July 2024 issue of the Employer Bulletin (2024)

Introduction

In this month’s edition of the Employer Bulletin there are important updates and information on:

PAYE

• tax calculation repayments for PAYE customers

• PAYE Settlement Agreement calculations 2023 to 2024

• Guidelines for Compliance — Help with football agents’ fees and dual representation contracts

• operating payroll: Real Time Information for off-payroll working (IR35)

• Payroll Giving

• reporting advances of salary when paid on account of earnings

• P11D and P11Db for tax year 2023 to 2024

• paying Class 1A National Insurance contributions

• improving the Self-Serve Time to Pay service for PAYE and VAT customers

Tax updates and changes to guidance

• Self Assessment threshold change

• Spotlight 64 — warning for employment agencies using umbrella companies

• Basis Period Reform — reporting on a tax year basis

General information and customer support

• employment related securities — end of year return deadline for employee share schemes

• HTML format of the Employer Bulletin

• getting more information and sending feedback

HMRC’s support for customers who need extra help

HMRC’s principles of support for customers who need extra help set out our commitment to support customers according to their needs and underpin the HMRC Charter.

Find out how to get help and the extra support available.

PAYE

Tax calculation repayments for PAYE customers

HMRC is changing the way it repays the majority of its PAYE (Pay As You Earn) customers who are eligible to claim their repayment online.

Currently, any employees who receive a tax calculation letter and do not claim the repayment online automatically receive a cheque after 21 days. From 31 May 2024, cheques will no longer be issued automatically. Instead, customers will need to take an action to receive their repayment.

Customers can claim their repayments at tax overpayments and underpayments. They will also be able to request a cheque through this process if preferred. Instructions on how to claim will be available when they receive their tax calculation letter. This will include alternative routes for customers who cannot claim their repayment online.

PAYE Settlement Agreement calculations 2023 to 2024

If you have a PAYE Settlement Agreement (PSA) for 2023 to 2024, any tax and National Insurance must be paid by 22 October 2024 if paying electronically and by 19 October 2024 if you pay by post. To do this you need to submit your calculations first.

If you pay your PSA without submitting calculations it means we cannot verify what the payment is for or if it is correct.

The easiest way to do this is online. ‘Tell HMRC the value of items in your PAYE Settlement Agreement’ is a service for employers to submit their yearly calculations online. This will determine the amount of tax and Class 1B National Insurance due for the tax year 2023 to 2024.

To submit your calculations you will need:

• your employer reference

• the tax year of the PSA calculation — you must send a calculation even if it is a nil return

• the type of expenses and benefits — you should only report those included in the PSA

• the number of employees receiving each expense or benefit, including any employees that earn below the personal tax allowance

• the correct rate of tax for each employee

Once your calculation is processed, HMRC will automatically issue a payslip confirming the amount due which also includes your payment reference number.

Your PSA liability and payment will not be available to view on your Business Tax Account.

Further information onPAYE Settlement Agreements is available and additional support can be found in the following PSA online videos.

Guidelines for Compliance — Help with football agents’ fees and dual representation contracts

HMRC has recently published new Guidelines for Compliance (GfC) — Help with football agents’ fees and dual representation contracts.

These guidelines are aimed at all UK football clubs, agents, players and coaching staff. They set out HMRC’s view of the tax position when an agent represents both a club and player during a transfer or contract negotiation. This is known as ‘dual representation’.

The guidelines are a practical product for customers to refer to. You should read them alongside HMRC’s existing Football clubs: payments to intermediaries guidance.

The guidelines:

• set out HMRC’s views on dual representation contracts

• help clubs, players and agents lower their compliance risk

• detail evidence and documents that customers should keep to support any tax position

• explain HMRC’s view of the latest FA Football Agent Regulations published on 1 January 2024

• set out any payroll reporting obligations

More information on how Guidelines for Compliance help you with tax is available.

Operating payroll: Real Time Information for off-payroll working (IR35)

The off-payroll working rules have been in place for several years. The rules were introduced to ensure that individuals who work through an intermediary such as a Personal Service Company pay broadly the same Income Tax and National Insurance contributions as other employees working in a similar way.

Where an individual is engaged through an intermediary, the responsibility for determining whether the rules apply moved to public sector organisations from April 2017, and medium and large-sized organisations, from April 2021. Where the rules apply, the individual is classed as a deemed employee.

