Employers sometimes pay benefits to their employees and want to pay tax on behalf of workers. A PAYE billing agreement (PAYA) is an annual voluntary agreement that allows them to do so. Not all items covered by an EPI should be reported on a staff member`s P11D form. HMRC has just published its Welsh Taxpayer Technical Guidance, and I have updated this article to reflect it. They must submit an annual calculation of the income tax payable and the Class 1B NIC. HMRC will verify the calculation and confirm the consent if the basic calculation appears to be correct. An employer can apply for an PPE at any time until July 5 after the end of the tax year on which it relates. However, it is best to apply before the start of the fiscal year to include in the agreement all eligible tax benefits. To manage their resources, HMRC requests calculations that are submitted annually until a specified date that may differ by agreement, but which is usually July 31 or August 31. It is interesting to note, however, that there is no legal time limit for submitting calculations, so no penalty can be imposed for not presenting your calculation until that date. An EPI can also help reduce employer management by removing and replacing the requirement to include certain taxable expenses/benefits in employeeS` P11Ds with an annual comparison of HMRC. If you don`t have a PSA agreement yet, our team of labour tax specialists can help you set up and contact HMRC to make sure the agreement contains everything you want to include now and in the future.
Currently, an employer must renew its PSA each year with HMRC. HMRC has introduced bills to abolish this requirement effective April 6, 2018. The proposal calls for an agreement to become a lasting agreement that lasts year after year. CAW opinions on this bill sent to HMRC are available here. HMRC publishes a series of manuals designed for its own employees. Its recent publication of an updated version of the Tobacco Products Manufacturing Licensing Licensing Scheme has led me to take a look at all its guidelines and find the ones that are most relevant to British payroll professionals. It is useful to know that all of HMRC`s internal manuals are published on the website Gov.UK a – Z. Some of them may not be at all relevant to the payroll world – for example, the beer guide, which serves HMRC employees to “understand beer.” Others are a relevant and useful source of guidance: the value of the benefits granted should be taxed under the EPI at the marginal tax rates of each worker concerned.
It is therefore important that tax rates for workers residing in each of the UK countries are also taken into account, as deceded governments (currently Scotland and Wales) are able to set the tax rates payable by taxpayers based in those countries.