September 2019 News Update – featuring additional news developments from our newsletter series.
Welcome to August News Update – This month sees CIS makeover and delays to VAT reverse charge, PAYE RTI reviewed by HMRC, Off-Payroll updates, and a much-needed consultation into paternal leave in extreme circusmtances and more…
PAYE Real-Time Information Penalties Continuation of “Risk-Based Approach” to Charging Penalties
HMRC has undertaken a review of the RTI penalties and the risk therein for the 2019/20 tax year. This surrounds the late filing and late payments penalties all of which will see changes in how risk is assessed rather than traditional automatic penalties. This is based on a Full Payment Submission (FPS) filed within 3 days of the “payment date”. It should be noted that these changes are not a change or an extension to your statutory PAYE reporting payments schedules.
According to Accountancy Daily:
“The date for making PAYE payments to HMRC electronically is the 22nd of the month (or quarter for those eligible to pay quarterly) following the tax month or period to which they relate. For cheque payments or other non-electronic methods payment is due by 19th of the following month or quarter to which the payment relates.
HMRC may charge interest on the amount outstanding for late payment, which will accrue until the total amount is paid.
Accurate and timely reporting of payroll is really important. The payment date reported on employers’ Full Payment Submission must be on or before the date employees are paid, not the payroll run date, or another date from the payroll system. Incorrect recording of this date is one of the most common reasons for the issue of a late filing penalty,’ HMRC said in its latest Employer Bulletin.
If you are unable to report payments on time, and you have a reasonable excuse, you should use a late reporting reason code. You must include the code for every payment on the FPS where the circumstances apply.’ HMRC sends an electronic receipt to confirm a submission has been received ‘although this doesn’t mean that it’s correct or on time’, HMRC added.”
Off Payroll Working Rules Update – April 2020
The IR35 juggernaut rolls on. HMRC have announced that they will be “reforming” the operation of the off payroll working rules from April 2020. These changes will mirror public sector off-payroll developments rolled out in 2017. However, HMRC have announced that due to further consultations, greater emphasis on guidance and resource toolkit development will be made from late 2019. Educational “events” have been unveiled including ‘webinars’ along with workshops to help ‘stakeholders’ understand the Check Employment Status for Tax (CEST) toolkit – and the myriad of problems therein. The new Employer Bulletin has noted that they will use these events to field test the CEST resource. HMRC have released guidance on what businesses need to do to prepare for these changes.
“Businesses can prepare for reform by: Identifying and reviewing their current engagements with intermediaries, including personal service companies and agencies that supply labour to them; Reviewing their current arrangements for using contingent labour, particularly within the organisation functions that are more likely to engage off-payroll workers; Putting in place comprehensive, joined-up processes, for example assessing roles from a procurement, HR, tax and line management perspective, to ensure consistent decisions about the employment status of the people they engage; and Reviewing internal systems, such as payroll software, process maps, HR and on-boarding policies to see if they need to make any changes.”
CIS Website Relaunch – And Construct VAT Reverse Change Delays
The Construction Industry Scheme will be “refreshed” as part of a new makeover for the CIS ‘user experience’. The work will mean the Gov portal will be unavailable and there will be significant user engagement differences once the new platform goes live from August 19th, 2019. These changes also mirror new guidance changes from HMRC which sees the VAT reverse charge for construction services delayed until October 2020 – to help get more construction firms onboard in terms of regulatory compliance.
Government Announces, “Good Work Plan” To Support Families
A new Government consultation has been unveiled by HM Government on “high-level” options regarding the balance of gender-based divisions for paternal leave. The idea is to expand on Shared Paternal Leave Policies announced in 2015. However, as uptake has been quite low, the Government wants consultation recommendations on ways parents can share paternal leave equally. Issues have been identified like premature births and how parental leave can be legally denied to men and other such examples. The new consultation wants to explore how parents could get paid for every week their child is in hospital under certain conditions to help improve paternal bonding and to make parental leave fairer.