Employer Bulletin: June 2023

HMRC have published their Employer Bulletin for June 2023. We have summarised the key content for you, with links to our detailed guidance on the topics covered.

PAYE (Pay-As-You-Earn)

Paying employers' PAYE

• You should include your 13-character accounts office reference number as the payment reference to ensure the payment is allocated to the correct month or liability. This can be found on:
  • Your HMRC online account.
  • The letter HMRC sent registering you as an employer.
  • The front of your payment booklet.
• Making early or late payments requires an extra four numbers added to the end of the reference number.
  • Monthly payments require the tax year (two digits) and tax month (two digits).
  • For example, a payment for the month 6 June to 5 July 2023 will be 2403, The tax year is 23-24 (24) and June is the third month in the tax year.
  • For quarterly payments, the third and fourth digits represent the last month of that quarter, e.g. for the 6 July - 5 October 2023, the digits would be 2406.
  • For annual payments, the last two digits represent the month in which you paid your employees.
• If you pay through the online tax service, it will work out the numbers for you.

See: PAYE: Paying HMRC

Reporting of expenses and benefits, correct recording of diesel company cars

• Diesel cars sold or registered before January 2021 may not meet the Real Driving Emissions (RDE) 2. Where this is the case, they should not be recorded as Car Type F on the P11D form.
• Instead, they should be recorded as Car Type D, where they fail to meet the RDE 2 criteria. If not, they will not have the 4% surcharge added and there will be an underpayment of Income Tax and Class 1A NICs.
• This information can be found on the V5C (vehicle log book) or on the DVLA website.
• Cars sold from January 2021 must meet the RDE 2 standard, so no checking is required.

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

P11D and P11D(b) filing and payment deadlines

• Detailed submission information was published in the April 2023 Employer Bulletin.
• It is now mandated that returns and amended returns must be filed online. Paper forms, including lists, will be rejected.
• The deadline for notifying HMRC of any Class 1A NICs owed for 2022-23 is 6 July 2023. P11D returns must be filed by this date also. Failure to do so may result in a penalty. Payments must be received by 22 July at the latest.

See: P11D and P11D(b): Index

Use the right payment reference when paying Class 1A National Insurance contribution

• The correct reference is your accounts office reference number followed by four digits which are 2313. 23 represents the 2022-23 tax year and 13 indicates that the payment is for Class 1A NICs.

How to submit P11D and P11D(b)

• Submission must be either via commercial payroll software or HMRC's PAYE online service.
• All forms must be submitted together in one online submission.

What to file

• Paying or payrolling benefits or paying non-exempt expenses requires a P11D to be filed.
• The total benefits liable to Class 1A NICs must be included, even if the tax has already been paid through PAYE.
• Use the P11D(b) to report the employer's Class 1A NICs liability.
• A P11D must be filed for each employee receiving benefits unless you registered online before 6 April 2023, to tax them through payroll.
• If you wish to payroll benefits for the tax year 2024-25, you can register online before 6 April 2024.
• Informal payrolling of benefits is no longer accepted from 6 April 2023

What to do if you did not pay any expenses or benefits

• You only need to inform HMRC of this if you have received a notice or reminder to file a P11D(b). 

How to file P11D and P11D(b) correctly

Common mistakes to avoid:

• Do not put the tax year start and end date in the P11D start and end dates for company cars, unless these were the dates that the car was received and returned.
• Do not try to submit a number of P11Ds in stages, they must all be filed together.
• Remember to include the CO2 emissions figure for fully electric cars.
• For hybrid cars with CO2 emissions of 50 or under, remember to include the zero emissions approved mileage.
• Send one P11D(b) for each scheme not per employee/director.
• Check the P11D(B) to see if you need to use the 'adjustments' section.
• See: P11D: Reporting benefits and expenses

The issue with company car tax calculator April 2023

• The issue with the 2023-24 fuel benefit calculator was resolved as of 14 April 2023.
• If you used the calculator between 6 April and 14 April 2023, you should check your calculations are correct.

See: Company Cars

National Minimum Wage

• The National Living Wage (NLW) and National Minimum Wage (NMW) are the statutory minimum wages a person could be paid per hour.
• The current rates for 2023-24 can be found here. 
• There can be instances where the correct amount has not been paid. Common issues include unpaid working time, unpaid travelling time and deductions from pay for items or expenses connected with the job.

Employing an intern or anyone on 'work experience'

It is important to establish the nature of the relationship between the individual and the employer when deciding if the individual is a worker or not for minimum wage purposes. This is an objective test not one that is not dependent on employer definition.

• Interns: This type of role is normally associated with gaining experience for a professional career.  If any payment or remuneration is made for work done, an intern is likely to be regarded as a worker for minimum wage purposes. This includes a promise of a contract of future work or future pay.
• Work experience: This type of role generally refers to a specified period that a person spends with a business, providing them with an opportunity to learn directly about working life and the working environment.

See: Minimum wage — work experience and internships. For guidance see: Calculating the minimum wage correctly and if you make a mistake, you can make a voluntary declaration

PAYE Settlement Agreement (PSA) deadline and digital services

• The PAYE Settlement Agreement (PSA) application deadline is on or before 5 July 2023.
• You can apply online. 
• If you have an agreement in place, you must send a calculation, even if it is a nil return
• You must pay any tax and NICs owed by 22 October 2023 for 2022-23 (19 October if you pay by post)
• You should only report benefits or expenses included in the PSA
• You must include all employees who have received the benefits or expenses including any employees that earn below the personal tax allowance.
• Employees living in Scotland or Wales may be subject to different rates of Income Tax.

