HMRC published its latest edition of Employer Bulletin on 11 April 2019. It is filled with a variety of interesting articles, some of which we summarise below.
Optional remuneration arrangements
The first article is a reminder about the optional remuneration arrangement (OpRA) rules that changed in April 2017. These rules apply to employer-provided benefits-in-kind (BiK) which have the option of a cash allowance, flexible benefit packages with cash options and salary sacrifice arrangements.
From April 2017, the value of all affected BiK is now the higher of the original value or the amount foregone in the year; for previously-exempt BiK, the taxable value is the amount foregone.
Employers need to report the higher value on forms P11D and P11D(b). There were transitional provisions for arrangements during 2017/18, but these mostly ended on 5 April 2018. Some cars, accommodation and school fees are still taxed under the old rules, subject to certain conditions, outlined in the Bulletin, which also summarises the changes in early October 2018 to childcare vouchers and directly-contracted childcare. Pension contributions, pension advice, workplace nurseries, cycle-to-work and cars with CO2 emissions of 75g or less are unaffected.
Reporting when the normal payday falls on a non-banking day
Given the imminent approach of Easter, when contractual paydays may fall on a non-banking day, employers are reminded to put the contractual payday on the full payment submission (FPS) rather than the date when salary/wages are paid to employees.
We covered this in our news item earlier this month, Easter payroll procedures.
Employers who submit the FPS later than the contractual payday, perhaps because they pay their employees later than their contractual payday, should report on the FPS “Late reporting reason code G”.
Forms P11D for 2018/19
Year-end forms P11D and P11D(b) must be submitted to HMRC by 6 July 2019 and Class 1A NIC paid by 19/22 July. The article provides tips for submitting the data, including for those who use paper and spreadsheets.
Confirming a national insurance number
The Bulletin includes four tips on the quickest ways for a new employee to get proof of their NINO.
Welsh income tax
Welsh rates of income tax came into operation from 6 April 2019. Tax codes for taxpayers living in Wales now begin with C. Employers should ensure they are using the latest version. Employees are responsible for providing their employers with their up-to-date address in order to determine where they live for the devolved taxes.
We covered this in our previous news item Welsh tax changes from April 2019.
Employers who have payrolled BiK are not absolved from completing these year-end forms, as they must submit form P11D(b) to account for Class 1A NIC. They must also tell their employees what benefits have been payrolled.
From April, the amount of funds that levy-paying employers can transfer to other employers to support apprenticeships has increased from 10% to 25%. Levy payers can transfer funds to any employer, subject to conditions. These can include employers in their area, sector or supply chain, or even charities. The funds can be used to support new apprenticeship programmes or to upskill an existing workforce.
Throwing a party
HMRC sets out the rules for employers providing social functions for their employees. The article summarises the conditions for tax exemption and how to report taxable benefits.