Deadlines & reporting
Ongoing
HMRC is encouraging employers to provide the information needed to get employees onto the correct pay quicker, after it was reported that more than two million employees were put on the wrong tax code last year.
HMRC want to make this easier for employers and help them to get their new starters on the correct pay sooner and has identified a number of ways that will help reduce the number of payroll queries.
Useful tips:
Obtaining personal details and entering them accurately: the best way to make sure employers are submitting the correct details about the employee, is by making sure the information exactly matches the official documents (i.e. name, date of birth, NINO)
When there’s no P45 - use the digital starter checklist
Use the right tax code with starter declaration code C: you should not use any tax code other than BR or 0T with starter declaration code C
Top tip for new employees: download the HMRC app to help monitor pay and taxes
These are the steps carried out to match an individual to their records, and determine the tax code HMRC tell employers to use:
1. Once the payroll information is submitted, HMRC match key employer submitted data with the individual’s National Insurance (NI) account. HMRC compare the following details:
National Insurance number (NINO)
Surname
Forenames
Date of birth
Gender
2. If there is a match, HMRC associate this information with the correct NI account, allowing HMRC to issue the right tax code at the earliest opportunity.
3. If HMRC can’t find a match at this stage, the correct NINO will be traced by using the employer submitted surname, forenames, date of birth and gender.
4. If there is now a match, HMRC associate this information with the correct NINO account.
5. If there is still no match, HMRC will investigate this further until the correct NI account is found, and the payroll information can be associated.
It’s essential that accurate information is provided at the earliest opportunity. Submitting the correct NINO speeds up the process and allows HMRC to correctly match an individual to their records and issue an accurate tax code to the employer.
Ongoing requirement
The government recently named and shamed more than 200 companies for failing to pay the National Minimum Wage (NMW). The list included firms of all sizes from a range of sectors and in total, the named companies were told to reimburse more than 63,000 workers, and together pay £7m in fines to HMRC.
What were the most common breaches?
39% of employers deducted pay from workers’ wages
39% of employers failed to pay workers correctly for their working time
21% of employers paid the incorrect apprenticeship rate.
With this in mind, HMRC have issued a reminder on apprentice rates.
An apprentice will get:
Paid and be entitled to the NMW
Time for training or study as part of their apprenticeship
Holiday pay and other employee rights
There are different rates of pay for apprentices depending on their age and what year of the apprenticeship they’re in. The employment contract should confirm the rate of pay.
Aged 16 to 18:
£5.28 per hour
Aged 19 or over and in the first year:
Aged 19 or over and has completed the first year:
the NMW or National Living Wage (NLW) rate for the age should be applied.
Apprentices must be paid for:
The normal working hours
Training that’s part of the apprenticeship (at least 20% of their normal working hours)
Study towards English and Maths qualifications if it is a part of the apprenticeship. The employer should allow time for study during normal working hours if this applies.
The normal working hours should be stated in the employment contract (or apprenticeship agreement). At least 20% of their normal working hours must be spent on training.
The training might take place:
At the place of work
Somewhere else like at a college or training provider
Online.
Apprentices get at least 20 days paid holiday per year, plus bank holidays.
Effective now
You can now register to payroll your benefits from 6 April 2023.
Employers no longer need to submit a P11D for each employee for whom they payroll benefits.
For large employers, this will save paper and be better for the environment.
REGISTER NOW
Informal payrolling
If you already have an informal agreement with HMRC to payroll benefits for the 2022 to 2023 tax year, you can continue to submit P11Ds marked ‘Payrolled’.
However, you should plan to formalise this agreement as soon as possible. HMRC may no longer accept new informal arrangements.
If you have had an informal arrangement in place you must register now to payroll your benefits.
Employees may be able to get tax relief on expenses if employers haven't already reimbursed them. This includes things like:
Uniforms and work clothing
Buying equipment
Professional fees and subscriptions
Using their own vehicles for work travel (this does not mean their journey from home to work)
Working from home
Anyone can check if they're eligible to claim on GOV.UK and if they are, they can set up a Government Gateway user ID to access their personal tax account and claim online.
There are companies who will make a claim on an individual’s behalf. Their fees can be up to 50% of the refund and may also include an administration charge.
The benefit of applying to HMRC through GOV.UK is that individuals get to keep all the money they’re entitled to.
