Employer Bulletin: October 2022

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

PAYE

Reduction in the rate of National Insurance Contributions and reversal of the Health and Social Care Levy: employer actions

On 22 September 2022 the government announced a reversal to the increase in National Insurance rates and the cancellation of the Health and Social Care Levy as a separate tax which was due to be introduced from April 2023. As a result:

• National Insurance contributions rates will be cut by 1.25% for employees, employers and the self-employed from 6 November 2022.
• The cut will cover Class 1, (both employee and employer), Class 1A, Class 1B and Class 4 (self-employed) National Insurance Contributions.
• HMRC has asked employers to remove (from 6 November 2022) the temporary generic message on payslips for the tax year (2022 to 2023) explaining the National Insurance Contributions uplift.

HMRC realise the timeline is tight and some employers may face challenges in implementing the changes in time.

See Agent Update: October 2022 for more details on what employers need to do.

Making your PAYE Settlement Agreement payment

• Electronic payments for a PAYE Settlement Agreement (PSA) for the tax year ended 5 April 2022 must clear into HMRC's bank account on or before 22 October 2022. If you pay late you may have to pay interest or a late payment penalty or both.
• To pay, you need to use the PSA reference number from the payslip HMRC sent to you, for example, XA123456789012. If you do not have this, contact the office dealing with your application for advice.
• Do not use your PAYE Accounts Office reference to make your PSA payment, because payments received with your PAYE Accounts Office reference are allocated to your normal PAYE account and you will continue to receive reminders for the PSA even though you have paid.

See PAYE Settlement Agreement 

Guidelines for Compliance: help with PAYE Settlement Agreement calculations

Guidelines for Compliance were announced in November 2021 as part of the review of tax administration for large businesses. They offer HMRC’s view on complex, widely misunderstood or novel risks that can occur across tax regimes.

The Guidelines for Compliance for supporting PAYE Settlement Agreement calculations is on GOV.UK and follows the redesigned PSA1 form.

See Employer Bulletin: August 2022 and Agent Update: October 2022

Electronic payment deadline falls on a weekend

In October the electronic payment deadline of 22 October 2022 falls on a Saturday.

• To make sure your payment reaches HMRC on time, you need to have cleared funds in HMRC’s account on or before 21 October 2022 unless you are able to arrange a Faster Payment.
• If your payment is late, you may be charged a penalty.

See PAYE: Paying HMRC

Guidance for employers on reporting PAYE information in real-time when payments are made early at Christmas

In 2019 HMRC introduced a permanent easement on reporting PAYE information in real-time.

• If you pay early over the Christmas period, report your normal (or contractual) payday as the payment date on your Full Payment Submission (FPS) and make sure that the FPSis submitted on or before this date.

For example, if you pay on Friday 16 December 2022, but the normal (or contractual) payment date is Friday 30 December 2022, report the payment date on the FPS as 30 December and make sure the submission is sent on or before 30 December.

Student loans

Employers are responsible for dealing with Student Loan (SL) and Postgraduate Loan (PGL) deductions through the payroll via RTI.

See Agent Update: September 2022 for details of common errors identified on RTI and HMRC’s tips for getting it right.

Take advantage of the National Insurance holiday for employers of veterans

• Employers across the UK could save thousands of pounds in National Insurance contributions if they hire former members of the UK regular armed forces during their first year of civilian employment.
• Since April 2021, employers taking advantage of the NICs holiday for the employers of veterans have been able to apply a zero-rate of secondary NICs (for that employee) for up to 12 months.
• Employers can claim through Full Payment Submissions from April 2022. Retrospective claims for the period April 2021 to April 2022 can also be made. There is no limit to the number of qualifying veterans a single business can employ.

See Employer NICs relief for veterans

The Office for Veterans Affairs wants to hear from any employers taking advantage of the scheme and willing to talk about their experience. If you’re interested in featuring as a case study, send an email with ‘NHEV case studies’ in the subject to: This email address is being protected from spambots. You need JavaScript enabled to view it. and someone will be in contact to discuss next steps.

New starter checklist interactive guidance goes live: helping customers get it right

The new starter checklist is an alternative method, in the absence of a P45, of providing HMRC with new employer details and makes sure that employers apply the most appropriate tax code so that the correct tax is deducted by HMRC.

Online interactive guidance has been developed which allows a new employee to answer a series of questions and select the appropriate answers to their circumstances. This will produce a new starter declaration which can then be downloaded and emailed or posted to the employer.

