COMPLIANCE
Endings and beginnings
SamanthaMannMAATMCIPPDip, CIPP senior policy and research officer, outlines some key issues towatch out for in April
R eal time information (RTI) was sold to us on the understanding that we would see the end to the onerous tax year end process. Research carried out previously identified that this was a burden for employers – particularly small- to medium-size enterprises. In reality, and from a tax year end process perspective, we simply said goodbye to the P14 return (two copies) and the P35 employer annual return. (Am I the only person who still misses these reliable and transparent forms?) The close-down of one tax year, in preparation of beginning a new tax year still remains. Depending upon how the payroll process is designed within your organisation – whether in-house or outsourced, large or small, serving a small or large number of employees – you will be preparing yourself now for creating the final full payment submission (FPS) and starting a new tax year. P60 certificates What didn’t disappear with RTI was the need for employers to provide their employees with a P60 end of year certificate, which can be provided on paper or distributed in electronic/online format. The employer must provide certificate P60 for the tax year to all employees who were in employment with them at 5 April. The document, which should be issued to the employee no later than 31 May, shows: ● personal details – surname, forename,
National Insurance number, and payroll number ● total pay and tax deducted, shown separately for previous employment and current employment during the tax year ● tax paid for the tax year – in previous and current employment ● final tax code ● employee National Insurance contributions (NICs) paid on earnings above the primary threshold (PT) ● NIC table letter(s) applied (there may be years where more than one entry is needed) ● breakdown of NICable earnings: ❍ at the lower earnings level where this is reached ❍ earnings above the LEL up to and including the PT ❍ earnings above PT up to and including the upper earnings level (UEL) ● statutory payments made which includes spaces for statutory maternity pay, statutory adoption pay, statutory shared parental pay and statutory paternity pay ● student loan deductions – both plan 1 and plan 2 (if applicable) ● from 2019/20, postgraduate loan deductions ● employer address and pay as you earn (PAYE) reference. It’s important for the employee to retain the P60 certificate. Although duplicate copies of the certificate can be provided by the employer, the importance of this document being stored safely should be stressed as it confirms what tax has been paid.
This time next year, if all goes to plan, the P60 will also include space to report statutory parental bereavement pay. P46(Car) If you provide employees with ‘company cars’ and regularly submit P46(Car) returns you will be aware that the deadline for submitting these for the final quarter of 6 January to 5 April is 5 April for the electronic form and 3 May for the paper form. Many employers continue to miss the 5 April deadline. Impact of a delayed Budget At the time of writing, time is ticking slowly towards the Budget of 11 March and so we haven’t, as yet, received any confirmation of rates and thresholds for the 2020/21 tax year. I have my fingers firmly crossed that there won’t be any short-term shocks for us to grapple with. From my discussions with software developers I am confident that they are, as ever, ready for any eventuality. Although new tax year software has already been issued, it wasn’t so many years ago that we routinely had upgrades that accounted for changes to tax allowances and rates that had to be applied after the start of the new tax year. I have it on good authority that old processes have been dusted down, in the event that they may be needed. Two changes towatch out for Whilst there are still many unknowns ahead of us for the new tax year, there is much we do know, even allowing for the political upheavals of recent months. Amongst them are the following.
...space to report statutory parental bereavement pay
| Professional in Payroll, Pensions and Reward | March 2020 | Issue 58 30
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