Payroll insight
Tax code changes in real time Data submitted through the RTI process is used extensively to the benefit of government. However, the basis of pay as you earn (PAYE) did not change but remained as a system that saw tax deducted at source and a payment made resulting in most employees paying the correct amount by the end of the tax year. ...‘real time’ tax code changes were introduced initially from April For approximately 8,000,000 individuals, the close of the tax year would result in P800 notifications being issued that reveal amounts of income tax owing or due for refund. Depending upon the amount owed by the taxpayer, the tax code was the vessel used to collect the tax due, through the PAYE system, in the following year.
years ending 5 April 2018 and earlier, will still need the submission of an EYU return, which means payroll software must retain this functionality, with HMRC guidance making this need clear. Though this will not bring an end to the occurrence of duplicated payments, it is hoped that resolving them, if they occur, will become a little easier as a result of HMRC’s welcome course of action. Starter checklist In recognition of the postgraduate loans (PGL) coming in to repayment from 6 April 2019 the starter checklist (which is built in to payroll software) has been updated to allow the employee to confirm if they have both plan 1 and plan 2 student loans and if they have a PGL. HMRC will issue a notice SL1 or PGL1 to confirm or instruct an employer to begin making deductions as required. Notice PGL2, which instructs cessation of PGL deductions, is also a new addition to the growing ‘library’ of electronic forms. The P45 form has not been updated to take account of the PGL, but the P60 certificate will be, as the PGL will run concurrently to plans 1 and/or 2.
initially from April 2017. HMRC provide periodic updates to help employees and employers to understand the impact of this change. In a recent update, HMRC confirmed that in a bid to minimise any possible hardship to affected taxpayers, where HMRC become aware of the additional taxable income between 6 January 2019 and 5 April 2019 and the amount of tax due in the current year is affected, HMRC will adjust the tax code, but only start to collect the tax from 6 April 2019, to make any tax changes more manageable for the taxpayer. n Though we know that the first ‘port of call’ is quite often the payroll team when an employee is concerned about their tax code, in line with its digital strategy – which has stuttered a little, due in no small measure to the Brexit impact – HMRC recommends that employees look to their personal tax account in the first instance. However, we value hearing from members about their day to day experiences, so please email us on policy@cipp.org.uk .
Government digital strategy put pressure on HMRC, and ‘real time’ tax code changes were introduced
P11D, expenses and benefits
One day
Designed to give delegates clarity and confidence about how to process the P11D, P11Db forms, PAYE Settlement Agreements (PSA) and net to gross calculations.
This course covers: ● Statutory requirements and implications ● Common errors when calculating company cars and fuel ● Childcare ● Beneficial loans ● Relocations ● Travel and subsistence expenses
● Vouchers / credit cards / tokens ● Gifts and awards ● Retirement benefits ● Salary sacrifice and tax / NICs changes from April 2017 ● Flexible benefits schemes ● Pay As You Earn (PAYE) settlement agreements ● Taxed award schemes ● Grossing up from net payment
● Other expenses ● Entertainment ● Telephones ● Subscriptions
● Key forms and dates ● Penalties and fines
Book online at cipp.org.uk or email info@cipp.org.uk for more information.
cipp.org.uk CIPP_UK cip .org.uk @CI P_UK
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| Professional in Payroll, Pensions and Reward |
Issue 47 | February 2019
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