See PAYE: Starter checklist new employee 2022-23 and Agent Update: October 2022

HMRC app and pre-employment checks

The HMRC app has been updated and improved to include quick and easy ways for individuals to get their employment details.

• If you need employment details as part of your recruitment process, encourage job applicants to get it using the HMRC app. They can print and download their employment history and income (going back five years), National Insurance number and tax codes.
• Individuals can also get their employment details using their personal tax account.

See Personal Tax Account

How to reduce the number of P11Ds you fill in and send to HMRC

• If you payroll benefits and expenses provided to employees you will no longer need to submit P11D returns to HMRC for most Benefits In Kind.
• You can collect the tax due from your employees on a pay period basis (monthly, weekly etc) and show your employees how much tax they have paid on their payslip.
• You must register for payrolling on or before 5 April 2023 to be ready for the 2023-24 tax year.

See Payrolling of benefits

Tax updates and changes to guidance

The rules HMRC uses to work out taxable profits for income tax in a self-assessment return are changing for many businesses.

• From April 2024 onwards, sole traders and partners will be taxed on profits generated in that tax year, that is, from April to March. This will be the case regardless of a business’s accounting date.

See Basis Period reform and Agent Update: September 2022 for more details on how sole traders and partners will be affected, the transitional rules and overlap relief.

You must now file VAT Returns using Making Tax Digital compatible software

The way you file VAT Returns has changed, as part of Making Tax Digital (MTD).

• You should already be using MTD-compatible software; this became mandatory from April 2022.
• From 1 November 2022, you will not be able to file monthly or quarterly using your existing VAT online account to submit your VAT.
• If you have not already done so, you must sign up to Making Tax Digital and use MTD-compatible software now to keep your VAT records and file your VAT Returns or you may have to pay a penalty.

What you need to do now: four steps to sign up

If you have not done this already, then follow these steps today:

1. Choose Making Tax Digital compatible software that’s right for you, including free options.
2. Check the permissions in your software: once you have allowed it to work with Making Tax Digital, you can file your return easily.
3. Find out what digital records you need to keep for your current and future VAT
4. Sign up to Making Tax Digital and file your future VATReturns with Making Tax Digital-compatible software.

How to apply for an exemption from using software

If you’re already exempt from filing VAT Returns online or if you or your business are subject to an insolvency procedure, you’re automatically exempt.

See Making Tax Digital: VAT (subscriber guide)

Change to VAT penalties and interest charges

• For VATperiods starting on or after 1 January 2023, the default surcharge will be replaced by new simplified penalties. At the same time, there are changes to how interest is calculated.
• If your business submits a nil or repayment VAT Return, you will need to make sure it’s submitted on time. Unlike the current default surcharge, under the new late submission penalties, if a nil or repayment return is submitted late penalty points and a £200 fine may apply.

See Penalties: Late Payment MTD and Penalties: Late Filing MTD

Decision tool and calculator for the 130% super-deduction and the 50% special rate capital allowances

HMRC has published an interactive tool to help companies check if they can claim for the super-deduction of up to 130% or the 50% special rate first-year allowances for qualifying expenditure on plant and machinery.

See Super-deduction & First Year Allowances and Agent Update: September 2022

New powers for naming tax avoidance promoters

To support taxpayers in steering clear or moving out of tax avoidance, HMRC publishes lists of those involved in the supply of mass-marketed tax avoidance schemes and details of the schemes they are selling.

See Promoters of Tax Avoidance Schemes (POTAS) and Agent Update: September 2022 for more details.

Spotlight 60: warning for agency workers and contractors employed by umbrella companies

See Spotlight 60: Umbrella companies and tax avoidance

Government Information and Advice Service

The government is testing a new online service for employers which provides advice and guidance on managing health and disability in the workplace.

This explains your legal obligations and good practice and may be particularly helpful for smaller businesses without an in-house Human Resources (HR) function or access to an occupational health service.

By taking part, you’ll receive free information and guidance on disability and health-related employment issues. You can provide feedback through support with employee health and disability site.

Getting more information and sending feedback

Make sure you are kept up to date with changes by signing up to receive email alerts.

You can also follow HMRC on Twitter @HMRCgovuk.

Send your feedback about this Employer Bulletin or articles you may wish to see by email to This email address is being protected from spambots. You need JavaScript enabled to view it..

External link

Employer Bulletin: October 2022