See:Payrolling of benefits

Update on employer Direct Debits

• Employers looking to set up a direct debit for employer PAYE need to do this at least 6 working days before the payment is due (22nd of the month).
• This is set up through the business tax account using PAYE Online for employers and cannot be done by an agent.
• The system has been updated so that the late payment notification is no longer sent.  The late payment interest may still be applied to the account but will be reversed after payment is processed.

See: PAYE: Paying HMRC and HMRC advise longer lead times for PAYE direct debits

Easier access to online employer service

• HMRC have launched an online service to assist employers with their queries.
• If you call HMRC, they will now send a text directing you to the relevant online services.

Tax updates and changes to our guidance

Payment increase to the apprenticeships care leavers’ bursary

• The Apprenticeship bursary available for 16-24 year-olds undertaking apprenticeships in England has been increased from £1,000 to £3,000.
• The existing and increased payments are exempt from Income tax and National Insurance.
• The increase applies from 1 August 2023.
• This is separate from the £1,000 employers receive for 16-24 year-old apprentices who are care leavers.

Employment status guidance for locum pharmacists to be withdrawn with effect from 30 June 2023

• From 30 June 2023, the guidance on locum pharmacists will be withdrawn
• As set out in section ESM4270, a written document by itself cannot determine employment status. Therefore, if a pharmacy business has made an employment status determination based solely on the written contract, then they should immediately re-examine that determination based on the facts of the engagement using the CEST tool.

See: Employment status and detailed checklist

Self Assessment threshold change

• From 6 April 2023 (2023-24), the Self Assessment threshold for individuals taxed through PAYE has been lowered from £150,000 to £100,000.
• This does not affect the 2022-2023 year that is currently open for filing.
• If an individual submits a return for 2022-23 which shows income between the two thresholds but none of the other self-assessment criteria is met, an exit letter will be sent.
• The other criteria are:
  • Receipt of any untaxed income.
  • Partner in a business partnership.
  • Liability to the High Income Child Benefit Charge.
  • Self-employed individuals with a gross income of over £1,000.

See: Do I need to file a tax return?

Employment-Related Securities — end-of-year return deadline for employee share scheme

• For every registered ERS scheme, you must file an end-of-year ERS return, including nil returns.

• For 2022-23, the filing deadline is 6 July 2023.

• The late filing penalty is £100. Additional automatic penalties of £300 will be charged after 3 months and again after six months.

• If you appeal against an ERS late filing penalty, an end-of-year return must still be submitted to prevent further penalties.

See: Employment-Related Securities: Reporting

Electronic payment deadline falls on a weekend

• In July 2023, the electronic payment deadline, 22nd, falls on a Saturday.
• In order to pay on time, funds must have reached HMRC by 21 July 2023.
• It is the taxpayer's responsibility to ensure the payment is made on time.

Preparing for the new tax year basis — Income Tax Self Assessment

• The basis upon which sole traders and partners are assessed for Income Tax is changing from 2023-24.
• This change is not affected by the delay to the introduction of Making Tax Digital.
• Taxpayers with 31 March and 5 April accounting period end dates remain unaffected.
• From 6 April 2024, income will be assessed on a tax year basis not a current year basis.
• 2023-24 will be a transition year and overlap relief may be available. HMRC is currently developing a form to request overlap profits information. The form and additional support, including a helpline will be available from the summer.
• Under the new tax year basis, provisional figures may be required and the government guidance has been amended to reflect this.
• Under the new basis, changes of accounting dates can be made regardless of previous history.

See: Basis Period Reform

General information and customer support

Making Child Benefit claims quicker and easier for new parents

• Child Benefit can now be claimed online or by using the HMRC app.
• If either partner earns over £50,000, they will be subject to the High-Income Child Benefit Charge if they continue to claim. Alternatively, they can opt out of the payments.

National Cyber Security Centre helps businesses tackle cybercrime risks

• The National Cyber Security Centre (NCSC) has launched a cyber action plan for small businesses and a tool that helps them scan their IT systems for vulnerabilities.
• In 2022, four in 10 small businesses reported a cyber attack.
• It is called the Check Your Cyber Security service.

National Insurance numbers can now be saved to the Apple Wallet 

• Taxpayers with Apple iPhones can now download their National Insurance number from the HMRC App and save it to their Apple Wallet.
• Issuing a number confirmation can take up to 15 days.
• Proof via the Wallet should be accepted by employers in the same way.
• Work is underway to introduce this capability for the Google Wallet.

Tax Administration Framework Review — publication of information and data call for evidence and creating innovative change through new legislative pilots discussion documents

The Government has published two documents as part of the wider Tax Administration Framework Review. The publications are open for 12 weeks and will close on 20 July 2023. The two new publications are:

• Creating innovative change through new legislative pilots discussion document — a publication exploring the benefits and challenges of HMRC introducing a new approach to testing and piloting where certain legal obligations could be suspended or altered for participants
• Information and data powers call for evidence — a publication seeking views on how to update and reform HMRC’s information and data powers and accompanying safeguards which aims to improve taxpayers’ experience and reduce administrative burdens.

Getting more information and sending feedback

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External link

Employer Bulletin: June 2023