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Client in Camberley London needs up to 10 payroll people at all levels, for new team.
If you can help at all please contact Reg Ruffle at reg@hrdps.co.uk or 01295 225500
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News Items – at 9th May 2007
The PAYE Regulations give the filing deadline for forms P14, P35 and P38A as “before 20th May following the end of a tax year”. The filing deadline is usually, therefore, shown as 19 May. As HMRC must have the returns before the 20th, the deadline for postal delivery is earlier than the 19th if that day is a Saturday or Sunday. In that situation, the Friday is the last possible delivery day. This is not a problem for electronic filing as the service is open seven days a week.
As 19 May is a Saturday in 2007, any year-end returns that are sent by post must be received by HMRC by Friday, 18 May. The 19 May deadline still applies to returns filed electronically.
The tax legislation provides for automatic penalties if returns are not received by the filing deadline. The penalty is £100 for each 50 employees, per month, up to a maximum of 12 months.
Example: A company with 951 employees that misses the filing deadline by just one day would pay an automatic penalty of £2000, i.e. 20 x £100.
However, under the provisions of Extra-Statutory Concession B46 Automatic penalties for late company and employers' and contractors' end-of-year returns, HMRC chooses not to impose penalties automatically where returns are received “on or before the last business day within seven days following the statutory filing date”. A business day for this purpose is any day other than a Saturday, a Sunday, Christmas Eve, Good Friday or any bank or other public holiday.
Applying the concession to the filing of payroll year-end returns in May 2007, the last business day within seven days of 19 May is Friday, 25 May. In circumstances where this concessionary filing date falls immediately before or during the final weekend in May and, in some years, the Spring Bank Holiday, HMRC’s practice is to extend the concessionary filing date to the day before their offices re-open. As it is not possible to tell when returns that are posted through HMRC letterboxes during those one, two or three days are actually delivered, they are treated as having been received in time.
Accordingly, the absolute deadline for filing postal year-end returns in 2007 is midnight between Monday, 28 May and Tuesday, 29 May. Beyond this time, penalties are applied automatically.
In principle, this special consideration should not apply to returns filed online as their precise time of delivery can be recorded. However, HMRC feels that it would be unfair to allow paper returns to be accepted up to 28 May but not online returns, so the deadline is extended to 28 May 2007 for online returns also.
Further information:
Online filing 2007 http://www.hmrc.gov.uk/payeonline/online-filing-2007.htm#w
HMRC has published a new 70-page guidance booklet, Guide to filing PAYE forms online and paying electronically, which replaces the Online Filing and Electronic Payment Handbook. It provides comprehensive guidance on all current and future online filing and payment requirements.
Further information:
Guide to filing PAYE forms online and paying electronically http://www.hmrc.gov.uk/helpsheets/mp2.pdf
HMRC has published a new factsheet, Complaints and putting things right, which explains the complaints procedures and how matters are set right when HMRC has made a mistake. The factsheet replaces the Code of Practice Putting things right. How to complain (COP1).
Further information:
Complaints and putting things right http://www.hmrc.gov.uk/factsheets/complaints-factsheet.pdf
The tax avoidance disclosure legislation was extended to NICs avoidance from 1 May 2007. HMRC has produced basic guidance for employers to clarify the rules in the context of salary sacrifice arrangements, such as those involving childcare vouchers and holiday pay schemes.
Because there is nothing in the legislation that specifically excludes salary sacrifice schemes, HMRC expects few such schemes to fall into any of the “hallmarks” that would require them to be notified to HMRC. In particular, the hallmarks require schemes to be “new and innovative” and most salary sacrifice schemes are well established.
HMRC suggests that promoters and payroll managers should consider whether a scheme includes something new, innovative or unusual in a way that schemes that were on the market before 1 August 2006 did not. If the answer is “yes” or “possibly”, HMRC’s disclosure guidance should be considered and professional advice sought.
Further information:
Disclosure of NICs schemes http://www.hmrc.gov.uk/aiu/nics-disclosure.htm
Disclosure of tax and NICs avoidance schemes http://www.hmrc.gov.uk/aiu/index.htm#guidance
The Data Protection Act 1998, which came into force in March 2000, included a number of 'transitional relief’ arrangements that allowed data controllers a set period of time to bring their personal information handling practices fully into line with the Act.
