The Chartered Institute of Payroll Professionals
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If an employer cannot amend their RTI returns, they have the option of submitting a written claim. In addition to the evidence above, they will be required to provide reference of the RME and the reasons as to why the amendments can’t be made through the R TI process. Employees If an employee believes they are due a refund, they must liaise with their employer in the first instance. If the employer has claimed, they will repay any overpaid NICs due to the employee. If the employer hasn’t applied for a refund, employees need to provide the following (on a pay period-by-period basis):
•
evidence of the number of business miles
• amount of car allowance payments they have received • information regarding any other RME payments they have received, e.g., any mileage payments received at less than the HMRC approved rate • the primary class 1 NICs being reclaimed • the reason their employer isn’t applying for this refund on their behalf.
HMRC will then follow the usual process for claiming a NICs refund.
Important links
•
HMRC’s Agent Update issue 114
• November’s issue of Professional magazine • Statutory milage rates • Guidance on qualifying vehicles • Further information about payroll errors and correcting pay or deductions • Guidance on claiming an NI refund
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National Insurance contribution (NIC) changes coming into effect from 6 January
Published: 3 January 2024 Emailed: 3 January 2024
The main rate of class 1 employee NICs will be reduced to 10% from 6 January 2024. This mid tax year change takes shape in a 2-percentage point decrease.
Employees whose employer (or the employer’s payroll service provider) can make the relevant changes to their payroll system in time, over an already busy festive period, will benefit from the reduced rate of NI from January.
For those employers and service providers who don’t amend their payroll system in time for the January changes, they will be able to reimburse the overpayment of NI to employees in subsequent months.
Some key things to consider: • ensure your software is up to date, and carry out some test runs to ensure changes have been made • if using HM Revenue and Customs (HMRC’s) Basic PAYE Tools, ensure you are using the most recent release • directors who have left within the 2023/24 tax year will need their NICs recalculated to take the blended rate of class 1 NICs into consideration • directors who remain in employment and have their NICs calculated using the alternative method, will need to be changed to the cumulative calculation in their final pay period of the tax year, to ensure their NICs are calculated using the blended rate.
For more information on the blended rates to use for directors, please refer to our previous news article here .
cipp.org.uk
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