Highlights of HMCR's latest Employer Bulletins
17 March 2020: ICAEW’s Tax Faculty summarises HMRC’s latest Employer Bulletins, which included commentary on the Budget announcements and information on the changes to off-payroll working.
HMRC has published two editions of its Employer Bulletin recently; on 12 February it issued its regular bi-monthly edition and on 13 March it published a Spring Budget 2020 edition.
The Spring Budget 2020 edition contained commentary on a number of measures that relate to employers, including the latest update to support public services, individuals and businesses that may be affected by COVID-19.
The Budget contained a plan to support public services, individuals and businesses that may be affected by COVID-19. These include:
- For businesses with less than 250 employees, the cost of providing two weeks of COVID-19 related statutory sick pay per employee will be refunded by the government in full. HMRC is working on how employers will be able to recover the SSP.
- HMRC has set up a dedicated helpline to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities receive support with their tax affairs. Businesses may be able to agree a bespoke time to pay arrangement. HMRC’s dedicated helpline is 0800 0159 559.
Other employer-related Budget measures effective from 6 April 2020 include:
- NIC thresholds for employees and the self employed will rise to £9,500 per year.
- Secondary NIC employment allowance increases by £1,000 to £4,000. Note that, as previously announced, eligibility rules for claiming the employment allowance will change – the £4,000 will count towards de minimis state aid ceilings.
- The recommendations of the loan charge review that are going to be enacted will apply retrospectively from 5 April 2019. The changes will also benefit those that have made, or are due to make, certain voluntary payments to HMRC under a final settlement agreement.
- All new cars provided to employees and available for private use that are first registered from 6 April 2020 will be taxed according to the CO2 emissions figure, measured under the Worldwide Harmonised Light Vehicle Test Procedure system.
- The maximum flat rate tax deduction available where employees incur additional household costs where they work at home under homeworking arrangements will rise from £4 per week to £6 per week.
- The off-payroll working regime will be modified for the public sector and extended to medium and large-sized organisations in the private sector.
- The two income thresholds used in calculating the tapered annual allowance will increase and the minimum tapered annual allowance will decrease.
- The government will publish a ‘call for evidence’ on how the two methods of tax relief on pension contributions, ‘net pay’ and ‘relief at source’, can provide different outcomes for lower earners.
- The lifetime allowance will be £1,073,100.
- Legislation will be introduced to enable collective money purchase pension schemes (also known as collective defined contribution pension schemes or CDCs) to operate as registered pension schemes.
As from April 2021, an NIC ‘holiday’ for employers that hire former members of the UK regular armed forces will exempt employers for any NIC liability on a veteran’s salary up to the UEL in their first year of civilian employment. The design of this relief will be consulted on.
The February edition contained information regarding off-payroll working rules with links to guidance, the latest NIC and statutory payments rates, national minimum and living wage rates from April 2020, an update on reporting expenses and benefits, and a reminder about PAYE end-of-year reporting as well as useful information regarding workplace pensions, student/postgraduate loans, changes to employment allowance and the latest update regarding enhanced entitlement to parental bereavement leave and pay.