Employer Bulletin: December 2022

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

Your employees may be eligible for tax relief on their work-related expenses

Some employees may be able to get tax relief on expenses if you have not already reimbursed them.

• This includes things like:
  • Uniforms and work clothing.
  • Buying equipment.
  • Professional fees and subscriptions.
  • Using their own vehicles for work travel.
  • Working from home.
• Claims can be made directly with HMRC. 
  • There are companies who will make a claim on an individual’s behalf, charging fees of up to 50% of the refund.
  • These companies usually advertise on social media and online.
  • The information individuals need to give to these companies is the same as if they apply directly to HMRC. If applying directly with HMRC, no fee is charged. 
• You can help your employees by making sure your internal guidance and website are up to date and encourage them to claim tax relief on work-related expenses via GOV.UK.

See Annual expenses for employees: How to claim

Reduction in the rate of National Insurance contributions from 6 November 2022:  updated guidance

HMRC guidance has been updated to reflect the National Insurance contributions rate change from 6 November 2022.

• HMRC have also updated the fix problems with running payroll guidance.
  • This advises you on what to do if you are unable to charge the correct rate in National Insurance contributions for the period from 6 November 2022.
• Employers are asked employers to remove the temporary generic message on payslips which explained the April 2022 National Insurance contributions uplift. 
• In most cases, employers will correct any overpaid National Insurance contributions and a revised Full Payment Submission can then be submitted to make corrections.
• HMRC’s Basic PAYE Tools has been updated to account for National Insurance contributions from 6 November 2022. You should make sure you are using Basic PAYE Tools version 22.2 (or later), this can be downloaded from GOV.UK.
• HMRC continue to work closely with payroll software developers on these changes and you should contact your software provider with any payroll queries in the first instance.

See National Insurance: Rates

Payrolling expenses and benefits for the 2023-24 tax year

• You can register now to payroll your benefits from 6 April 2023.
  • You will no longer need to submit a P11D for each employee for whom you payroll benefits.
• If you already have an informal agreement with HMRC to payroll benefits for the 2022-23 tax year, you can continue to submit P11Ds marked ‘Payrolled’.
  • You should plan to formalise this agreement as soon as possible.
  • HMRC may no longer accept new informal arrangements.

See Payrolling of benefits

Electronic payment deadline falls on a weekend

The 22 January 2023 electronic payment deadline is a Sunday.

• To make sure your payment for January reaches HMRC on time, you need to have cleared funds in HMRC’s account on or before 20 January 2023, unless you are able to arrange a Faster Payment.
• If your payment is late, you may be charged a penalty.

See PAYE: Paying HMRC and Calendar of tax deadlines and new tax measures

Employer PAYE new recurring Direct Debit functionality

Employers now have the functionality to set up recurring Direct Debits to cover monthly or quarterly PAYE liabilities on an ongoing basis.

• Once set up, the Direct Debit collection process can only commence and conclude on a bank working day.
• Initially, you will receive a secure message to your inbox within your business tax account showing the Direct Debit amount.
  • This is called the advance notification and it will be issued on the 20th or the next working day if the 20th of the month is not a working day.
• Collection from the bank will happen on the 3rd working day after the advance notification is issued: the collection will always be after the 22nd of the month.
• As the due date for payment is the 22nd of the month, there may be instances where the charges within the online account are showing as overdue and interest charges may be showing.
• Once the Direct Debit has been collected, HMRC's financial systems will automatically update and remove any interest charges for the short period between the 22nd and the date the payment was received by HMRC.
• For example, in December 2022:
  • The advanced notification will be issued on 20 December 2022.
  • The Direct Debit will commence collection on 21 December 2022.
  • Money will be collected from the bank on 23 December 2022.
  • Interest for late payment will be removed by 24 December 2022.

See PAYE direct debit interest charge anomaly confirmed by HMRC

Changes to company car tax rates from April 2025

New company car tax rates were announced in the 2022 Autumn Statement and will come into effect from 6 April 2025.

• Company car tax rates for zero-emission vehicles and ultra-low emission vehicles, emitting less than 75g of CO₂ per kilometre, will increase by one percentage point in each of 2025-26, 2026-27 and 2027-28 up to a maximum appropriate percentage of 5% for electric cars and 21% for ultra-low emission cars. 
• Rates for all other vehicle bands will be increased by 1 percentage point for the 2025-26 tax year up to a maximum appropriate percentage of 37%. 
  • These rates will then be frozen for tax years 2026-27 and 2027-28.

See CO2 emissions: Ultra-low emission cars from 2019-20

Construction Industry Scheme: requests for payment and deduction statements

From 1 December 2022, HMRC changed the way they deal with requests for payment and deduction statements from subcontractors, their tax agents and representatives in the Construction Industry Scheme.

