HMRC have published their Employer Bulletin for December 2019. We summarise the key content for you, with links to our detailed guidance on the topics covered.
Guidance for employers on reporting PAYE information in real time when payments are made early at Christmas
In December 2018, HMRC advised of a temporary easement on reporting PAYE information in real time, as some employers pay their employees earlier than usual over the Christmas period. This easement has been made permanent and HMRC’s employer guidance will be updated shortly.
If you pay early over the Christmas period, you should report your normal (or contractual) payday as the payment date on your Full Payment Submission (FPS) and ensure that the FPS is submitted on or before this date.
For example: if you pay on Friday 20 December 2019 but the normal/contractual payment date is Tuesday 31 December 2019, report the payment date on the FPS as 31 December and ensure the submission is sent on or before 31 December.
Electronic payment deadline falls on a weekend
- In December the electronic payment deadline of the 22nd falls on a Sunday. To make sure your payment for that month reaches HMRC on time, you need to have cleared funds in HMRC’s account by the 20th unless you use Faster Payment.
- It is your responsibility to make sure your payments are made on time; if your payment is late you may be charged a penalty.
Advisory Fuel Rates from 1 December 2019
- If you are a company car user there have been changes to the Advisory Fuel Rates from 1 December 2019.
- See Advisory fuel rates (company car drivers)
Ultra-Low Emission Vehicles (ULEV)
From 6 April 2020:
- There will be 11 new bands for ULEVs including a separate zero-emissions band.
- From 6 April 2020 a new zero-emission mileage field will be shown on the form P46 (car).
- If a car has a CO2 emission figure of 1-50g/km you will need to provide the car’s zero-emission mileage. This is the maximum distance in miles that the car can be driven in electric mode without recharging the battery.
Payrolling the company car and car fuel benefit:
- From 6 April 2020 if a car has a CO2 emission figure of 1-50g/km you will need to provide the car's zero-emission mileage figure in the new field available.
See Company cars
High Income Child Benefit Charge deadline 31 January
If your employees are liable for the High Income Child benefit charge because their income is over £50,000 they may need to file a tax return and pay what is due before the 31 January 2020 deadline.
See High Income Child Benefit charge
Tax-Free Childcare payments
The government have made it quicker for parents to pay for the childcare they use.
For example, if a parent makes a deposit into their Tax-Free Childcare account by bank transfer or standing order:
- it should take only 2 hours for the payment to reach their childcare account
- any government ‘top up’ will be added automatically
- parents can use the money to pay their childcare provider as soon as it shows as ‘available funds’.
- If they pay their childcare provider:
- before 2.30pm, it’ll reach their provider’s account the same day
- after 2.30pm, or at weekends or bank holidays, it will arrive in their account the next working day.
Update on Termination payments: Post Employment Notice Pay for employees paid by equal monthly instalments
The alternative calculation of Post-Employment Notice Pay and the circumstances in which it may be used were published in the October 2019 Employer Bulletin.
HMRC have said that whilst it was intended that the alternative calculation would be available to be used in any case where the employee is paid by equal monthly instalments and the conditions of s402D(6) ITEPA 2003 are not met this is too restrictive and does not reflect HMRC’s intention. Updated guidance is now available at EIM13886.
Trivial Benefits in Kind Exemption – Getting it right
HMRC have issued some further tips on how to apply the rules correctly.
The rules are:
- Cost of the benefit must not be over £50
- The benefit must not be in the form of cash or a voucher redeemable for cash
- The benefit must not be provided as part of salary sacrifice arrangements or any other contractual obligation
- The benefit must not be provided in recognition of particular services.
Tip 1 – Other contractual obligation
Contractual obligations can take a variety of forms; the phrase should be read widely to include anything the courts would deem as a contractual agreement, for example:
- A side letter to the main contract document
- A staff handbook
- A letter of appointment
- A redundancy agreement
- An employer union agreement
- Any legitimate expectation.
A ‘legitimate expectation’ might apply even where there is no strict contractual obligation. For example, your employees may be provided with a cream cake every Friday. There is no contractual obligation but there would be a legitimate expectation – your employees expect to be provided with a cream cake every Friday.
There is further guidance regarding contractual obligations in EIM12976.
Tip 2 – Digital platforms
If you pay for an ‘app’ which enables your employees to access discounted products or services which the employee then pays for, the benefit provided by you is not the actual product or service supplied by the digital platform but access to the ‘app’ itself.
For the exemption to apply the total cost of providing the ‘app’ must be no more than £50, as well as meeting all the rules detailed above.
If, you pay for the products or services obtained by your employees, the total cost should be considered for the purposes of ‘the benefit’. One example is providing a taxi hailing ‘app’. If you provide an employee with access to the service and pay for all trips, once deductible business trips are removed, the cost of the remaining trips should be added together, including any cost associated with the provision of the ‘app’ and the total is then treated as ‘the benefit’.
Tip 3 – Particular service
If a benefit is provided to an employee as a reward for services, or in recognition of something they have had to do as part of their employment duties, the benefit will not qualify as a trivial benefit.
For example, an employer may require some employees to work through their lunch hour and provide them with lunch. The meal has been provided because of the work they are undertaking. The benefit does not satisfy the trivial benefits condition, so the exemption will not apply.
See Trivial Benefits
Business mergers and changes of ownership, what you need to do
Where a business joins with another or changes ownership, the employer will need to contact HMRC to confirm if they should treat the business change as a merger or a succession. HMRC will advise which employer reference to use or may provide a new one.
HMRC has identified that, in a small number of cases, after an employee has moved to a new employer reference because of a business change, previous pay and tax details are incomplete on the new payroll record. As a result, new tax codes have been issued based on incorrect information.
If your business is merging or changing ownership you should follow the steps detailed by HMRC on the Employer Bulletin here to ensure the change is correctly dealt with.
Workplace pensions – remember to keep paying in
Under auto enrolment employers are responsible for making sure that the right amount of pension contributions are paid promptly into a scheme.
It is not enough to enrol your employees in a scheme, you must continue paying in every time you run payroll. The minimum amount set by law for employers to pay in is 3% of the employee’s gross earnings. You can choose to pay more than this but you are not allowed to pay any less.
Employers should make sure members receive the contributions they are due and should identify late or inaccurate payments early; the Pensions Regulator will take action if you fail to comply with your ongoing legal duties, and you may need to backdate any missed payments.
See Auto-enrolment: workplace pensions (subscriber guide)
Student/Postgraduate Loans
Employers should operate the correct Student and/or Postgraduate Loan threshold and rate for employees and record this correctly on Full Payment Submission.
You can find out what Loan or Plan type your employee has by:
- asking your employee.
- checking the information completed by your employee on the starter checklist.
- checking the Student Loan start notice SL1 or Postgraduate Loan start notice PGL1.
HMRC may contact you to ask you to stop taking deductions under the wrong loan or plan type and correct the information on your next payroll submission.
PAYE Desktop Viewer
HMRC have advised that the PAYE Desktop Viewer (PDV) was not updated as expected and as advertised in the October Employer Bulletin and apologise for any inconvenience caused.
The next PDV release is not now expected until sometime in the New Year; in the meantime the current version of PDV will continue to function normally.
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