Reporting expenses and benefits Don’t forget that you’ll also need to tell us about and pay any Class 1A National Insurance contributions due on any expenses and benefits your employees received during 2018-19 (including the payrolled ones). If you registered online on or before 5 April 2018, and you are using the Payrolling Benefits in Kind process you’ll need to send; • A P11D for any benefits you’ve not payrolled • A P11D(b) to report Class 1A National Insurance contributions on the cash equivalent, or relevant amount for OpRA (including the payrolled ones). You’ll also need to give your employee a letter telling them which benefits were payrolled, and telling them the amount of the benefit. If you didn’t register online on or before 5 April 2018 to payroll benefits in kind, then you’ll need to send; • A P11D for all benefits • A P11D(b) to report Class 1A National Insurance contributions on the cash equivalent, or relevant amount for OpRA. If you’ve payrolled informally (without registering online) then you’ll need to put a note on the P11Ds to show which benefits have been payrolled. Please write on each P11D, not just on one or on the P11D(b). You can register online on or before 5 April 2019 to payroll benefits for 2019-20 Payrolling employees: taxable benefits and expenses – GOV.UK. If you do this, you won’t need to file a P11D for 2019-20
Pensions Relief Registered Pension Scheme explanations Some of the terms used when referring to pension contributions made by employees may be causing some confusion. These terms only apply when employees are members of a Registered Pension Scheme – a scheme which is registered with HMRC in order to receive the tax benefits available. To help employers we have provided the following explanations: 1. Relief at Source This is relief that is claimed by a pension scheme administrator after the contribution is made from net pay. This means PAYE is operated on the full amount of the employee’s pay, the contribution is then made and then the pension scheme administrator claims back the basic rate of tax from HMRC. It is not relief given through PAYE at the point of paying the employee. For more information see Relief at Source guidance. 2. Net Pay This is where relief to income tax is given when the employee is paid. This means income tax is calculated after the contribution to the pension scheme is deducted from the employee’s pay. The pension scheme administrator does not claim any tax back from HMRC. It is not relief given on contributions from the employee’s net pay (i.e. after PAYE has been operated). Please note that there is no relief from National Insurance on the amount contributed. For more information see Net Pay guidance. 3. Salary Sacrifice No relief is required as the employee is receiving less pay in return for the contribution being paid. The scheme administrator must be informed if the arrangement is under the terms of a salary sacrifice as they should not be claiming relief from HMRC. Please note that pension contributions are
Tax Free Childcare Are you and your employees missing out on Tax-Free Childcare? For many working parents, childcare costs can play a large role when planning a return to work, or considering their career options and working hours. Tax-Free Childcare is a government scheme that can help, as eligible parents could get up to £2,000 per child, per year to spend on qualifying childcare. Parents are usually eligible if they (and their partner, if they have one) are; • in work or planning to return to work within 31 days • each earning, on average, at least the National Minimum Wage for 16 hours a week, currently £125.28 if they’re 25 or over. You don’t need to do anything, but telling your employees about Tax-Free Childcare could: • help them with their childcare costs • help their return to work • help them work more hours, if they want to • help you retain staff you’ve invested in. For more information visitwww.childcarechoices.gov.uk,
Scottish Income Tax The Scotland Act 2016 gave the Scottish Government the power to set income tax rates and thresholds for Scottish taxpayers for 2017-18 onwards. The draft Scottish Budget, published on 12 December 2018, confirmed that the 5 band structure and tax rates (19%, 20%, 21%, 41% and 46%) will remain the same for 2019-20. The thresholds for lower tax rates will rise in line with inflation and the higher rate threshold has been frozen. Further details on the Scottish Budget can be found on the GOV.SCOT webpage Scottish Budget. These rates will be ratified in February 2019, once passed by the Scottish Parliament. If you have any employees who live in Scotland for most of the year, they need to make sure HMRC have their correct address details on record so they pay the correct amount of income tax. Please ask them to ensure their address details are up to date by accessing either their Personal Tax Account or online at GOV.UK webpage: Tell HMRC when you change your address
Get ready for the increase in the National Minimum and National Living Wage on 1 April The National Living Wage, the statutory minimum for workers aged 25 and over, will be increasing by 4.9% to £8.21 per hour. Rates for younger workers will also increase above inflation and average earnings. The new rates will apply from 1 April 2019. The minimum wage that your staff are entitled to depends on their age and whether they are an apprentice. As the minimum wage increases more employers than ever will be directly affected, including some of those who currently pay above the minimum. Check out the new rates to see if they impact your business. For further information on getting your business ready for the increase in National Minimum Wage, register here to join one of our live webinars in March. 10 Employer Bulletin February Issue 76 Contents New Minimum Wages from 1 April 2019 In the 2018 Autumn Budget there was an announcement that the National Minimum Wage and National Minimum Wage for apprentices will increase from 1 April 2019. From January 2019 we will start to update Recruit an apprentice and Find an apprenticeship in preparation for the increase. We will review all existing vacancies and make changes where necessary, to ensure that any vacancies with a planned start date after 1 April 2019 will meet the new minimum wage requirements. We will advise you if a change is made to your vacancy so that you can check the details. You can choose to increase the apprentice’s salary above the minimum wage by editing the vacancy through Recruit an apprentice. If you have any queries, please contact us on: Telephone: 0800 015 0600.
Source of reference HMRC Employers Bulletin