• HMRC will only deal with one Construction Industry Scheme (CIS) payment and deduction statement request per taxpayer, any further requests for information will be refused.
• Before you request a payment and deduction statement from HMRC you need to:
  • Try and get the information directly from your clients or their contractors.
  • Ask clients or contractors to send you copies from their records.
• Obtaining this information from your clients or contractors should be built into your routine processes. These best practices will support correct information management and efficiency.
• Any additional requests for missing CIS payment and deduction statements will be considered.
  • You will need to demonstrate that you’ve requested information from the contractor but have not been able to get it, for instance, because the contractor has stopped trading.
• In these circumstances you should write to HMRC:

PT Operations
HM Revenue and Customs
BX9 1BX

• Provide the following information in your letter:
  • Your name and address.
  • Your client’s name, address and Unique Taxpayer Reference.
  • The name and address of the contractors.
  • The contractor’s tax reference, if you know it.
  • The dates of the payments or the tax months when the contractor paid you or your client.
  • Confirmation that the contractor cannot or will not provide the documentation.

See CIS: Contractors and Subcontractors

Working through an umbrella company

HMRC has provided updated guidance for umbrella company workers.

• The guidance is intended to help workers understand:
  • How they will be engaged.
  • How their pay is made up.
  • What employment rights and tax obligations they have when employed by an umbrella company.
• The Department for Business, Energy & Industrial Strategy has also produced key information documents for agency workers paid through umbrella companies.
  • This is an important part of the process in helping umbrella company workers understand their rights.

See Starting Work 5. Agency or Umbrellas

Make sure you stay on top of your workplace pension duties

The Pensions Regulator is warning employers to make sure they are complying fully with their ongoing automatic enrolment duties, after inspections found a number of errors. 

• Read more about your ongoing automatic enrolment duties on The Pension Regulators website.
• Key errors include using incorrect earnings thresholds which put staff at risk of not receiving the pension contributions they are due.
  • Read about earnings thresholds on The Pensions Regulators website.
• Correcting mistakes can be costly. You may need to make backdated payments for staff receiving incorrect contributions, and errors can also lead to enforcement action which can include financial penalties.

See Auto-enrolment: Workplace pensions

Interactive P2 (notice of coding) guidance 

PAYE notices of coding, also known as a form P2 give taxpayers an explanation of what their current tax code is and the reason as to why they have that tax code.

• Customers receive a P2 notice of coding when their tax code changes, this can be for a number of reasons.
• New interactive guidance has been produced to support taxpayers, allowing them to select the correct guidance according to their needs and understand what has changed and what, if anything, they need to do.

See What is the 2022/23 PAYE tax code?

HMRC is now using card readers to take payments

From 31 October 2022, all HMRC Officers who visit taxpayers about debt will have card readers available to take payment at the taxpayer's premises. 

• Card payments can be used to make payment in full or part payment as part of a Time to Pay arrangement.
• Taxpayers should be sure that a collector is legitimate. See how to confirm the identity of HMRC staff.

Ukrainian arrivals paying tax in the UK if they work for an employer based in Ukraine

HMRC recently published guidance about paying taxes and National Insurance contributions in the UK if you work for an employer based in Ukraine.

• The guidance explains what tax residence is, which country the employee will pay taxes in and what they need to do to meet their tax obligations.

The Administrative Burden Advisory Board (ABAB): Tell ABAB Report 2021-22

On 20 October 2022, HMRC published the Tell ABAB Report 2021 to 2022.

• This Tell ABAB report is based on an annual survey and a key way for the Administrative Burden Advisory Board and HMRC to gain insight from small businesses.
• This year’s survey was conducted in April and May 2022, with over 3,000 responses.
• 68% of responses were from businesses and 32% identified themselves as tax agents.

If you have deferred VAT outstanding, act now to avoid a penalty

Businesses that deferred VAT payments due between 20 March 2020 and 30 June 2020 may be charged a 5% penalty and/or interest if they have deferred VAT and have not yet paid.

• Anyone struggling to pay deferred VAT should contact HMRC as soon as possible to look at manageable payments according to individual circumstances.

See COVID-19: VAT deferred payments

Plastic Packaging Tax: check if your business needs to register

The Plastic Packaging Tax was introduced on 1 April 2022.

• If your business manufactures or imports 10 or more tonnes of plastic packaging within a 12-month period, you must register for the Plastic Packaging Tax, even if your packaging contains 30% or more recycled plastic.

See Plastic Packaging Tax

External link

Employer Bulletin: December 2022