HMRC have published their Employer Bulletin for August 2022. We have summarised the key content for you, with links to our detailed guidance on the topics covered. 

 PAYE Settlement Agreements: a new digital version of the PSA1 form

  • HMRC have redesigned the PSA1 form following feedback from employers. 
  • A digital submission route has also been introduced. 
  • If using the paper PSA1, employers may have to complete more than one form depending on where employees live.
  • The digital PSA1 will allow employers to submit one form for all employees regardless of their location.
  • The new form is available here: PAYE Settlement Agreement (PSA1).

See PAYE Settlement Agreements

Payment deadline and calculation reminder

  • Tax and National Insurance owed under a PAYE Settlement Agreement must be paid by 22 October after the tax year to which the PAYE Settlement Agreement applies (19 October if you pay by post). 
    • Late payments may result in penalties and/or interest being charged. 
  • Employers must also send their calculations to HMRC.
    • The PAYE Settlement Agreement PSA1 calculation form is available.
    • A calculation must be submitted even if there is no amount due to pay.
  • If HMRC approves a PAYE Settlement Agreement before the start of a tax year, employers can include any expenses and benefits contained in the agreement.
    • If the agreement is approved after the start of the tax year, employers might need to report some items separately.

See PAYE Settlement Agreements and PAYE: Paying HMRC

Employers PAYE: introduction of variable payment plan

  • From 3 October 2022 (previously 19 September 2022) employers will be able to take advantage of a new variable Direct Debit payment plan.
  • The service can be accessed through Pay employers’ PAYE or directly through the business tax account and the employers PAYE service.
  • There will be changes to the business tax account and the employers’ liabilities and payments screens on the employers' PAYE service.
  • A new link ‘Set up a Direct Debit’ will be introduced and this will allow employers to set up a Direct Debit instruction, authorising HMRC to collect directly from their bank account based on their return submissions.
  • Following set up, the link will change to ‘Manage your Direct Debit’ and an employer will be able to view, change or cancel the Direct Debit online.
  • The facility to create, view, amend and cancel a Direct Debit is restricted to employers only, there is no scope for agents to do this.
  • If signed up to a variable payment plan, the following charges will be collected on receipt of the returns to HMRC:
    • Full Payment Submission.
    • Employer Payment Summary.
    • Construction Industry Scheme.
    • Apprenticeship Levy.
    • Class 1A National Insurance.
    • Earlier Year Update.

See PAYE: Paying HMRC

First Full Payment Submission for new starters: the importance of using the correct employee addresses, correction

This article was originally published in the June 2022 Employer Bulletin with incorrect guidance around what to do when receiving a late P45.

When completing the first Full Payment Submission for new starters:

  • Obtain and enter your employee’s correct address and postcode and use the employee’s P45 information to record their previous pay, tax and student loan (if applicable).
    • If the employee does not have a P45 you can use the starter checklist for PAYE.
  • If you use the starter checklist to add the employee onto your payroll records and you receive the P45 after you have received a tax code from HMRC, you do not need to update the previous pay, tax, or tax code on your payroll software, only update student loan details (if applicable).

See PAYE: Starter checklist new employee 2022-23

Other updates which might be relevant to employers

VAT deferred due to COVID-19: act now to avoid a penalty

  • Businesses that deferred VAT payments due between 20 March 2020 and 30 June 2020 should act now if they have deferred VAT outstanding as a 5% penalty or interest may be charged.

See COVID-19: VAT deferred payments

Tax avoidance: don’t get caught out

You must sign up now for Making Tax Digital for VAT

  • Most VAT-registered businesses must now report under Making Tax Digital for VAT (MVD). 
  • Businesses that are not exempt and haven't yet signed up to MTDfV need to do so before filing their next VAT return, otherwise, they could receive a penalty. 

See Making Tax Digital: VAT (subscriber guide)

Employees applying for a certificate of liability to pay Social Security contributions only in the UK: new attachment facility

  • HMRC have extended the attachment facility to all five forms for employees applying online for a certificate of liability to pay Social Security contributions only in the UK while working abroad. 
  • This means that 64-8s and any supporting information may now be attached at the time when any of these forms are submitted online. 

Bringing commercial goods into Great Britain in baggage: moving to the Customs Declaration Service to submit declarations

  • After 30 September 2022, the Customs Handling of Import and Export Freight (CHIEF) system will close for import declarations.
  • Business travellers bringing commercial goods into Great Britain in baggage after 30 September 2022 will need to submit their declarations through the Customs Declaration Service, either individually or through a customs agent.

New Tax Residence Indicator tool

  • HMRC has launched a new tool to help customers to determine their tax residence status by applying the rules as set out in the Statutory Residence Test (SRT). 

See Tax Residence Indicator and SRT: Statutory Residence Test

New professions able to issue fit notes

  • New legislation to allow a wider range of healthcare professionals to certify fit notes has been introduced by the UK government.
  • From 1 July, nurses, occupational therapists, pharmacists and physiotherapists are all able to legally certify fit notes in addition to doctors.
  • This change does not otherwise alter the purpose and function of the fit note. 
  • These professionals should be working within general practice or delivering NHS services as access to the new version of the fit note is limited to these settings.
  • Updated guidance and training for the healthcare professionals in scope has been delivered and updated guidance for employers and patients is available here.

Organised labour fraud

  • Organised labour fraud is the collective name HMRC gives to three main frauds:
    • Labour fraud in construction.
    • Mini-umbrella company fraud.
    • Payroll company fraud.
  •  All three frauds share some common traits. Examples include: 
    • Fraudulent businesses in the labour supply chain have a short life span, sometimes as little as 12 months. They will then be abandoned or become insolvent; another entity will then take their place.
    • Hijacked VAT registration, Construction Industry Scheme registration and/or PAYE scheme numbers.
    • Unusually long supply chains which often make no commercial sense.
    • Turnover in fraudulent businesses rises at an exponential rate and debt accrues quickly.
    • The director’s business history suggests they lack the experience to run a company of that type and size.
    • Directors may have a history of ‘phoenixing’ companies.
  • HMRC recommends that businesses apply the due diligence principles when they receive a supply of labour. This can be broken down into ‘Check, Act and Review’:
    • Check: know the risks: legal, financial, tax and the social obligations of suppliers.
    • Act: conduct robust due diligence on suppliers and act to mitigate or remove risks.
    • Review: effective due diligence requires continuous monitoring and review.

External link

Employer Bulletin: August 2022

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