HMRC have published their Employer Bulletin for October 2020. We summarise the key content for you, with links to our detailed guidance on the topics covered. 

Coronavirus Job Retention Scheme, October changes, closing down the scheme and Job Retention Bonus

Coronavirus Job Retention Scheme (CJRS)

What you need to do as an employer from 1 October:

See COVID-19: Coronavirus Job Retention Scheme

Job Retention Bonus (JRB)

The Job Retention Bonus lets you claim a one-off payment of £1,000 for each eligible employee you have furloughed, claimed for under the CJRS and kept continuously employed until 31 January 2021.

See COVID-19: Job Retention Bonus

New COVID-19 support schemes

The government has announced additional support for businesses and employees impacted by COVID-19 across the UK.

Job Support Scheme (JSS)

 A new Job Support Scheme will be introduced from 1 November. It will run for six months initially.

See COVID-19: Job Support Scheme

Extension to the reduced rate of VAT for Hospitality and Tourism

See COVID-19: VAT payments

VAT Deferral New Payment Scheme

If you deferred VAT payments that were due between 20 March and 30 June 2020, these payments need to be made to HMRC by 31 March 2021.

You can:

See COVID-19: VAT payments

New Self Assessment Self-Serve Time to Pay Scheme

See COVID 19: Deferring Income Tax payments

Do you have employees working from home because of COVID-19?

If you have asked employees to work at home because of COVID-19 they may have extra expenses.

How to claim:

See COVID-19: Working from home

National Insurance Number delays

Due to COVID-19, the Department for Work & Pensions (DWP) can only offer a National Insurance Number (NINo) service to a limited number of applicants.

DWP can only allocate a NINo for employment purposes if they can confirm the applicant has the right to work in the UK and their identity. Currently, they can only accept applications from those granted permission to work in the UK by the Home Office prior to them coming to the UK. This is because DWP can validate these applications with the Home Office.

Off-Payroll Working rules (IR35)

Education and support available to customers

At the start of October 2020, HMRC relaunched its programme of support to help you prepare.

You need to prepare for the changes if you are:

Most of the support here is also available for tax agents, to help you understand the changes for you and your clients. Please help your clients to prepare for the changes by sharing information on the support available with anyone who may be affected by the rules.

The Employer Bulletin includes a detailed table setting out what support is most appropriate depending on individual circumstances.

See Off-Payroll Working: PSCs & Private Sector Engagers

UK Transition and social security

Changes for UK employers sending workers to the EU, the EEA or Switzerland from 1 January 2021 and for workers from the EU, EEA or Switzerland coming to work in the UK.

If you are an employer who sends employees to work in the EU, EEA or Switzerland or you employ employees from one of those countries, you should read the following.

Employee starting work in the EU, EEA or Switzerland before 1 January 2021

Current European social security coordination rules will be used to work out which country’s social security scheme you and your employee will have to pay contributions to.

Applying for a PDA1 or E101 certificate for a period that starts before 1 January 2021

The current EU social security coordination rules will continue to apply after 31 December 2020 to certain individuals, whether a future relationship agreement between the UK and the EU on social security coordination is agreed or not.

Employees starting work in the EU, EEA or Switzerland after 1 January 2021

Applying for a PDA1 or E101 certificate for a period that starts after 1 January 2021

Employers and individuals should continue to apply to HMRC for PDA1s and E101s for employees who are to start working after 31 December 2020 in a situation involving the UK and an EEA country or Switzerland. For example, an employee you send to work temporarily in France.

Workers from the EU, EEA and Switzerland coming to the UK

If you employ a person from the EU, EEA or Switzerland before 1 January 2021 and they have a PDA1 which shows they are subject to an EEA country/ Swiss legislation, you and they will not have to pay UK NICs for the period stated on the PDA1, even if it ends after 31 December 2020.

UK’s future relationship with the EU

The Government has been clear that there will be changes to future social security coordination arrangements for those individuals not in the scope of the Withdrawal Agreement and the related agreements with EEA EFTA countries and Switzerland. They continue to work with the EU to establish practical, reciprocal provisions on social security coordination.

Right to work in the EU, EEA and Switzerland after 31 December 2020

For periods after 31 December 2020, employees should check the immigration rules in the country that they will be working in especially if they are a frontier worker.

The UK’s social security agreement with the Republic of Ireland

The UK has reached a reciprocal agreement with Ireland which ensures that social security coordination continues after 31 December 2020 when considering moves by UK or Irish nationals between the UK and Ireland.

Refunds of National Insurance contributions for Aircrew

If your employee’s home base is or has been in the UK and you and they have paid UK National Insurance contributions, but they did not reside in the EU or UK at this time, you and they may be entitled to a refund of those contributions You should contact HMRC to discuss the potential refund.

Apply for grants if you complete customs declarations

The next phase of the customs grant scheme is open for applications on a first-come, first-served basis. Applications will close on 30 June 2021, or earlier if all funding is allocated

Student Loan Repayments

HMRC may write to tell you to stop taking current year deductions and refund through your payroll, where Student and/or Postgraduate Loan deductions have been taken incorrectly in the current tax year.

Student and Postgraduate Loans thresholds and rates from 6 April 2021:

See Employer Bulletin: February 2020

PAYE for employer’s webchat service in the Business Tax Account

From 17th September, a webchat service has been added to the 2020-2021 Annual Statement page within the ePAYE online service.

If a green button appears at the bottom right-hand side of this page, you can click to ask HMRC a question to someone on the Employers’ helpdesk. This is part of a test and learn initiative; after three months, HMRC will assess how successful it has been and decide whether it will remain as a permanent feature in the account.

