COMPLIANCE
Employers’ year end reporting 2024
David Yewdall, partner and Lewis Howarth, senior manager at BDO UK LLP, outline some of the key challenges you may not have considered for employers when completing year end reporting F ollowing the end of the 2023/24 tax year, employers need to consider their year end compliance. manner. A number of these areas require the leadership and support of payroll professionals working in collaboration with broader teams to ensure these obligations are met in a timely manner.
considerations for employers with an international workforce.
Reward and recognition Employers are becoming increasingly innovative when it comes to rewarding employees. This has arisen due to shifting employee priorities, particularly when it comes to focussing on health and well- being, which have become of increasing importance as employee demographics have changed. As employers adapt to these demands, the types of benefits they provide, as well as the way they’re provided to employees, is evolving. As this evolution takes place, it’s common for new benefits / rewards to be provided, without due consideration of the subsequent tax and reporting obligations. Furthermore, due consideration needs to be given as to who stands to pick up any arising income tax and National Insurance contribution (NIC) liability. Please refer to Table 2 for an overview of the key year end reporting requirements for employers with both formal and informal reward offerings. n
You still have time to meet some of the deadlines discussed, but where they have already passed and you haven’t met a deadline, this is something for you to consider for next tax year end. In today’s world, organisations face additional challenges in managing these year end obligations, usually owing to one or more of the following: l an increased focus on dynamic commercial growth over day-to-day compliance l the absence of staff with employer reporting expertise l complex group structures resulting in challenges in oversight and accountability for reporting l a desire to reward employees and provide flexibility with how / where they work. There are some key challenges employers experience, and must consider, when completing year end employer reporting in a timely and efficient
International workforce With the lifting of travel restrictions
following the Covid-19 pandemic, there’s been a significant return to employee travel cross-border for business purposes. While this is a positive from a commercial perspective, allowing global teams to come together and work collaboratively, this can give rise to numerous employer reporting obligations. Many of the reporting obligations which arise require thorough record-keeping. Whether tracking travel, documenting trip purposes or understanding assignment policies /processes, employers must ensure they’re aligned internally, something which often requires collaboration between different internal / external stakeholders. Please refer to Table 1 for an overview of the key year end reporting
Table 1: Year end reporting considerations for employers with an international workforce
Informal short-term travellers to the UK
Reporting deadline
EP Appendix 4 – short-term business visitors (STBVs) While in many cases, no pay as you earn (PAYE) income tax or NIC liability arises for STBVs, employers must understand travel patterns, along with the purpose of the trip and report this information to HM Revenue and Customs (HMRC). EP Appendix 8 - PAYE special arrangement for STBVs Where STBVs don’t qualify under EP Appendix 4, meaning employers are required to file a return to settle any United Kingdom (UK) income tax liability.
31 May following the end of the tax year
31 May following the end of the tax year
Formal UK outbound assignments
Reporting deadline
EP Appendix 5 – net of foreign tax credit relief This applies to employers required to deduct foreign tax, in addition to UK PAYE, from the salaries of employees who are sent to work abroad.
The end of the tax year
EP Appendix 7B Modified class 1 NICs for employees assigned from the UK to work overseas.
31 March following the end of the tax year
Formal UK inbound assignments
Reporting deadline
EP Appendix 6 Applies to employers that have agreed to operate PAYE on a gross-up of cash earnings and non-cash benefits for all employees eligible who have undertaken with the employees to pay any residual UK liability on earnings based on each employee’s self-assessment.
Payment deadline – 22 April following the end of the tax year (19 April if by post)
EP Appendix 7A This is the class 1 / 1A NIC equivalent for employees included on the EP Appendix 6.
31 March following the end of the tax year
| Professional in Payroll, Pensions and Reward | June 2024 | Issue 101 24
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