Employee Benefits – What are some of the changes within the last year?
Following the large number of consultation documents released and finance act changes last year in respect of salary sacrifice, payrolling benefits, intermediary identification and reporting and apprenticeship levy this April felt quite quiet.
The payrolling of benefits by those employers who volunteered to use the scheme from April 2017 seems to have progressed reasonably smoothly. And employers who included company cars as part of the voluntary payrolling, have now moved into the requirement, from April 2018, to submit the car details via RTI rather than P11D.
Childcare Voucher End Date
HMRC have had a couple of changes of mind regarding the end of old style childcare vouchers,but have now confirmed that October 2018 will see the end of any new joiners. The changes to this end date arose from the problems HMRC have had with the roll out of their new Tax Free Childcare scheme.
The new rules apply to payments made after 6.4.18.
Payments which relate to the basic pay an employee would have earned has they worked their full notice are to suffer tax and NIC. Notice will no longer be taken as to whether these types of payments were contractual or not.
The rest of the payment should then be split between amounts treated as earnings and those amounts benefiting from the £30,000 exemption.
Non statutory redundancy pay, for example would be included as part of a relevant termination award and would no longer fall within the £30,000 exemption.
These types of payments can include a variety of types of payments and it is essential that advice is taken to ensure the tax position is clarified and any liabilities are paid in full by the due dates, to avoid any RTI failures.
Making Tax Digital
As the direct tax implications of this have been put back, the first impact will be with VAT from April 2019, although even that has been reduced to VAT return only for the first year, with supporting reports required from 2020.
It will be useful to watch from the sidelines to see how the software copes with VAT and whether any lessons arising from the VAT process can be learned quickly enough for implementation before direct tax comes on line.
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