Payroll news
Employer Bulletin published THE APRIL 2021 issue of the Employer Bulletin , which can be found here: https://bit. ly/3hoqf2q, contains extensive important content relevant to employers and payroll, including: covid-19 updates and information; tax policies and consultations; PAYE; tax updates; and changes to guidance. ● Paying HMRC – The Bulletin confirms requirements when paying HM Revenue & Customs (HMRC). If paying fourteen days or more before/after the 22nd of the month, a four-digit suffix is to be added to the thirteen-digit Accounts Office reference number to indicate to HMRC the period (year/month) to which the payment relates, e.g. ‘21’ for tax year 2020/21, ‘22’ for 2021/22, followed by ‘01’for month 1, ‘02’ for month 2, and so on; thus, ‘2203’ indicates month 3 in tax year 2021/22. ● NICs category ‘M’ – From April 2021, HMRC started using generic notification service messages to contact employers if their data reported via real time information (RTI) suggests an error has occurred in using class 1 NICs category ‘M’ for an employee. The category ‘M’ grants a reduction to employer NICs for employees under the age of 21. New rules for treatment of PENP CHANGES TO the rules for calculating income tax and National Insurance contributions (NICs) on post-employment notice pay (PENP), came into effect on 6 April 2021 (https://bit.ly/33Bv1S7). The key changes include an alternative calculation for PENP for employees who have a pay period defined in months, but a contractual notice period defined in weeks or days, or where the post-employment notice period is not a whole number of months. The measure ensures that all employees’ PENP is calculated consistently on the termination of their employment. A further change aligns the tax treatment of PENP for individuals who are non-resident in the year of termination of their UK employment with the treatment for all UK residents. This measure ensures that non-residents are charged to tax and NICs on PENP to the extent that they would have worked in the UK during their notice period. The change only affects individuals who physically performed the duties of their employment in the UK. And briefly… ● CJRS claim errors – Indicating erroneous claims may have been made under the coronavirus job retention scheme (CJRS), HMRC has sent letters to 10,000 employers advising them to check the accuracy of their claims. ● Right to work checks – Although the Home Office had announced that employers had to resume conducting right to work checks in person from 17 May (https://bit.ly/2JKw6xc), this has been postponed to 21 June. ● PSA1 form – A new version of the online form ‘PAYE Settlement Agreement calculation Post 2020-21 (England and Northern Ireland)’ can be found here: https://bit.ly/3hksOCx.
NMW and sleep-in shifts guidance THE ONLINE guidance, Calculating the minimum wage , published by the Department of Business, Energy and Industrial Strategy, has been updated. The section, ‘Sleep-in’ shifts (https://bit.ly/3ohIFDC), has been revised to include commentary about entitlement following the recent Supreme Court judgment in the ‘Mencap’ case (https://bit.ly/3bDkQkD). The judgment clarified that sleep-in workers are only working and eligible for the national minimum wage (NMW) when they are ‘awake for the purposes of working’. Such workers are not entitled to the NMW when they are permitted to sleep. The position, however, is different where workers are expected to perform activities for all or most of a shift and are only permitted to sleep between tasks where possible (such as napping when not busy). In such cases, it is likely that at least the NMW must be paid for the whole of the shift, including for any time spent asleep, on the basis that the worker is in effect working all of that time. For time work and salaried hours work, the National Minimum Wage Regulations expressly require that, in order for the time spent asleep not to be eligible for NMW purposes, the employer must provide suitable sleeping facilities. If suitable sleeping facilities are not provided, the NMW must be paid for the entire shift. Each case may be different depending on individual circumstances, including what the contract provides and what is happening in practice. The new guidance provides five examples to help illustrate how the principles outlined by the Supreme Court might apply to particular scenarios. Reporting certain payments to pension recipients THE RECENTLY laid Pension (Non-Taxable Payments Following Death) (Real Time Information) Regulations 2021 (https://bit. ly/2RNpNzW) will come into force on 6 April 2022. The Regulations require certain payments made, in respect of a member of a registered pension scheme under Part 4 of the Finance Act 2004, following the death of that person, to be reported via real time information where they are not taxable as pay as you earn (PAYE) pension income. Currently, such non-taxable payments do not fall within the scope of the RTI reporting requirements.
Diary dates
Last day for submitting a real time information employer payment summary to apply to tax month 2
19 June
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.
22 June
Last day of tax month 3
5 July
First day of tax month 4
6 July
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| Professional in Payroll, Pensions and Reward |
Issue 71 | June 2021
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