Year end employer obligations

Featuring Holly Bedford | 19th March, 2019

Deadlines are approaching for all employers and whether you are a large business, or an individual that employs a single person such as a nanny or a carer, the same rules apply.

HMRC have a range of penalties for missing filing deadlines, making late payments or correcting errors.

Payroll submissions

By 31 May, employers must issue forms P60 to employees and send final Full Payment Submissions (FPS) and Employer Payment Submissions (EPS) to HMRC.

The last submission of the tax year needs to include an indicator that you’re making the final submission. This tells HMRC you’ve sent them everything you expected to send, and they can finalise their records for you and your employees.

Some commercial payroll software won’t let you put the indicator on an FPS. If that’s the case, send your last FPS and then send an EPS with the indicator ticked. You can also send an EPS with the indicator ticked if you forgot to put the indicator on your last FPS submission for the tax year.

Forms P11D for benefits in kind

By 6 July forms P11D and form P11D(b) must be submitted to HMRC

By 19 July any employer NIC liability must be paid.

HMRC publish agreed rates for employee expenses such as mileage and subsistence.  If different, unapproved, rates are used and these too need to be reported on Form P11D.   

A recent simplification is the introduction of trivial benefit rules, whereby certain benefits with a value of £50 or less no longer need to be included on forms P11D. Not all benefits are covered, so it is important to seek advice to ensure that the benefit really is tax free.

PAYE Settlement Agreement (PSA)

By 6 July 2019 the agreement must be in place for the 2018/19 tax year.

By 31 July 2019 the PSA calculation must be submitted

By 19 October 2019 the payment must be paid.

A PSA allows employers to settle the tax and NIC due on behalf of their employees, perhaps where it is considered inappropriate for the employee to pay or where it is difficult to split the cost between employees, such as social functions not covered by the annual party exemption.

Employee/director shareholdings and share plans

By 6 July submit annual reporting for share schemes and other share transactions with directors/employees. The rules are complex and can catch out (for example) share buy-backs.

Globally mobile employees

Short term business visitors to the UK

Short Term Business Visitors (STBV) are individuals, employed by an overseas group company, who normally work abroad, but temporarily spend time performing duties in the UK. Strictly speaking, the UK company should operate PAYE on UK duties from the first day of work in the UK. However, an ‘appendix 4 STBV agreement’ can be obtained to relax the PAYE obligations. 

By 31 May make a declaration to HMRC for any STBV under a Appendix 4 agreement that has spent more than 30 days in the UK.

UK tax resident employees posted overseas

Where an employer posts UK resident employees overseas and has an ‘appendix 5 net of tax credit scheme’ agreed with HMRC, overseas tax can be offset against UK PAYE.

By 31 May notify HMRC of any employee who has had double tax relief via a reduction in the PAYE suffered.

By 31 May provide the employees posted overseas with a letter accompanying the P60 explaining the double tax relief deductions taken from PAYE.

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