The Chartered Institute of Payroll Professionals
News On Line
Electronic Payment Deadline A reminder that the August deadline falls on a Sunday, therefore employer PAYE payments must be paid by 20 August 2021. Informal Payrolling of Benefits In Kind In the February addition of the HMRC bulletin, HMRC said it would “no longer accept informal arrangements.” The August edition provides clarity that only new informal payrolling arrangements will be accepted in this tax year and can only be in place for a maximum of one tax year.
Businesses who previously had an informal payrolling arrangement are expected to register for formal payrolling before April 2022 for the 2022/23 tax year.
Off Payroll Working (IR35) The employer bulletin highlights resources, including links to videos, webinars and guidance to direct readers to tools that may help employers to understand and comply with the rules. HMRC also urge caution on arrangements labelled as ‘contracted out services’ and encourage employers to be we ary of claims that state they do not need to consider the off-payroll working rules.
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Payrolling benefits: information to give to employees 16 August 2021
HMRC guidance on the subject of payrolling benefits explains the information that needs to be given to employees. Once an organisation has registered to payroll benefits, they are required to provide their employees with written notification explaining that they are payrolling benefits and the implications this could have for them. This can be done by payslip, email, or letter. The notification must be sent by 1 June after the end of each tax year and must advise employees that they will not be taxed twice. This is because the organisation registered with HMRC to payroll their benefits prior to the start of the new tax year.
The following information should be included:
• Details of the benefits that have been payrolled – for example, car fuel – this can include what the benefits are, their value, the cash equivalent and which ones have been subject to PAYE tax • The amount that has been payrolled for Optional Remuneration (OpRA) • Details of any benefits that have not been payrolled
Employees should also be advised of what will happen during the first year. They will need to be aware that:
• Their tax code will change to take out the adjustment for their benefits in kind • An adjusted amount will be processed through payroll each pay period, and tax will be applied to that amount • At the end of the tax year, they will be told how much taxable benefit they have had in the year and what it was for
New employees
Where there are new employees with payrolled benefits, they must be advised how the benefit will be taxed. They must be informed that: • Their tax code may be amended to adjust any benefits from previous employments • The new benefit will not be included within their tax code • Any underpaid tax they may be paying through their existing tax code will still be collected through their tax code
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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