PAYROLL INSIGHT
Tempus fugit
Neil Tonks ChMCIPPdip, legislation manager at MHR, alerts readers to the effects of government delays in providing guidance and details of reporting changes
A s I write this, at the end of needed to include the next tax year’s requirements in our software product. This year, however, is somewhat different and our work is being made a little more difficult than normal by the delayed arrival of the information we need from government. Each year includes changes to the formats of the various electronic messages which pass between employers and HM Revenue & Customs (HMRC). These include the various elements of real time information (RTI) – the full payment submission (FPS), employer payment summary, and the earlier year update – which employers supply to HMRC, and the P6, P9, SL1/2, National Insurance number notifications etc which travel in the other direction. Each year’s changes are described in technical documentation supplied by HMRC, which also provides various testing facilities for software developers to use so that we can ensure everything is as it should be prior to the new software being made available to our clients. The date at which these documents are made available has been gradually getting later as time has passed. In the early days of RTI the documentation tended to be available in June/July. Last year it was August, which was later than before but still okay. This year, however, the RTI documentation arrived in the last week of September and the rest may not be available until early November. This is something of a problem, especially as the major change this year is the addition of the postgraduate loan start and stop September, we’re usually well on the way to completing the work
notices to the data supplied electronically by HMRC to employers, the details of which are in the documentation that might not materialise until November. That doesn’t mean that we can’t do any of the software development in advance, of course. The electronic messages are only part of the story and the rest of the functionality, such as the manual input of postgraduate loans and the calculation and reporting of the deduction, can be developed and tested in isolation with the missing pieces being slotted in at a later date. What it does mean, however, is that the new version of the software products can’t be completed until a later date than is normally the case. This may (or may not) be a problem depending on your supplier’s normal release dates. Depending on the product it might, for instance, mean the 2019–20 version being made available later than normal, or a version without the electronic notifications being made available and then needing to be upgraded later to include them. You’ll have to ask your supplier what, if any, impact all this will have to their own timescales. Incidentally, this isn’t intended to be an HMRC-bashing article – they have their pressures and priorities just like the rest of us and compromises sometimes have to be made. It’s just an illustration of the products can’t be completed until a later date... ...new version of the software
kind of things your software developer has to deal with in the process of making sure new things are supported in the way you require in time for the start of each new tax year. The later arrival of technical documentation isn’t the only thing we’ve been dealing with this year. Other decisions/indecisions of government are keeping us busy. For instance, we had the prospect last year of class 1A National Insurance contributions becoming due on termination payments in excess of £30,000 from April this year, with these being reported in the FPS and paid over monthly to HMRC. The government subsequently deferred this until April 2019 and we all breathed a sigh of relief, not least because there was no detailed guidance available on how it was all expected to work. Of course, it wasn’t long until this year came around and we needed to revisit the topic in preparation for 2019 – and there was still no guidance available. Again, the government has come to the rescue. Well, sort of. We’re now told that class 1A NICs on termination payments won’t be reported and paid over monthly from April 2019. However, it may (the government hasn’t decided yet) be payable but reported in the P11D(b) return at the end of the tax year like all the other class 1A liabilities. This, in our case at least, means we don’t have any software changes to make as the P11D(b) reporting can be achieved with existing functionality. However, employers still need to know in good time whether they will have this class 1A liability so they can plan for it. n
| Professional in Payroll, Pensions and Reward | November 2018 | Issue 45 20
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