HMRC have published its latest Employer Bulletin February 2013 Number 43. It contains some “must know” information and some useful guidance and reminders.
The latest Bulletin is only available to download electronically from the HMRC website. HMRC can let you know when the latest version of the Employer Bulletin is available and other PAYE products are updated online. If you would like HMRC to notify you, all you have to do is sign up to their free email alert facility.
End of tax year return for 2012/13 reminder
The first important reminder in the Bulletin is about submitting an end of tax year payroll return on forms P14 and P35 (and P38A if necessary) for the tax year 2012/13. This applies to all employers other than those who joined the RTI pilot up to March 2013. The return must be received by HMRC by 19 May 2013 (which is a Sunday) at the latest. Employers who are directed to start submitting RTI returns from 2013/14 will no longer be required to submit an end of tax year return from 2013/14 onwards.
Using the HMRC Basic PAYE Tools to make a return
The Bulletin also contains important information for those very small employers (with nine* or fewer employees in a PAYE scheme) who will be using the HMRC’s Basic PAYE Tools to send HMRC a payroll return for 2012/13. The latest version of the Tools being made available in February will enable an employer to make a return for 2012/13 BUT will not allow an employer to start their 2013/14 payroll.
*The Basic PAYE Tools will actually allow an employer to have more than nine employment records entered during the tax year. However, as soon as the employer tries to enter a tenth record during the tax year, they will be reminded that they can only enter a maximum of 15 employment records before they must make other arrangements to send HMRC their RTI returns (e.g. by investing in some proprietary payroll software that includes the facility to send HMRC RTI returns). The above relaxation will give very small employers some scope during the tax year to deal with starters and leavers during the year although only having nine or fewer “active” employment records at any one time during the year.
New version of the Tools for 2013/14
HMRC’s brand new Basic PAYE Tools for Real Time Information will be available in the first week of April. Small employers will be able to use this new version to start their 2013/14 payroll for their first payday on or after 6 April 2013 and use the Tools to send HMRC the necessary RTI returns.
Important reminders concerning preparing for RTI “go live” in April 2013
As you can imagine, with RTI about to “go live” in a very few short weeks, the February issue of the Bulletin contains a lot of information to help employers prepare for RTI. A number of useful online links are given to information, guidance, and publicity material.
Expenses and benefits returns for 2012/13 and onwards
The February version of the HMRC’s Basic PAYE Tools will not be able to be used by very small employers to calculate their employee’s P11D and P9D expenses and benefits and submit the returns online to HMRC for 2012/13 and future tax years.
From April 2013, HMRC are introducing an additional method for submitting end of year expenses and benefits forms called ‘Online end of year Expenses and Benefits forms’. These new web forms will be available to download from the HMRC website to an employer’s computer and will allow them to calculate and send expenses and benefits information electronically.
Once downloaded the new web forms can be completed in part and saved if required, then submitted electronically when completed in full. These new web based forms will enable small to medium sized employers to submit expenses and benefits information electronically.
The new web forms will not mirror the paper forms, but will include all existing questions and boxes as currently shown on the paper forms, then based on the answers to a set of initial questions, the web forms will provide the employer with only those questions/boxes relating to the information they have indicated that they need to submit.
One HMRC bank account from April 2013
The Bulletin also reminds all employers about the change to one HMRC bank account for all PAYE remittances from the start of the tax year 2013/14 onwards.
Taxing trivial pension commutations from April 2013
The Bulletin also announces a change to the tax code applied to trivial pension commutations that exceed the tax-free limit from 6 April 2013 onwards.
Under pension tax rules, for registered pension schemes, pension payers are able to convert certain small pensions into a one-off cash payment. Subject to certain conditions, a maximum of 25% of the value of most of these small pensions can be converted to a tax free lump sum. The tax code is then applied to the remaining taxable portion of the lump sum.
Up to 5 April 2013, pension payers are required to operate the emergency tax code (code 810L for 2012/13) on the non-cumulative (week 1/month 1) basis on the lump sum pension payment. Applying the emergency code in this way results in many lump sum payments of this type attracting the higher, and possibly additional, rates of tax. And in many cases this leaves the payment recipient in a position where they temporarily overpay tax.
From 6 April 2013, it is proposed that the basic rate (BR) tax code (operated on the non-cumulative basis) will apply. HMRC believe this change will result in more individuals, in particular those on low to moderate incomes, paying the right amount of tax at the time the lump sum pension payment is made.