Reporting the numerous sets of employee data that HMRC require after the end of the tax year is a major task for all employers to manage. There will be no COVID related ‘light touch’ from HMRC for 2021/22 returns - if you miss the deadlines you can expect to trigger penalties.
Although real-time reporting of PAYE has removed some of the year-end reporting burden, making sure you have accurate data ready in time to meet all the reporting deadlines is always a challenge.
Some of the key employer deadlines to be considered are summarised below: -
Employers must report any taxable expenses or benefits in kind provided to employees or directors to HMRC. They will also need to provide a copy of the P11D information to employees and directors. Finally, you will need to pay any tax/NIC due. The deadline for submitting P11D information to HMRC and to employees is 6 July.
If you operate a share plan or there has been any type of equity transaction, involving UK employees or directors you will almost certainly have to submit a return to HMRC. The annual deadline to submit a return to report all transactions in Employment Related Securities (ERS), also known as Share Plan Reporting is by 6 July.
Gender Pay regulations now require private sector employers with more than 250 employees, at company or entity level, to publicly report a range of gender pay information and six GPR ratios by 4 April every year. Slightly different dates apply to public sector employers who must report by 30 March each year.
Strict PAYE obligations exist for employers in the UK such that PAYE withholding is required in circumstances where an employee from an overseas parent, subsidiary or associated company visits the UK to work either for a planned project or on an ad-hoc basis. There is no de-minimis limit for this and as such PAYE is due from the first day of work in the UK.
To assist with the administration in this area HMRC introduced the Short-Term Business Visitor Agreement to enable the PAYE obligation to be relaxed in situations where individuals coming to the UK originated from countries with which the UK had a Double Taxation Agreement and would therefore not be subject to UK tax. Organisations are required to execute an agreement with HMRC which requires annual reporting of business visitors in exchange for a relaxation of the PAYE obligation (by 31 May following the end of the tax year).
Ongoing tracking of Business Travellers is required to make the annual reports and to reduce the reconciliation exercise that can be needed at year-end should relevant information not be easily accessed.
The Short-Term Business Visitor Agreement only relaxes the PAYE requirements for individuals that meet the criteria of a relevant Double Taxation Agreement. It therefore does not cover non-resident employees employed by a foreign branch of a UK company, individuals coming from non-tax treaty countries or where the treaty conditions are not met (e.g. due to a costs recharge). In these circumstances, the only option for a Company is to operate PAYE.
The Annual PAYE Scheme was introduced to combat the impracticality for employers of having to deal with employees that do not qualify for STBV treatment by allowing them to account for their visits to the UK for the whole tax year and operate PAYE at the tax year-end, with tax due and the associated RTI reporting to happen at month 12. This applies only to limited categories of visitors.
It is necessary to make an application to operate a scheme, then to report, calculate and pay the appropriate tax by 31 May following the end of the tax year.
Should you need any assistance with your Employer Year End reporting please do reach out to your usual BDO contact.
Andrew Bailey
andrew.bailey@bdo.co.uk