The measure will introduce a new income tax exemption for payments made when employers are mandated to provide employees or former employees with appropriate independent advice as part of any employer-led transfer exercise from defined benefit (DB) to defined contribution (DC) pension schemes. The Pension Schemes Act 2015 introduced the new definitions of ‘safeguard’ and ‘flexible’ benefits, which broadly cover the benefits offered in defined benefit and defined contribution schemes, respectively.
Where the employer provides or pays for advice to an employee in order to meet their obligation, then that provision or payment is covered by the new income tax exemption.
When this obligation is met by an advisor whom the employer has contracted with for the purpose, the employee benefits. This would ordinarily be chargeable to tax and the exemption will remove this charge. No Class 1A National Insurance contributions (NICs) liability will arise as its treatment automatically follows the tax position. When this obligation is met by means of a reimbursement to the employee there will be a corresponding disregard for Class 1 NICs.
For full details see Tax Information and Impact Note
2014/2015 Employer – No return of Class 1A form
24 March 2015
The removal of the mandatory requirement to complete the End of Year checklist will see the introduction of a new online form from 6 April 2015.
As reported in the February edition of the Employer Bulletin it will no longer be mandatory requirement to complete the end of year checklist that was a feature of the Employer Annual Return form P35. You will be aware that this announcement came in late in the day for most Software Developers (including HMRC Basic PAYE Tools) who had already finalised their software for the coming year end and new tax year. If this is the case and software requires completion of the checklist prior to submission of the final FPS employers and their agents will still need to answer the questions on the checklist. The removal of the checklist does not impact on the requirement for an employer to correctly report expenses and Benefits in Kind (BiK) on a P9D or P11D and the amount of Class 1A NIC due.
From 6 April and where no benefits have been provided from 6 April 2014 to 5 April 2015 and a form P11D or P11D(b) reminder is received employers or their agents can:
Submit a ‘nil’ return; or Complete the 2014-15 Employer – No return of Class 1A form to advise HMRC that no P11D and P11D(b) is due to be submitted.
The online form will be available from 6 April 2015
Government and charity sector commit to boost Payroll giving
31 March 2015
CIPP Policy News Journal
08/04/2015, Page 296 of 521
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