In its latest Employer Bulletin, HMRC confirms that late filing and late payment penalties under PAYE Real Time Information (RTI) will remain ‘risk-assessed’ for 2021/22. ICAEW’s Tax Faculty outlines the update and other key reminders from the Bulletin.
Following the approach taken in previous years, where the full payment submission (FPS) is filed late but within three days of the payment date no action will be taken. However, HMRC also warns that employers who persistently file in this timeline may be considered for a late-filing penalty or contacted as part of HMRC’s risk-based approach.
It confirms that the first penalties for this tax year will be issued in August 2021.
HMRC also urges employers to check whether they have been sent any warning messages from its generic notification service and explains how to access them. Such warnings are sent where:
- an FPS has been received late;
- no FPS has been received for a month; or
- an employer payment summary is received stating that no employees have been paid in a month.
The bulletin also highlights that the Department for Work and Pensions has started face-to-face interviews to allocate national insurance numbers to those that do not have them, but warns that the backlog is around 16 weeks.
The Bulletin highlights HMRC guidance on the tax implications of providing office equipment to employees and reimbursing employees for office equipment they have bought to work from home.
HMRC confirms that if employer-provided equipment remains the property of the employer then there is no tax charge when the equipment is returned. However, if ownership of the equipment is transferred to the employee there is likely to be a benefit charge.
It also confirms that in cases where staff have bought equipment that has been reimbursed, then no benefit charge will occur on the reimbursement even if the employer allows the employee to keep the equipment (on the basis that it is something that they already own).
HMRC reminds employers that payroll software should have been updated to include Scottish Student Loan Plan 4 and if not to contact their software provider. If their software is up to date, employers are urged to check that they are using the correct plan type, as this will impact employees’ student loan balances and take-home pay.
A maintenance update was made to the Basic PAYE Tools (BPT) at the beginning of May 2021 and the bulletin confirms that employers need to ensure they are using version 21.1. It also highlights that from April 2022, BPT will not function in a 32-bit environment, and that employers will have to have an operating system and computer equipment that can run 64-bit operations.
Reminders included in the June Employer Bulletin include that the deadline for P11D and P11D(b) is 6 July, while Class 1A payment is due by 19/21 July, including on benefits that have been payrolled. It reminds employers that they need to include “2113” at the end of their 13-character AO reference so the payment is correctly allocated.
HMRC also reminds employers who report medical benefits in kind through payroll or the P11D process that they may need to adjust the 2020/21 taxable values if medical providers have given rebates.
Following changes to the construction industry scheme (CIS), HMRC also provides a reminder that subcontractors must provide to contractors exactly the same legal business name, or trading name, that they used when registering with HMRC for CIS, along with their unique taxpayer reference. Failure to do this may result in HMRC’s systems being unable to recognise the subcontractor when the contractor tries to input the payment data.
With the off-payroll working rules now extended to clients in the private sector, HMRC provides tips as to best practice in the bulletin, as well as links to guidance and for its check employment status tool (CEST).
- Read the Employer Bulletin (June 2021) in full.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.