If you are the deemed employer, you should add the deemed employee to your existing payroll like any other starter, or if you prefer you can set up a new payroll specifically for deemed employees. A record should be kept of any payments, as well as the amounts of Income Tax and National Insurance contributions deducted, which must be reported to HMRC under Real Time Information (RTI) using a Full Payment Submission.

When running payroll, the RTI flag (sometimes referred to as the off-payroll worker marker) should be set to show the individual is an off-payroll worker. This ensures that the engagement is treated correctly for tax purposes and is reflective of the status determination, which will have been provided to the worker. It is important to use the RTI flag correctly because it helps to ensure that the final annual tax position for each individual is accurate, without the need for any reconciliation.

Deemed employers must not make deductions for student or postgraduate loan repayments from payments made to their deemed employees. The deemed employees are responsible for making these loan repayments through their own income tax self-assessment tax returns after the end of the tax year.

There is more information on who is affected by the off-payroll working rules from April 2021.

Additional guidance about operating PAYE within the off-payroll working rules is available.

Payroll Giving

The UK is one of the most generous countries in the world, with more than two thirds of us giving to charity on a regular basis and a record £12.7 billion given by the public in 2022.

Payroll Giving gives your employees the opportunity to support charities and receive relief from tax for their whole donation, while enabling you to further your corporate social responsibility. Tax relief is given to an employee that regularly donates at source by direct deduction from their salary. The support your employees provide to their chosen charities enables those charities to make plans and focus on their objectives.

The level of tax relief given depends on the rate at which the individual is taxed at, but all the relief for a donation is kept by the employee.

If you do not have a scheme already set-up you will need to contact an approved Payroll Giving agency who will provide you with a contract setting out the details of the scheme, along with all the necessary forms to operate the scheme.

More guidance can be found at Chapter 4: Payroll Giving.

Reporting advances of salary when paid on account of earnings

This article relates to salary advance arrangements between an employer and an employee, allowing employees access to some of their earned salary before their normal pay day. Employers may also make similar arrangements through a third party. These arrangements are commonly known as Salary Advance Schemes.

In Employer Bulletin 100 edition in February 2023, HMRC summarised the legislative position at that time and its intention to amend secondary legislation so that salary advances would have to be reported with the remainder of the employee’s salary on or before the employee’s contractual pay day.

HMRC has now amended the legislation for employers whose employees receive advances of salary either directly from the employer or through a third party. Where the amended legislation applies, employers must not report a salary advance to HMRC’s Real Time Information (RTI) system until the payment of the remainder of the salary instalment. This means HMRC will now only expect one RTI report for each pay period.

The amendments apply when certain conditions relating to the salary advance are met.

These conditions are:

• the employee’s salary is ordinarily paid at regular intervals of between one week and one month and the employer pays part of the salary in advance

• the salary advance reasonably represents work undertaken or obligations performed by the employee under their contract with the employer and no other relevant payment for this work has been made

• the employer makes a regular relevant payment to the employee at the regular payday after the advance payment is made, they should reduce the regular relevant payment by the amount of the salary advance

This legislation took effect from 6 April 2024.

The reporting obligations remain with the employer where a third-party scheme provider is acting on the employer’s behalf.

Other forms of salary advance exist, including long-term advances, often made for specific purposes such as the purchase of a bicycle, season tickets, or moving expenses. These are not considered payments on account of earnings, so fall outside the scope of this article. CWG2 1.8.1 Advance of Salary — Real Time Information (RTI) reporting offers further guidance.

P11D and P11Db for tax year 2023 to 2024

P11D and P11D(b) filing and payment deadlines

By 6 July 2024, you should have told us online about any Class 1A National Insurance contributions (NICs) that you owe for the tax year ending 5 April 2024. If you have not already done so you need to submit them without delay as failure to do so may now result in a penalty.

Any Class 1A National Insurance you owe must reach us by 22 July 2024.

It is also important that you complete your P11Ds correctly first time. If you make a mistake, you must now complete the online P11D amendment form to alter the incorrect submissions. Further information can be found at expenses and benefits for employers.

There are a number of live webinars available covering submitting your P11D and P11D(b). Further guidance on how to complete a P11D and P11Db is available.

Since 6 April 2023 you must submit your P11D and P11D(b) online.

How to submit P11D and P11D(b) online

You can use the following quick and easy online methods:

• commercial payroll software

• HMRC’s PAYE Online service

You must submit all your P11D and P11D(b) together in one online submission.

What to file

If you paid any benefits and or non-exempt expenses, or if you payrolled any benefits, you need to file a P11D(b). Include the total benefits liable to Class 1A NICs, even if you taxed some or all of them through your employees’ pay.