The Information Commissioner has reminded data controllers that the one remaining transitional relief arrangement ceases to apply at midnight on 23 October 2007. This arrangement relates to a number of certain manual (non-digitised) records created before 24 October 1998, including those held in structured manual filing systems. At the moment a data controller who processes such data is not bound by most of the requirements of the first five principles of the 1998 Act and the general right of data subjects to go to court to get inaccurate personal information corrected.
From 24 October, the provisions of the Act will apply in full to all manual personal records and data controllers should plan now to ensure full compliance by that date. The Act does not require that data controllers digitise or computerise old manual records.
Further information:
Data Protection Act 1998 - End of Transitional Arrangements - October 2007 http://www.ico.gov.uk/upload/documents/pressreleases
/2007/transitional_arrangements.pdf
Payroll deadlines during the next month
May 18 – (May 19 is a Saturday) – For employers required to pay tax and NICs etc to the Accounts Office monthly, this is the deadline for payment to be received by the Accounts Office, unless made electronically.
May 18 – (May 19 is a Saturday) – This is the deadline date for filing, in paper form or electronically,
- form P14 End of Year Summary
- form P35 Employer Annual Return
- form 38A Supplementary Return
May 22 – For employers required to pay tax and NICs to the Accounts Office monthly, this is the deadline for electronic payments to be cleared into the HMRC bank account. Payments through BACS must be initiated by May 18 at the latest.
May 28 – The date after which non-receipt by the HMRC of year-end returns P14s, P35 and P38A will result in late-filing penalties.
May 31 – This is the deadline for issuing P60s to qualifying employees.
June 5 – This is the final day of tax month 2. Tax and NICs etc for payments made in the tax month to June 5 are due for payment to the Accounts Office by June 19, or by June 22 if paid electronically.
Payroll FAQ's
Providing more than one mobile telephone
Are there any circumstances in which an employee can have two mobile phones at the same time without a tax charge?
Section 319 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) provides a tax exemption for “the provision of one mobile telephone for an employee without any transfer of property in it”. In principle, therefore, an employee who is provided with two mobile phones concurrently, which remain the property of the employer, will have to pay tax on one of them. The second phone is taxable as an “asset placed at the employee’s disposal” in section L of form P11D and the cash equivalent is the cost incurred by the employer in providing the phone, less anything paid by the employee towards the cost.
The legislation does not say which of the two telephones is the one that is taxable. There is nothing to stop the employer reporting the phone with the lower cash equivalent.
There are, however, three situations where an employee could have two, or even more, telephones at the same time without incurring a tax charge on them.
- Section 319 also limits the provision of a mobile phone to the use of one mobile telephone number. This makes it possible for an employee to have, for example, a mobile phone and an installed car phone with separate SIMs, as long as they share the same telephone number.
- A separate exemption in section 316 of ITEPA removes any tax liability for the provision of “accommodation, supplies and services” in circumstances where
- any private use by the employee or member of the employee’s family or household is not significant, and
- where it is used away from the employer’s premises, it is provided solely so that the employee can perform the duties of the employment.
If, therefore, the employer restricts the second telephone to business use only, that phone qualifies under the S.316 exemption and the other phone, which could be used exclusively for private use, is exempt under S.319.
The s.316 exemption also applies to a computer that meets the two conditions, so it could also cover a Blackberry or PDA which, because of having computer-type facilities in addition to being a mobile phone, is viewed by HMRC as a computer. An employee could, therefore, have a mobile phone for private use and a Blackberry or PDA solely for business use, without a tax charge for either.
- Up to and including the 2005/06 tax years, s.316 also provided a tax exemption for additional mobile phones provided for employees and for mobile phones provided for members of an employee’s family and household. That more generous arrangement was repealed from April 2006 but continues to apply to employees who already had two or more mobile phones at that time. As long as the arrangements under which the phones were provided do not change, an employee continues to be exempt from tax for the additional phone(s).
However, if the arrangement under which a second phone was provided changes, e.g. it is replaced or upgraded (other than under the terms of a warranty that was part of the original arrangement), the tax exemption ceases to apply to that phone. Similarly, if a second phone is withdrawn from one employee and given to another employee to use, any tax liability is considered in the context of the new recipient’s circumstances.
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contact: daniel.ruffle@hrdps.co.uk or reg@hrdps.co.uk
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