Payroll insight
number of P800 notices that are issued after the close of the tax year. The P800 notices provide a reconciliation for any amounts that may be owing or may be due to be repaid to individual tax payers who have been paid and taxed through the pay as you earn (PAYE) system, particularly those who may have benefits in kind or more complex tax affairs (multiple jobs, pension income etc). The forum looks at the affected communications that need to be updated along with the actual P800 to ask whether, as designed, they remain fit for purpose as HMRC look to adjust tax codes in year to prevent that end of year glut of P800 activity. Letters to affected individuals – particularly the small number who in the 2017–18 tax year are likely to be taking a double hit of income tax: once for the 2016–17 adjustments and twice for 2017–18 in year adjustments – have been drafted that aim to explain why this has happened. Personal tax account The personal tax account (PTA), which we are assured we all have (we just need to access it), will be key to the successful delivery of transformation. Individuals will need to engage with their PTA if MTD is to be a success. Two key drivers for the increased numbers of take up for the PTA have been the tax repayments service and the pensions forecast service. The government aspires for tax payers to be accessing their PTA on a regular basis and making this tool, where possible, a first choice for communicating with HMRC. Consultations Six consultation papers were published in the late summer of 2016; later than planned and together with many other consultation papers, so you would be forgiven if you missed them. Whilst all have the potential to impact our professional or private lives in some way, there were two particular papers that the team focussed on: ● Making tax digital: Transforming the tax system through the better use of information (http://bit.ly/2cwLHia) ● Making tax digital: Tax administration (http://bit.ly/2nh2yto). From an employer perspective we
rejoice that at last we will begin to see all of our hard work coming to fruition; after all, we have been submitting our payroll ‘returns’ in real time for some years now. For that information to be used in as near real time as possible by HMRC and government to make our lives easier would be very much appreciated. ...rather like stopping a big ship in an emergency: it takes time and isn’t always successful Penalty processes fit for the 21st century HMRC is currently consulting on three proposals that have been put forward in their latest consultation which is open for responses until 11 June 2017. The consultation – Making Tax Digital – sanctions for late submission and late payment (http://bit.ly/2nVD05Q) – seeks views on three possible models for late submission penalties and provides an update on penalty interest. To appreciate full details we urge you to read the consultation paper and see how the illustrations might (or might not) affect you. In brief, the three possible models comprise: ● Model A: Points-based penalty – Under this model the customer would incur a point each time they fail to provide a submission on time. When the points reach a certain threshold they would become liable to a penalty. ● Model B: Regular review of compliance – Under this model HMRC would carry out an automated review that looked at the customer’s compliance with their submission obligations after a set period of time and would take into consideration the number of failures when calculating the amount of any penalty that is charged at the time of the review. Because the review is periodic in nature it could also take account of the duration of failures. The review would be carried out tax by tax. We have heard anecdotally from agents and employers about instances where client dashboards appear to show
numbers and amounts that bear no relationship to the FPS submissions at some point during the tax month – and then, if all goes well, the amounts ‘come good’. And so we have to ask, at what point would HMRC carry out an automated view and would it indeed be truly reflective of a customer’s compliance? Considering your experience of successfully appealing late filing or late payment penalties, what would your concerns be about ensuring that your record of compliance as viewed by HMRC is accurate? ● Model C: Suspension of penalties – This model gives the customer the opportunity to avoid having to pay a penalty by providing a late submission. Put another way, it provides an opportunity for the taxpayer to correct their tardiness and then require HMRC to recognise and reward good compliance. As a result of MTD transformation, individuals caught under self-assessment will be required to make quarterly submissions or ‘updates’ and an end of period statement (sounds rather like RTI does it not?) and so the opportunity for missing deadlines and making late submissions will be increased. Will MTD be easier? The jury is still out in my view as to whether MTD will ultimately prove to be easier for the tax payer, but no one can argue that government and the UK tax administration don’t need to modernise and become more 21st century friendly. For me, the transformation required of government to make MTD work for all – because what happens within HMRC inevitably will ripple out to all areas of government – is rather like stopping a big ship in an emergency: it takes time and isn’t always successful. However, HMRC is committed to consulting with all affected stakeholders, employers, businesses, professional bodies and individuals, both in person and in written form and we would encourage you to get involved. ■ As ever the policy team value your feedback as to your experiences with your PTA or your employees’ use of their PTA, or indeed any aspect of MTD transformation, emails are welcome to policy@cipp.org.uk .
21
| Professional in Payroll, Pensions and Reward |
Issue 30 | May 2017
Made with FlippingBook - Online catalogs