The P11D(b) is used to report any employer’s Class 1A National Insurance contribution liability.

You need to submit a P11D for each employee in receipt of benefits and or non-exempt expenses, unless you registered with us online before 6 April 2023 to tax them through your payroll. If you did not register online but then went on to tax some or all benefits through your payroll, you still must submit a P11D online for all benefits that were not payrolled.

If you have not already registered online to payroll your company benefits, you may wish to do so now ahead of the 2025 to 2026 tax year. This will mean you no longer need to send P11Ds, if you can payroll all your benefits.

From 6 April 2023 HMRC no longer accepts informal payrolling of benefits.

Nothing to declare

You only need to make a declaration if HMRC has asked you to submit a P11D(b) and you have nothing to declare.

You only need to tell us that you do not need to make a return if we sent you an electronic notice to file a P11D(b) or a reminder to file a P11D(b) letter. You can declare a no return of Class 1A National Insurance contributions.

Common mistakes when completing a P11D or P11D(b)

Some common mistakes to watch out for are:

• do not put ‘6 April 2023’ in the start date and or ‘5 April 2024’ in the end date for your company cars, unless they are genuinely the dates your employee received or returned a company car

• your submissions of P11D and P11D(b) must be done all together, you are unable to submit over several days — only submit once you have completed all P11Ds and your P11D(b)

• when reporting a fully electric car, make sure you have included the approved CO2 emissions figure when reporting a hybrid car with an approved CO2 emissions figure between 1 and 50g/km, make sure you have included the approved zero emissions mileage

• only send one P11D(b) for each scheme, showing the total amount due — do not send a separate one for employees and directors, as we treat each separate P11D(b) as an amendment to any we have previously received

Check P11D(b) to see if you need to use the ‘adjustments’ section.

Company Car tax Calculator

The new version of the Company Car Tax Calculator is available. For any car changes that an employee has within the Tax Year, a P46 Car form must be submitted.

Paying Class 1A National Insurance contributions

Electronic payments for Class 1A National Insurance Contributions (NICs) declared on your P11D(b) return for the tax year which ended 5 April 2024 must clear into HMRC’s account by 22 July 2024.

Use the right payment reference when paying Class 1A NICs

Make sure your payment is correctly allocated by providing the correct payment reference.

Use your 13-character Accounts Office reference followed by 2413. The reference should have no gaps between the characters.

Adding 2413 is important because 24 tells us the payment is for the tax year which ended 5 April 2024, and 13 lets us know the payment is for Class 1A NICs.

Further information on how to pay your Class 1A National Insurance Contributions is available.

Improving the Self-Serve Time to Pay service for PAYE and VAT customers

HMRC is providing enhancements to its online services to help make it easier for VAT and PAYE customers to pay what they owe.

Where customers are unable to pay their VAT or PAYE bill, we may be able to help by setting up a Time to Pay arrangement. This is where a customer pays what they owe in affordable monthly instalments.

Since the end of last year, we have increased eligibility requirements for both online services. This means that more customers are now able to use them.

You can set up an employers’ PAYE payment plan online if you:

• have missed the deadline to pay an employer PAYE bill

• are registered for digital services

• owe £50,000 or less

• have debts that are 5 years old or less

• do not have any other payment plans or debts with HMRC

• have sent any employers’ PAYE submissions and Construction Industry Scheme returns that are due

You can set up a VAT payment plan online if you:

• have missed the deadline to pay a VAT bill

• owe £50,000 or less

• have a debt for an accounting period that started in 2023 or later

• do not have any other payment plans or debts with HMRC

• have filed all your tax returns

You cannot set up a VAT payment plan online if you are in the Cash Accounting Scheme, Annual Accounting Scheme, or you make payments on account.

Helping customers self-serve through our digital channels reduces calls to our helpline, enabling us to support more customers.

Tax updates and changes to guidance

Self Assessment threshold change

For the 2023 to 2024 tax year, the Self Assessment threshold for customers taxed through PAYE only, will change from £100,000 to £150,000.

Customers should have received a letter confirming they do not need to complete a tax return if they submitted a 2022 to 2023 tax return showing income between £100,000 and £150,000 that is taxed through PAYE and they do not meet any of the other criteria for Self Assessment.

