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Belfast telegraph

New Year payroll updates

Sam Beattie Sam Beattie

Most new year articles will start with some housekeeping…with HM Revenue & Custom (HMRC) and dynamic coding, basic housekeeping for employees is vital to stay connected and keep HMRC up to date. Employees should pay attention to three basic items, their: Address, Tax code, and student loan type (where applicable).

The first two are linked, as a significant majority of communication from HMRC is paper-based. If HMRC don’t know where you (now) live, your code updates and tax calculations could easily go astray.

Many employees now ‘carry’ an extra deduction from employer to employer in the form of a student loan. With two basic loan types along with post-graduate loans following workers from job to job, a prudent employer will have updated their on-boarding or induction processes to capture relevant information. The loan type is not indicated on the current version of the P45, and a simple way to avoid confusion is for all new hires to complete the starter checklist, which can be downloaded from HMRC. Employees might want to consider using the HMRC app, which allows them to access their PAYE records and codes and send updates to HMRC, often resulting in better response times than those achieved with a traditional letter or phone call.

Another aspect is keeping contact details with The Pension Regulator (TPR) current. As smaller employers head towards their three year re-enrolment, reminder emails could easily be missed. With a £400 penalty for missing the deadline, a few minutes updating contact details and checking contacts is time well spent.

Mobility

Mobility and the B-word (Brexit) are a fascinating combination. Together, they have the potential to change mobility tracking and reporting forever. Employers with workers in other countries, in any part of Europe, should plan a strategic review of individuals and related compliance to ensure that processes and assumptions are fit for purpose in 2020.  Simple steps such as a review of A1 documents, Foreign Tax Credit arrangements, and cross-border working patterns will go a long way to identifying employees who need additional support as they travel and/or relocate for business reasons. Compliance can be complex, but it is much easier if you get it right the first time.

2020 reminders

Other new year updates include:

Bereavement pay legislation exists for England Scotland and Wales. The lack of a local assembly could mean that NI workers may not immediately avail of this benefit which starts in April 2020 for the rest of the UK.

Termination payments over £30k will attract class 1A NIC from April. This will be reported via RTI and your software provider should include this function with their 2020 update.

With IR35 looming you might want to check out the redesigned CEST (Check Employment Status for Tax) tool on HMRC’s website. Whilst the limitations of CEST have been widely discussed and dissected; when used in the correct manner any decision should be upheld by HMRC.

Annual submissions reporting for Gender Pay Gap are due in March/April, just in case you had forgotten!

With a myriad of issues to cover, employers who outsource aspects of payroll and PAYE compliance can see tangible benefits and release internal resource to focus on core business activities.