Weekly News Update from HMRC (5th August 2011)

The following information is the latest update from HMRC via their informal newsletter to stakeholders. Please do remember this is an informal update shared with representatives for the benefit of members.

1. End of Year Reconciliation

HMRC advised that they would be starting the 2010-11 end of year reconciliation process for individuals from mid July 2011 and that would be dealing with customers who are due a refund first. This process is now well underway.

HMRC will send P800 tax calculations later in the year to people who have paid too little tax and will let them know nearer the date when they start to issue these calculations.

2. P11D processing

HMRC are processing the P11Ds for customers who receive taxable expenses and benefits. End of year reconciliations resulting in a tax refund will be sent to customers over the coming few weeks. Those resulting in an underpayment will be sent later in the year. Customers will be advised of any change to their tax code for the current year as a result of the processing of the P11D.

Acas Advice for Employees & Employers following riots

It is awful the sight of the recent riots in the UK, but it is just another ‘thing’ that we have unfortunately to deal with. In light of the disruption to business that the rioting in London and other major cities has caused, Acas have published useful advice for employers and employees affected. This is just a guide as printed by Acas, however for further information it is strongly recommended to visit the Acas website

Acas’ advice to employers and employees who may be affected by the riots is to:

• keep in touch with each other – if you can’t get to work, try and get in touch with your employer to let them know. If your business has been damaged, contact your employees to discuss work arrangements
• be flexible about working hours and location, perhaps using smart phones and laptops to help you keep working
  where possible
• be fair – as an employer, try and take into account the circumstances surrounding absence or timekeeping
  issues before deciding on the action you might take – in terms of leave and pay.

Key points to remember

Employees are not automatically entitled to pay if they are unable to get to work because of travel disruption, and there is no legal right for staff to be paid by an employer for travel delays – but your business may have its own contractual arrangements.

An employer can decide when some or all of an employee’s statutory (legal) holiday entitlement must be taken. However, they must provide a minimum notice period before taking statutory leave. The notice period is double the length of period of leave the employer would like them to take. For example, if an employer wants you to take one day’s leave, they must give you two day’s notice.

If an employer gives you additional holiday leave over the statutory minimum then there are no rules on how they ask employees to take this, unless this is set out in a contract or staff handbook.

Unpaid leave

An employer could suggest that an employee takes a day of unpaid leave if they are unable to travel to work. However, unless this is included in their employment contract, they cannot force staff to agree to this.

Or an employer could require employees to take a day’s contractual holiday entitlement if staff cannot travel to work due to the
disruption.

Time off to look after children/dependents

If an employee cannot get to work because their child’s school is closed or normal child care arrangements are disrupted, they may have the right to time off for dependents.

Workplace closures

If no work is available to an employee (e.g. the office has closed and they do not work at home) and they are available to work, then an employer has no right to refuse to pay them. The employer also cannot insist that the employee should take annual leave unless they are able to give adequate notice.

Weekly News Update from HMRC (29th July 2011)

The following information is the latest update from HMRC via their informal newsletter to stakeholders. Please do remember this is an informal update shared with representatives for the benefit of members.

1. Employers who wish to review the PAYE payments they have made

In April 2011 Employer’s Bulletin (page 21) HMRC discussed changes in the way it will respond to employers’ and agents’ requests for details and schedules of payments they have made.

The purpose of this article was to ask employers and agents to avoid using HMRC’s records as a first step in creating or reconciling payment schedules. The article explained that it is an employers’ responsibility to keep records and that Form P32 is readily available for use as a payment record. HMRC will, however, continue to provide help either through the Payment Helpline or in writing where an employer wants to know about the allocation of the last two or three payments that have been made.

HMRC’s major change to its approach is where employers have tried and failed to reconcile the payment position using their own records. It now asks that employers forward to them the payment details that they hold rather than asking HMRC to provide a full payment record. HMRC will then review the details sent and reconcile them against its own records. The reason for this change is to ensure that they are reviewing payments where there is an identified problem, rather than issuing large amounts of information to employers which often proves to be of little practical value.

If a large employer are having difficulties in reconciling payments they should approach their Customer Relationship Manager as before.

From April 2012, HMRC are introducing an online tool which will allow employers and their agents to view their payment history online. The tool will not initially show full historic data but is expected to begin by showing all of the year 2011/12 and build year upon year until, eventually, a full six year payment history will be available.

2. Students and tax

In HMRC’s original Press Release of 20th July to remind students that they do not have to pay tax on the money they earn from their summer jobs, it stated that the form P38(s) should be returned to HMRC. This was incorrect and has now been changed to confirm that the completed form should be given to the employer, who should retain it. All other guidance remains correct and HMRC apologise for any confusion caused.

Pension Reforms & Auto-Enrolment October 2012 – Guidance

The Pensions Regulator has released online interactive tools to help smaller businesses begin preparing for automatic enrolment.

