Payroll insight
Dancing around the new joiner question
Steven Tucker, managing director at T he Payroll Site Ltd, discusses the starter checklist and offers an alternative to the official version
T he starter checklist asks this question: “Did you finish your studies before the last 6 April?” New employees are directed to answer that question even if they’ve never had a student loan – which raises the question of which kind of studies count? Apprenticeships? Evening classes? Ballroom dancing lessons? Nobody wants to get the answer wrong accidentally and make a false declaration on a HM Revenue & Customs (HMRC) form. ...employee is supposed to know whether the loan is due for repayment and to tell the employer... When someone starts work without having a form P45 from a previous job, the new employer needs to know the employee’s situation in order to work out the right tax code and student loan deductions. HMRC has a form – the starter checklist (http://bit.ly/1QTBEVV) – which is meant to make this easier. The starter checklist replaced an older form – the P46 – but the tax-related questions on the two forms are similar. The main difference is that the starter checklist now caters for two types of student loans, so this section expanded from one question to four. There are two versions of the starter checklist: one for completion online and another for printing and filing out the old- fashioned way. It takes two to use a starter checklist:
Once the employee has completed the form, it passes back to the employer who must choose, based on the answers given, whether to deduct a Plan 1 student loan, a Plan 2 student loan, or neither. The guidance about this on www.gov.uk is far from clear. It currently says an employer should make student loan deductions if “your new employee tells you they’re repaying a student loan”, but it doesn’t specifically mention the relevance of the fourth student loan question about when studies ended. Some cases are simple. It is obvious, for example, that someone who doesn’t have a student loan shouldn’t be repaying a student loan, even if they are taking salsa classes. A less obvious example is a joiner who has just graduated. A student loan isn’t normally due for repayment until 6 April after the end of the course, so if the employee didn’t finish the course before last 6 April, the employer shouldn’t deduct repayments. Strictly speaking, the student loan repayment rule – which is given in regulations 15(2) and 43A of the amended version of The Education (Student Loans) (Repayment) Regulations 2009 (http://bit. ly/2mpgCE0) – is more complicated than this. The employee is supposed to know whether the loan is due for repayment and to tell the employer – so employers don’t need to know all the repayment rules. There is no obligation for employers to use HMRC’s starter checklist. We’ve created an alternative starter checklist (http://bit. ly/2mmSaRS) which we think is easier for both employee and employer. Printing and completing it is a matter of a few, quick steps. n
Starter checklist
Instructions for employers This Starter Checklist can be used to gather information about your new employee. You can use this information to help fill in your first Full Payment Submission (FPS) for this employee. You need to keep the information recorded on the Starter Checklist record for the current and previous three tax years. Donot send this form toHMRevenue and Customs (HMRC) . Instructions for employees As a new employee your employer needs the information on this form before your first payday to tellHMRC about you and help them use the correct tax code. Fill in this form then give it to your employer. Donot send this form toHMRC .
Employee’s personal details
Lastname
1
Home address
5
Firstname(s) Do not enter initials or shortened names such as Jim for James or Liz for Elizabeth
2
Postcode
Country
National Insurancenumber (if known)
6
Are youmale or female?
3
Male
Female
Employment start date DDMM YYYY
7
Date of birth DDMM YYYY
4
Employee statement
8 Youneed to select only one of the following statementsA,B or C
This ismy first job since last 6April and I have not been receiving taxable Jobseeker’s Allowance, Employment and SupportAllowance, taxable Incapacity Benefit, State orOccupational Pension.
A
This is nowmy only job but since last 6April I have had another job, or received taxable Jobseeker’sAllowance, Employment and SupportAllowance or taxable Incapacity Benefit. I do not receive a State orOccupational Pension.
B
Aswell asmy new job, I have another job or receive a State orOccupational Pension.
C
Please turn over >
Starter checklist
Page 1
HMRC 04/16
25
Issue 29 | April 2017
| Professional in Payroll, Pensions and Reward |
Made with FlippingBook - Online catalogs