New Employment Allowance status option on PAYE for employers

PAYE for employers within the Business Tax Account is the quickest and easiest way to keep up to date with your employer liabilities and to track payments. You can now also check to see if you’ve claimed Employment Allowance for the tax year with a new feature on the right-hand navigational links under 'Employment Allowance status'.

See Employers' NICs allowance

PAYE RTI penalties, a continuation of the risk-based approach to charging penalties

Following HMRC’s review of the effectiveness of the risk-based approach to PAYE late filing and late payment penalties, they have confirmed this approach will continue for the 2020-2021 tax year.

This means that late filing and late payment penalties will continue to be considered on a risk-assessed basis rather than issued automatically.

Employers can now include problems caused by COVID-19 as the reasonable excuse that prevented them from meeting their tax obligation.

Late Filing Penalties

As in previous years, HMRC will continue to not charge penalties automatically if a Full Payment Submission (FPS) is filed late but within three days of the payment date and there remains no pattern of persistent late filing.

Employers who persistently file after the statutory filing date but within three days will continue to be monitored and may be contacted or considered for a late filing penalty.

Late Payment Penalties

The due date to make PAYE payment to HMRC electronically remains the 22nd of the month (or quarter if you pay quarterly) following the tax month/period to which they relate. If you pay by cheque or other non-electronic payment means, you must pay by 19th of the following month/quarter to which the payment relates.

If you pay late, HMRC may charge interest on the amount outstanding until the total amount is paid. You may also face a late payment penalty which HMRC will assess under a risk-based approach.

See Penalties: RTI (Real-Time Information) for PAYE

Reporting your payroll information accurately and on time

The payment date you report on your FPS should be on or before the date you pay your employees, not the payroll run date or another date from your payroll system unless the normal payment date falls on a non-banking day.

When a regular payday falls on a non-banking day and because of this, payment is made on the:

for PAYE purposes the payment may be treated as having been made on the regular payday. This is also the date that should be reported on the FPS as the ‘payment date’ even if the actual payment is made slightly earlier or later.

For NICs purposes, the payment must be treated as if it had been made at its regular time if the actual and regular payment days are in the same tax year or across a tax year.

See RTI: Real-Time Information for PAYE

Generic Notification Service (GNS) electronic warning messages

Do not ignore these messages, they are intended to notify you that you haven’t filed on time or paid on time. You can check your messages in the same way you do if you receive electronic coding notifications, either by logging into PAYE Online and selecting the generic notifications from within the 'Notice summary' section, using the PAYE Desktop Viewer, using your commercial software, or accessing your Business Tax Account and using the ‘messages’ link.

RTI Payment codes

To make sure the PAYE payment allocations are correct, you need to make the monthly payment to the 13-digit accounts office number connected to the PAYE reference, along with a 4-digit code. The bulletin includes a table setting out these codes for 2020/21 here.

Making your PAYE Settlement Agreement (PSA) payment

See PAYE Settlement Agreement

Disguised remuneration loan charge

The deadline for settling disguised remuneration scheme use in order to not pay the loan charge has passed. If you haven’t reported and paid the loan charge already, you should do so now.

See Disguised remuneration loan charge (subscriber guide)

New General Anti-Abuse Rule advisory panel opinion published

HMRC have published 'Spotlight 56 – Disguised remuneration: tax avoidance by owner-managed companies using remuneration trusts'.

See Spotlight 56: Disguised remuneration 

The November electronic payment deadline falls on a weekend

Changes to HMRC opening hours

At the start of the pandemic, HMRC reduced phone helpline opening hours to 8am - 4pm but are now extending these to 8am - 6pm and changing webchat opening hours to close at 8pm and on Sundays.

PAYE Online service for reporting P11D, P11D(b) and P46(car)

HMRC are redesigning the PAYE Expenses and Benefits service and are looking for organisations that employ five to 250 employees to participate in User Research.

Update on the withdrawal of P45 and P60 bulk stationery

From 1 August 2020, HMRC withdrew the facility to order blank P45s and P60s. The majority of employers can no longer order blank paper forms. Employers who are exempt from operating their payroll online are not affected by the change and can continue to order by phone on 0300 200 3205.

Make sure to stay on top of your workplace pension responsibilities and avoid legal action

The Pensions Regulator (TPR) has continued to monitor pensions throughout the pandemic crisis. While your business might have changed due to COVID-19, your responsibilities towards your staff haven’t. You must:

With the Coronavirus Job Retention Scheme due to close on 31 October, make sure you’re aware of your automatic enrolment duties.

See Auto-enrolment: Workplace pensions (subscriber guide).

Peer Networks/Small Business Leadership Programme

The Government is investing £20 million to improve small businesses’ management, productivity and problem-solving skills through two training programmes. There are 6,000 on the Peer Networks programme (with a possible further 4,000, subject to demand) and 2,000 places available on the Small Business Leadership Programme.

See £20m in new grants for SMEs

 Corporate Criminal Offences, more than just a legislative tool, and why you should care

In September 2017, legislation known as the Corporate Criminal Offences (CCO), was introduced which can hold a corporate liable if it fails to prevent any associated person from facilitating tax fraud.

See Offence: Failure to prevent tax evasion

Check if you need to tell HMRC about additional income

HMRC has launched interactive guidance on GOV.UK to let users check if they need to tell HMRC about extra income in addition to their main PAYE income, by answering a series of questions. Using their answers, HMRC will direct them onto the relevant next steps.

The guidance is for people receiving a ‘casual’ income (online or in-person), who do not know that they might need to declare it, or possibly pay tax on it and things like:

See Trading and Property Allowances

External link

Employer Bulletin: October 2020