Payroll news
And briefly… ● List 3 – An updated list of professional bodies and learned societies with tax-deductible fees can be found here: http://bit.ly/2ycndIT. ● SMP guidance – The guidance on GOV.UK covering entitlement rules for company directors has been revised (http://bit.ly/2woVlfS). ● OpRA guidance – The guidance on GOV.UK has been amended to reflect the changes affecting optional remuneration arrangements (OpRA) – including salary sacrifice – that came into effect April 2017 (http://bit. ly/2yxtHy0). ● ESC list – HMRC has updated the list of extra-statutory concessions to show those as at 6 April 2017 (http://bit. ly/2fvXzDD). ● CWG5 and 480 updated – The CWG5, Class 1A National Insurance contributions on benefits in kind (http://bit.ly/1oKpDEb), and the 480 booklet, Expenses and benefits – a tax guide (http://bit.ly/1JJUdUs) have been updated to reflect OpRA. ● P60 (2017/18) – HMRC has published draft certificate P60 for the current tax year (http://bit.ly/2yFj3Wa). ● NMW tick box recommended – In its report Non- compliance and enforcement of the national minimum wage , (http://bit.ly/2xIuL2O), the Low Pay Commission has recommended that a ‘tick box’ declaration is added to payroll software asking the employer to confirm that all of their staff are paid at the correct minimum wage level. Minimum wage enforcement LATE IN September, the government announced a further one-month suspension of minimum wage enforcement concerning sleep-in shifts in the social care sector, to allow the government to establish how providers’ back-pay bills affect vulnerable people’s care (http://bit.ly/2yK4y45). A new enforcement scheme is to be developed for the sector to encourage and support social care providers to identify back-pay owed to their staff. This will help to minimise the impact of future minimum wage enforcement in the sector while seeking to ensure workers receive the arrears they are owed. Until guidelines on the new approach are outlined in October, exceptional measures announced in July remain in place. In July, in response to concerns over the combined impact which financial penalties and arrears of wages could have on the stability and long-term viability of providers, the government decided to waive all historic penalties in the sector where employers incorrectly paid workers a flat-rate for sleep-in shifts instead of hourly rates.
Deemed direct payment calculations GUIDANCE IS now available on how to calculate the deemed direct payment made to a worker who provides his or her services through an intermediary (‘IR35’) and is subject to the off-payroll working rules (http://bit.ly/2xL9MhC). To calculate the deemed direct payment: ● work out the value of the payment to the worker’s intermediary, having deducted any VAT (value added tax) due ● deduct the direct costs of materials that have, or will be, used in providing the services, and ● deduct expenses met by the intermediary that would have been deductible from taxable earnings if the worker was employed. If the resulting amount is nil or negative there is no deemed direct payment. Income tax and primary (employee) Class 1 NICs, as appropriate, are calculated and deducted from the deemed direct payment. Secondary (employer) Class 1 NICs are also due. The pay and deductions must be reported to HM Revenue & Customs (HMRC) using a full payment submission. Mass exodus of public sector contractors ACCORDING TO a recent survey of 1,500 contractors conducted by online Recruiter (http://bit.ly/2xIXLY7: ● 27% of those contractors surveyed have left the public sector ● 61% left due to their refusal to work under the new intermediaries ‘IR35’ rules ● 50% say they will now never work in the public sector if caught by IR35, and 46% will only do so if the government effectively pays the extra tax. Sending employees to work abroad (CA3821) EMPLOYERS OR their agent can use the online form service or the postal form to inform HMRC that employees are being sent to work in a country within the European Economic Area or one with which reciprocal agreement for National Insurance contributions is in place with the UK (http://bit.ly/2w9bZ3g). The online service can be used if the employer has been trading in the UK for more than eighteen months, otherwise the form is completed on-screen, printed off and posted to HMRC along with additional evidence.
Diary dates
Automatic enrolment staging date for new employers where PAYE income first payable between 1 January 2016 and 30 September 2016
1 November
5 November 6 November
Last day of tax month 7 First day of tax month 8
Last day for submitting a real-time information employer payment summary to apply to tax month 6 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method
19 November
22 November
14 | Professional in Payroll, Pensions and Reward | November 2017 | Issue 35
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