When this came out at the start of December 2016, we were all getting into the festive mood and processing many early payrolls
When this came out at the start of December 2016, we were all getting into the festive mood and processing many early payrolls.
Relaxed and refreshed, now is the time to look at the important information that the Bulletin contained. This is all the more important given that the start of the new tax year is only three months away. Rather than giving everything away, here is a brief summary:
Autumn Statement 2016
There is a link to the draft provisions that will be included in Finance Bill 2017. Many of these will be effective 6 April 2017.
The big changes from 6 April 2017 will be the alignment of ‘making good’ dates and the introduction of a new tax and NICs exemption to cover the first £500-worth of pension advice provided to an employee in a tax year. There are also changes to the treatment of employer assets where they are made available for private use. Voluntary payrolling is also being extended to include non-cash vouchers and credit tokens.
Some good news is that employers who payroll car and car fuel benefit will not be mandated to complete P46 (Car) information and send this on the FPS.
At Budget 2017 there will be a consultation on accommodation benefit and a general review of the way that all benefits are valued.
The restrictions to salary sacrifice are going ahead from 6 April 2017!
Therefore, the article on page 3 is certainly worth a read as, importantly, it details the salary sacrifice schemes that are not changing.
Public sector off-payroll working
Another change from April 2017. Public sector employers will have to decide whether the new intermediaries’ legislation applies to their worker and, if so, payment for services will be classed as a deemed employment. This means that tax and NICs are accounted for through the payroll and reported via RTI.
We knew about it and now it is imminent. Therefore, this is certainly worth a read on page 5 and links to the latest HMRC guidance.
Changes of address
HMRC confirm that it will automatically update the employee record based on information submitted on the FPS. This is so long as 3 FPS submissions have been received with the updated address and they are all displayed in the same format. If it is not displayed in exactly the same format the address will not be updated
This is all a bit out of date on page 10, given that we have had the Scottish Budget. At this time, Derek Mackay set different tax bands for Scottish taxpayers from 6 April 2017. Therefore, the link to the Gov.uk guidance on the Scottish Rate of Income Tax (SRIT) is not really worth looking at. Page 15 of the draft Sottish Budget gives details of the proposed bands for 2017-18.
Coming UK-wide from ‘early 2017’. Employers that offer childcare vouchers or other forms of Employer-Supported Childcare will want to have a look at page 12 which confirms that current schemes remain unaffected but close to new entrants from 6 April 2018.
Looking further ahead to 2018-19, there is also information about the reform to termination payments, at which time Class 1A National Insurance contributions will be payable on payments over £30,000. This is proposed to be through the payroll. Plus, all payments in lieu of notice (PILONs) will be both taxable and subject to Class 1 NICs, regardless of whether they are provided for in the contract of employment or not.
A bumper must-read issue for all employers. It’s a shame that it came out on 15 December when the last thing that we had time for was more information from HMRC.