HMRC has released the latest issue of the ‘Employer Bulletin’ publication which includes summaries of recent changes and updates that have been announced that are relevant to employers and agents.
The topics covered in the latest edition include the following:
- End of year reporting. Employers should be starting to prepare for 2016-17 final payment submissions and end of tax year processing. From 6 March 2017 HMRC will accept a final FPS or EPS for the tax year ending 5 April 2017 with or without a completed checklist. The end of year checklist for FPS or EPS is no longer mandatory. Employees also need to be given a P60 if they are employed on 5 April 2017. The deadline for this is 31 May 2017.
- Expenses Exemption. A new exemption was introduced for amounts which would otherwise be deductible from 6 April 2016. This means that employers no longer need to apply to HMRC for a dispensation in relation to employment expenses or benefits-in-kind (BiKs) that they pay, reimburse or provide to employees where the employee would be able to claim a fully matching tax deduction. In addition, the employer needs to report paid or reimbursed expenses where they meet conditions under the new legislation.
- Paying tax through PAYE. From May 2017, HMRC will begin making automatic adjustments to PAYE tax codes as they happen, rather than waiting until the end of the tax year. This is one of the required steps as HMRC moves towards a fully digital tax system by 2020. HMRC will publish more information on this change for employers and employees over the coming weeks.
- Apprenticeship levy. The new levy comes into effect from 6 April 2017 at a rate of 0.5% of the employer’s ‘pay bill’. Only employers with annual pay bills greater than £3 million, and some connected companies and charities with pay bills less than this amount, will be required to pay the apprenticeship levy. The apprenticeship levy applies to all employers operating in the UK, not just employers in England and not just employers already employing apprentices. The first apprenticeship levy report must be made by 19 May 2017.
- Direct Recovery of Debts (DRD). The DRD powers allow HMRC to target non-compliant taxpayers that owe more than £1,000 and who have sufficient funds in their accounts to pay. The powers have been expanded to include PAYE debts from early 2017.