferred to April 2021 as a consequence of the Covid-19 activities. As many professionals will advise, off-payroll workers payments ought to be kept separate from the mainstream payroll, for a number of reasons. Firstly, these workers are not employees for the purposes of the employment rights legislation and putting them on a mainstream payroll could result in confusion about their status and introduce a risk that at some point in the future they could force the organisation to provide full employment conditions, back-dated to the date they first were paid using the organisations payroll. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Secondly, some payroll functions do not apply to such workers, deduction of student loans for example, and keeping them completely separate can make the management of this much easier. Thirdly, many employment terms, such as holidays, sickness, pension rights, do not apply; and again management of these can be much easier if they are separate. There is more detail on this in PART2 - TAX. ONLINE FILING Following the Patrick Carter review commissioned by the Government in 2001, HMRC laid regulations that required all employers (and those running pension only payrolls) to file their End of Year returns online. End of Year Returns were defined as the P35 and accompanying P14s. The phased implementation of the regulations began with the End of Year returns due for the 2004/2005 tax year in May 2005 and was based on the following criteria. Online filing - implementation dates
Tax Year
Scheme size
2004/2005
250 or more employees
2005/2006 50-249 employees No printing, copying or reproduction permitted. Under 50 employees PAYE Schemes Each PAYE reference is classified as a scheme, not each employer. An employer may have several schemes all of differing sizes with differing deadlines. Small PAYE schemes (those with under 50 payees) were able to qualify for a tax-free incentive payment if they filed that scheme online before they were mandated to do so at the end of tax year 2009/10 (see table below). Employee counts took place each year to classify schemes. The first was undertaken based on a count on 26th October 2003, and each employer was issued with a statutory notice - The Snapshot Letter - confirming the count, against which there was a right of appeal if the employer believed it to be incorrect. This classified schemes for 2004/2005. The snapshot had to be complete by 30th November prior to the tax year for which it applied. 2009/2010
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