For the 2023 to 2024 tax year, customers will still need to submit a tax return if their income taxed through PAYE is below £150,000 but they meet one of the other criteria, such as:

• receives any untaxed income over £2,500

• partner in a business partnership

• has to pay the High-Income Child Benefit Charge

• a self-employed individual with gross income of over £1,000

From the tax year 2024 to 2025 onwards, the income threshold to complete a tax return for PAYE-only taxpayers will be removed. Customers will still be required to submit a return if they meet any of the other criteria listed above.

You can check if you need to send a Self Assessment tax return through the online tool.

Spotlight 64 — warning for employment agencies using umbrella companies

HMRC is aware of some umbrella companies who use employment and recruitment agencies to promote their tax avoidance schemes.

Warning for employment agencies using umbrella companies (Spotlight 64) highlights signs that employment and recruitment agencies should look out for which may indicate an umbrella company is operating a tax avoidance scheme.

As a business you need to be aware of the potential dangers of umbrella companies that operate tax avoidance schemes. Spotlight 64 details potential risks for businesses using non-compliant umbrella companies, these include potential penalties and reputational damage.

Spotlight 64 also outlines steps businesses can take to protect themselves and their workers. Further information on how to reduce your risk of using an umbrella company who operates a tax avoidance scheme is available.

If you suspect an umbrella company is not complying with the tax rules, you can report it to HMRC.

Basis Period Reform — reporting on a tax year basis

From April 2024, if you are self-employed or in a trading partnership, you will have to report your profits on a tax year basis.

If you do not already do so, you will need to declare your profits from the end of the previous accounting period in 2022 to 2023 up to 5 April 2024. Any additional profit, after overlap relief will be transitional profit. By default, you will only need to pay this over the next 5 years including 2023 to 2024. Accounting periods ending on 31 March will now be treated as equivalent to those ending on 5 April.

To help you calculate your overlap relief and transitional profits, watch a video about basis period reform.

Get help with basis period reform (moving to the new tax year basis).

We have also launched a full package of online interactive guidance to support completion of the return and working out transitional profit for these cases. Any figures entered into the interactive guidance do not form part of the return itself, it is there to guide completion of the boxes on the return.

Profits incurred in the 2023 to 2024 tax year can be reduced by any overlap relief which is entered on the 2023 to 2024 Self Assessment return. You can use our online service to get your overlap relief figure.

Further guidance and support on basis period reform is available.

General information and customer support

Employment related securities — end of year return deadline for employee share schemes

Gifts and awards of shares in companies, often known as employment related securities (ERS), are commonly used by employers to reward, retain, or provide incentives to employees.

If you operate an ERS scheme you should have filed an end of year ERS return, including nil returns on or before 6 July 2024 for the 2023 to 2024 tax year. You should have done this for every scheme that is registered on the ERS online service against your PAYE scheme.

If you missed the deadline a £100 late filing penalty will be issued to the address of the associated PAYE account.

Additional automatic penalties of £300 will be charged if you have not submitted the return three months after the original deadline of 6 July 2024. A further £300 will be charged if it is still outstanding six months after this date.

The charge description for penalties relating to employee share schemes will refer to employment related securities.

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

To submit an end of year return you must have already registered your scheme on the ERS online service. To register, you need an employer PAYE reference number.

If a scheme has been registered in error, or is no longer operating, the scheme must be ceased online. This cannot be done by an agent, only the employer can cease the scheme online.

An ERS scheme needs to be linked to a live employer PAYE scheme. If you are closing your PAYE scheme, you may also need to cease your ERS scheme.

Once a scheme is ceased, an annual return must still be submitted for the tax year in which the final event date falls.

HTML format of Employer Bulletin

Since September 2020, material published on GOV.UK or other public sector websites must meet accessibility standards. This is so they can be used by as many people as possible, including those with:

• impaired vision

• motor difficulties

• cognitive impairments or learning disabilities

• deafness or impaired hearing

There is now a contents page, with links, which is fully scrollable. Articles have been put into categories under a heading which is within the introduction to make it easier to find the updates and information you are interested in.

The HTML format does allow you (dependent upon your web browser):

• to print off the document should you wish to keep a paper file:

  • select the ‘Print this page’ button underneath the contents and print to your local printer

• to save the document as a PDF:

  • select the ‘Print this page’ button and using the drop-down list on the printer select ‘print to PDF’, which allows you to save as PDF and file electronically
  • on a mobile device you can select more options, then select options to be able to save as PDF

Getting more information and sending feedback

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Send your feedback about this Employer Bulletin or articles you may wish to see, by email to sean.connolly@hmrc.gov.uk.