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Agent update highlights changes to pay and benefits reporting

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Published: 25 Jan 2022 Update History

HMRC’s latest agent update provides notice of a number of changes affecting employers and their agents. ICAEW’s Tax Faculty highlights some key items.

HMRC’s Agent Update 92, published on 19 January 2022, includes a number of items that affect the reporting of pay and benefits, in addition to covering the self assessment penalty waiver and reminders on reporting coronavirus grants.

Here are the most notable elements:

HMRC’s Online End of Year Expenses and Benefits service to be decommissioned

From 6 April 2022, the interactive PDF used to submit P11D and P11D(b), HMRC’s Online End of Year Expenses and Benefits service, will no longer be available. Instead, employers should use HMRC’s PAYE Online service. This allows:

  • submissions for up to 500 employees; and
  • online submissions of P46(car) – without the need to download the latest version of Adobe Reader or to use a certain web browser to access it.

End-of-year expenses and benefits can also be reported using commercial payroll software.

Employers can access HMRC’s PAYE Online Service using the government gateway details used for the previous service. In the event of any issues, support can be found through the help function on the PAYE Online Service or by contacting the Online Services Helpdesk.

Changes to claiming subcontractor construction industry scheme (CIS) deductions

From April 2022, HMRC is introducing an additional field for claiming CIS deductions on the employer payment summary (EPS). Limited companies must enter their corporation tax unique taxpayer reference (CT UTR) or COTAX reference number in that field to claim credit for CIS deductions.

HMRC will reject any EPS submissions that do not include the CT UTR along with a claim for CIS deductions. If the company cannot satisfy the new CT UTR validation but needs to report anything else, they should remove the claim for CIS deductions and resubmit their EPS.

If the company has lost or cannot find their CT UTR, a request for the CT UTR can be made online. HMRC will send the CT UTR to the business address registered with Companies House.

CT UTRs should not be included on the EPS for any employer who is not using the EPS to claim a CIS deduction (for example, to recover statutory payments).

Construction businesses that are not operated through a limited company should not claim a CIS deduction on the EPS. In that case, deductions should be reported and claimed on the taxpayer’s self assessment tax return.

Student loans

In addition to announcing the repayment thresholds and the deduction percentage for plan 1 and plan 4 loans from 6 April 2022, Agent Update 92 also contains the following reminders:

  • PAYE accounts should be checked for student loan or postgraduate loan start and stop notices; and
  • student loan deductions should not be made where the worker is subject to the off-payroll working rules as the worker will account for student loan obligations in their own tax return. To ensure the deemed employer does not receive student loan notices, the off-payroll worker (OPW) marker should be set in the payroll software on the deemed employee’s record.
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