HMRC’s April 2017 Employer Bulletin published

Essential reading for employers and payroll agents 

HMRC has published the latest edition of its bi-monthly journal Employer Bulletin. Employers can subscribe free for the Bulletin to be sent to their email inbox when published – see link on page 1 of the Bulletin.

Some of the topics covered are noted below but see the Bulletin itself for details, weblinks to further guidance, relevant forms, etc:

  • Reporting benefit-in-kind (bik) and expenses 2016/17 – this includes hints for P11D preparers (deadline 6 July) and payrollers (remember to report Class 1A NIC on P11D(b) even if payrolling BiK), and instructions for employers and employees when submitting claims for tax relief for expenses;
  • Apprenticeship levy – which is payable even if you don’t employ apprentices, and accessing apprenticeship funding;
  • Paying the right amount of tax via PAYE – a reminder that HMRC will be amending code numbers more frequently in future to help taxpayers pay the right amount of tax in year and that employees can help to make this work by using their online personal tax account at gov.uk/personal-tax-account;
  • Scottish income tax – the correct rates of tax must be used for Scottish taxpayers who are distinguished by an S prefix in their code numbers. Affected employees need to keep their addresses up to date on HMRC’s records, which they can do using their personal tax account;
  • Employer-provided child care vouchers – the tax free amount depends on the recipient’s income level. This is not a devolved matter so the same income levels apply throughout the UK;
  • Student loans – thresholds (make sure you are operating the correct plan), interest rates (from 6.4.17 interest rates on Plan 2 loans will be set by the Student Loans Company at a rate depending on an individual’s income), and what to do if you are a ‘fee-payer’ deducting tax and NIC on a deemed employment under the new off-payroll working in the public sector regime (ignore student loan start notices and prompts and do not deduct student loan repayments – easier said than done in a fully-automated payroll which does not have a ‘flag’ to distinguish real employees from deemed employees);
  • PAYE late filing penalties – these continue to be levied on a risk assessed basis. 2016/17 Quarter 4 penalties will be issued from 8 May.  Use the online appeals service if needed as this is the quickest way to get a decision;
  • Tax relief for employees for expenses not reimbursed by employers – employees can claim tax relief themselves, most common are professional subscriptions, business mileage if using their own car or fuel costs up to 45p (25p over 10,000 miles) if using a company car, travel and overnight expenses, and cleaning repairing and replacing small tools and specialist clothing;
  • Increased rates of national minimum and national living wage from 1 April – there are five different rates dependent on age and whether the employee is an apprentice;
  • New regime from 6 April for valuing employer-provided benefits-in-kind where the employee can choose between cash and a BiK – this affects ‘flex bens’ schemes and where the employee has for example a ‘car allowance’;
  • Repayments – please provide HMRC with bank account details – this can be done via gov.uk if your payroll software does not provide this facility;
  • Paying HMRC – use HMRC’s correct account and cite the correct reference. Note that 22 April falls on a weekend this year;
  • Auto-enrolment – the Pensions Regulator has advice on its website; and
  • HMRC webinars – you can attend HMRC online webinars on various employer-related (and other) topics including the construction industry scheme. You can ask questions too, many of which HMRC replies to during the webinar.

We recommend that all employers and payroll agents read Employer Bulletin. If you have any comments, the Bulletin invites you to contact the Editor, or you can post a comment below or send a note to peter.bickley@icaew.com