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Employer Bulletin 32

15 June 2009
Issue: 4210 / Categories: News
Extracts on payrolling benefits and PAYE online

Issue 32 of the Employer Bulletin has been published by HMRC.

It contains a number of articles covering the national minimum wage, paying by direct debit, key dates and much more. Extracts from two items follow.

Payrolling benefits

Employers will probably be aware that HMRC are considering possible changes to the reporting, tax and National Insurance contributions procedures that apply to employer-provided expenses and benefits.

In particular, they are looking at the possibility of collecting tax and National Insurance through the payroll rather than through existing P11D/P9D processes.

No formal system currently allows for payrolling of expenses and benefits. However, a small number of employers, agents and payroll bureaux already have experience of using this method, typically under an informal agreement with the employer’s local tax office.

HMRC would like to hear from businesses who are payrolling expenses or benefits, or have done so in the past. Firms can help with the department’s research by choosing the appropriate online questionnaire from the two links here.

Completed questionnaires should reach HMRC by 31 July 2009.

PAYE improvements

The Revenue is introducing a new PAYE system in summer that it says will improve the service currently provided. The new automated system should deliver a faster, more efficient service for individuals and reduce some of the burden placed on employers.

For example, currently HMRC hold personal tax records over 12 regional databases. The new system will bring together all this information, creating a single record of an individual’s pay and tax details.

This will enable the taxman to view and amend an individual’s record no matter where he/she is employed in the UK, and, as a result, deal with enquiries at the first point of contact.

HMRC explain that to introduce the new system, they will need to transfer their data to the new service which will involve some temporary service interruptions.

They will provide details of these on their website, but ask that employers continue to send in forms, returns and correspondence as usual. Online submissions will be validated as normal.

Data that fails the online validation checks will be rejected and returned to employers. Good quality data will be retained and held until it can be processed on the new service. Where employers send data on paper, this will also be held until it can be captured on the new service.

During the transition, the Revenue will only be able to provide limited help to employers and will not be able to update individual PAYE records. However, throughout the period the department's helplines, both for employers and individuals, will be open.

To prepare for the move to the new system, HMRC are crosschecking the National Insurance numbers held on their systems. Where the wrong number is being used, employers will be sent a form P46-5T telling them what the right number is. The individual concerned will also be contacted.

Issue: 4210 / Categories: News
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