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• pay as you earn (PAYE) information for the current year plus the four previous tax years • employment records, including time in employment, taxable benefits and any gap where no record is held by HMRC • income record • state and private pension information.
As an agent, you can read more on the topic on the GOV.UK site and ensure deadlines are met. It’s also useful to check HMRC’s current performance and service levels .
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Employment Income Manual update: negative taxable earnings Published: 6 January 2023 Emailed: 11 January 2023
A new section has been added to HM Revenue and Customs’ (HMRC’s) EIM00805 page of the Employment Income Manual (EIM).
The section added states:
“The Martin case also established that when a payment or bonus is ‘clawed back’ and a payment of negative earnings is made from employee to employer, this does not change the position of NICs or PAYE deductions for the original payment. No relief or repayment of NICs is possible. In these circumstances it is not necessary for the employer to make any changes to their RTI submissions. Taxpayers should contact HMRC directly to claim any tax relief due in the year the payment of negative earning s was made.” This case revolves around a “signing bonus” that was required to be returned when leaving with in the period agreed in the contract. This amendment clarifies HMRC’s interpretation of the rules to be applied in this situation when negative earnings occur.
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Group Income Protection policies and OpRa Published: 6 January 2023 Emailed: 11 January 2023
Occasionally HM Revenue and Customs (HMRC) gets something wrong and they are required to correct guidance and advice to stakeholders. In this case, it has corrected guidance pertaining to the tax treatment of sick pay funded by salary sacrifice arrangements into a Group Income Protection (GIP) policy. Some employers may provide funds for sick pay directly, or through an insurance policy (GIP). Whichever method is used, the sums paid to employees are taxable as earnings within section 62 or section 221 of Income Tax (Earnings and Pensions) Act (ITEPA) 2003.
The guidance (IPTM6120) now correctly states:
“ Amounts funded by way of a salary sacrifice under OpRA by the employee do not qualify as an employee contribution to premiums. The employee is no longer entitled to the salary foregone so while the employer may use the salary foregone to fund the scheme this would be an employer contribution, not an employee contribution – see EIM06470 onwards.”
Therefore, payment made to an employee from a GIP policy would be seen as employer funded and as such will be taxable in full under section 221 ITEPA 2003.
However, as previous guidance was incorrect, HMRC recognises that this will have been relied on by employers and as such has set up a transitional approach to enforcement. They will not seek to revisit cases where the guidance was relied on. Examples given in the EIM are:
• where sick pay payments were made to employees or former employees without deduction of tax between 15 October 2019 and 31 December 2023 inclusive to the extent that they are (or are derived from) amounts that
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