By filling in basic information, such as their PAYE reference, the number of people they employ and salary information, employers can find out more detail about:

• when the changes to pensions law will affect them
• which staff need to be automatically enrolled into a pension scheme
• how to automatically enrol staff
• how much they will need to contribute to their staff’s pension

Click on this link to find out when your company needs to implement http://www.thepensionsregulator.gov.uk/employers/tools.aspx

Further Updates to Tax Codes after P45 has been issued

Further to their information detailing what codes to use for final payments when an employee has left and been issued a P45, on 1st August HMRC have provided an update on what to do when a final payment is made up of share scheme related income and also a standard payment.

Tax code BR is operated on share related income and 0T on the standard payment.

As previously noted HMRC recognises this causes employers, share scheme administrators and software developers with a significant issue when the mixed payment is made as one, or separately but in the same tax period. HMRC intends to consult further on this issue, and will consider the options available. HMRC will inform all parties concerned when a decision is reached.

With regard to the above scenario and the tax code that should be entered on the individuals P14. HMRC’s advice is to record tax code 0T as the final tax code on the P14.

Please email sdsteam@hmrc.gsi.gov.uk if you have any queries about this guidance.

Have you changed HMRC bank details?

A reminder that from 9 August 2011 HMRC’s old bank accounts will close and you will no longer be able to use the Bank of England accounts.

 

If you haven’t already done so, follow this useful link to HMRC which details the changes that are effective – Envizage Ltd keeping you informed!

http://www.hmrc.gov.uk/news/bankaccounts-close.htm

Employers – Duty to consider request to work beyond retirement

No-one wishes to face retirement and in the face of the current climate no-one can really be without work. A recent employment appeal tribunal has held that a request to remain in employment after the age of 65 must be considered ‘in good faith’.

An employer may not rely on a blanket policy of requiring employees to retire at the age of 65; even if such a policy is in place (which is in itself permissible), it must approach requests to be allowed to continue working with an open mind.

Daniel Barnett’s Law Bulletin reports:

In the case of Ayodele v Compass Group, the EAT has held that a request to remain in employment after the age of 65 must be considered ‘in good faith’. An employer may not rely on a blanket policy of requiring employees to retire at the age of 65; even if such a policy is in place (which is in itself permissible), it must approach requests to be allowed to continue working with an open mind.

Mr Ayodele was informed by his employer of its intention to retire him at age 65 and his entitlement to request an extension. He did so, but his request was refused without reasons, as was his appeal. He brought a claim for unfair dismissal and age discrimination. The employment tribunal upheld the Claimant’s claim that he had been unfairly dismissed on the basis that the Respondent had not given genuine consideration to the request and was therefore in breach of their obligations under paragraphs 7 and 8 of Schedule 6 to the Employment Equality (Age) Regulations 2006.

Unusually, at first instance the Claimant gave evidence that there had been substantial discussion of his request, whereas the Respondent’s witness asserted that he had already decided that the policy would apply rigidly and the meetings were only a formality. On the basis of the Respondent’s account, the ET and EAT held that a duty to ‘consider’ a request necessarily connoted an obligation to consider in good faith, in the sense that an employer must genuinely consider whether it should be accepted. However, the EAT noted that it will usually be very difficult to show bad faith. No inference can be drawn from the refusal of a request, nor from the fact that a policy exists of not agreeing to such requests.

Latest version of popular Basic PAYE Tools launched – HMRC

The very latest version of HMRC’s Basic PAYE Tools can now be downloaded from Business Links website. Click on the link to access the software.

Basic PAYE Tools

Weekly News Update from HMRC (7th July 2011)

The following information is the latest update from HMRC via their informal newsletter to stakeholders. Please do remember this is an informal update shared with representatives for the benefit of members.

1. 2009-10 Penalties for outstanding P11D(b) Returns for Class 1A National Insurance contributions

The 2009-10 P11D(b) Return for Class 1A National Insurance contributions (employer return of expenses and benefits) was due by 6 July 2010 and is now over 12 months late. This week, HMRC began to issue third interim penalties to those employers whose returns still remain outstanding. Previous interim penalties were issued in November 2010 and March 2011.

For more information regarding these penalties please go to Penalties for outstanding P11D(b) returns

2. When an employee receives payments in the form of employment related securities after leaving

Payments in connection with employment related securities, including cash payments arising from those securities, that are made to an employee after leaving are still taxed at BR (W1/M1) non-cumulatively.

Other payments made after leaving are taxed using code 0T.

You can access the full details HM Revenue & Customs: Summary of PAYE regulation changes coming into effect on 6 April

PAYE Tax Codes BR & 0T

A reminder of the new rules on how a PAYE tax code should be applied to ex-employees after form P45 has been issued.

For further explanation and guidance, click below to view a PDF on the new rules that came in in April 2011.

PAYE – Treatment of Leaver Payments