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Tax Facts from Learn Payroll

Articles – Archive

Frequently Asked Questions – Specific to UK Tax and Employment Legislation (UK)

FAQ Conditions of use:

UK Tax and Employment Legislation

Although great care has been taken in compilation and preparation to ensure the accuracy of the answers given to these questions, Payroll-help.com and The Learn Centre Limited cannot in any circumstances accept responsibility for errors or omissions, or for the results of decisions taken. The information given is not legal advice and is not warranted or guaranteed. If legal advice is required, a solicitor or accountant should be consulted, or the Citizen’s Advice Bureau, or another local organisation providing advice on legal, employment or tax matters.

New Frequently Asked Questions

Deductions From Wages

My husband’s employer has taken back all of his SSP and holiday pay in his last wages without telling him. This has left us short for April. Can an employer do that?

My firm wants to provide small gift vouchers in recognition for a job well done. I believe that these are taxable; however, what is the best way for dealing with the tax and NICs liabilities without passing them onto the employee?

Payroll Procedures

We have a PSA in place to include items our employees have won through various incentive schemes. The company bought some iPhones at a special discounted price of, £80. My question is when I PSA them do I put the cost to the employer or try to find out what the 2nd hand value would be? If as I suspect it would be finding out the 2nd hand value would I just need to get an estimated 2nd hand value via Googling it?
We have employees based in Spain and they are soon to be paid locally by a third party agent on our behalf as they reside there all year round. Is there any reason why they need to retained or left on our UK payroll as their earnings and deductions are being taken care of in Spain. In discussions with HR, I am saying I don’t think we no longer need to do anything. Is it down to what the contact says

Employment Status – Employed or Self-employed?

I am self-employed but my employer has asked me to go PAYE. I have been working there for 9 months and have another job. Can I become a limited company and avoid my employer being penalised this way?
Who are “employees” for payroll purposes?
I am self-employed. Am I entitled to holiday pay or any other benefits from my client?

Expenses and Benefits

If a company van is used on call outs, does this class as private use or insignificant private use? This affects whether there is a van benefit
If an employer wants to claim the VAT back on mileage reimbursements, do the VAT receipts have to at least cover the amount of money that we are reimbursing?
We are considering paying an agency worker’s mileage expenses at a rate over 45p per mile. We are unsure as to how this would be treated – payroll, P11D or is it up to the employee?

With regard to cars and mileage, we have different situations at our workplace – some employees have a company car and a fuel card and some have their own car and a fuel card. The treatment is obviously different and my main query is the treatment of private mileage in these differing situations.

Holiday Pay

The company I work for had a power failure and want employees to take annual leave as they had to be sent home. Can they do this?
How should holiday pay be calculated for shift workers?
Is it true that employees are entitled to paid holiday as soon as they start a new job? If so, how can abuse of this entitlement be prevented?
Does our way of calculating holiday entitlement on termination, based on whole months of service, meet the statutory requirements?

Statutory Payments; Maternity Pay, Paternity Pay and Statutory Sick Pay

We have an employee who has been on long term sick since the end of Dec 12. The company handbook states “The Company will pay OSP on the basis of the equivalent basic salary (inclusive of any SSP entitlement) for the following number of days in each rolling 12 months“. An employee was entitled to 8 weeks OSP which ran out at the end of Feb 12. My question is, would you look back on a daily basis to calculate any further entitlement due or would you only go back to the end of the 8 weeks paid period?
An employee finished their SMP on 17 February 2013 and is still on unpaid maternity leave. However, the software has calculated a tax refund for her for March. Is this correct?
Ou r system only allows us to register KIT days from weeks 1 to 39 in the payroll. Is there any problem paying KIT days in the unpaid portion, i.e. weeks 40 – 52?We have an employee on maternity leave and she has accepted another role in the company within her Maternity Leave Period. Although this is a reduced hours role, and a lower salary, the FTE salary is higher than the one used to calculate her Average Weekly earnings for SMP purposes. Is this a pay rise for Alabaster purposes

National Insurance Numbers

We have received a batch of NOT forms, advising us that we have some incorrect NI numbers for employees. I am a little confused as for most of the numbers, we have been given a new number to use, but the new number has no suffix letter, and our software will not currently allow us to input an NI number without a suffix letter – e.g. original number AB123456A – provided number AB678912. Does anyone know if a FPS will allow a NI number without a suffix letter?
Can somebody clarify the rules regarding the NT code? Is this carried forward to the following tax year or is it changed to the Emergency Code?

Tax Codes

My husband has two jobs at the same school; however, one of the employments is going to now be paid by the Local Authority. What does this mean for his tax code?
What Does the Letter at the Front of my Tax Code Mean?
What does the letter at the end of my tax code mean?
What does my tax code mean?

Handling HMRC and Payroll Forms

The P11d form that could be completed electronically and printed in previous years is not available on HMRC Basic PAYE tools and the only version that I can find on-line is on the HMRC website but will not allow the fields to be filled in electronically.
I have a bad feeling that I am going to have to manually complete all our P11d’s this year unless someone can please direct me to a version that I am looking
Has anyone else noticed the problem of HMRC issuing cumulative tax code notifications P6 without taxable pay and tax on them?
I have an employee that has just presented a P45 that is 8 months old. Is there a HMRC procedure to follow?

RTI

Am I correct in thinking that unless there are any adjustment values, there is no requirement to submit an EPS?
We are going to have to do a supplementary payroll in May and make advance payments in June. I have queries regarding the information on the FPS that is needed and the content of the EPS. Can anyone advise?
I’m wondering does anyone have feedback on how a pension schemes where relief is granted at source rather than via payroll should be treated in RTI i.e. as no relief should they be returned as voluntary deductions?
We process a shadow payroll to collect UK PAYE & NIC contributions for two expat employees. We mirror their overseas pay in GBP and the statutory deductions are paid over to HMRC with all other employees under that tax reference. We do not make any net pay BACS payments to them. Is a FPS required?
In the HMRC PAYE portal, the month 1 liability is showing greater than I am expecting it to be, however I cannot reconcile the amount HMRC state to any of my figures. The difference is less than 1% of the total but still a sizeable amount, and too much for me to pay without any justification. I attended a forum organised by HMRC in January and a few people on the pilot mentioned that they were experiencing this issue, whereby HMRC did not agree to their totals. Did this occur to anyone on their pilot and can anyone offer any advice?

Pensions

Could somebody please confirm that after automatically enrolling a staff member in to a qualifying pension scheme, the member can complete an opt out declaration and be removed from the scheme BEFORE a first payment has been taken?
If an employee is an eligible jobholder and is auto-enrolled, do they pay contributions on the total of their pensionable earnings or only those above the LEL?
We are being advised by our stakeholder scheme provider that we need to run a monthly report for all staff with an awful lot of data and that we have to include absolutely everybody who is in our existing DC schemes (even those that aren’t part of our current stakeholder scheme as we have some old historic schemes which have quite generous employer conts). Is this the case as it seems to be a lot of work by including those schemes
Can we postpone Auto-Enrolment more than once for the same employee?

Miscellaneous FAQ’s

We have had telephone calls from the CSA advising us that they can now ask for information over the telephone and we are legally obliged to give it. Is this correct?
When do the CDS DEO changes come into effect?
How common is it for employers under the same PAYE reference and with the same pay frequency to have different paydates
How should an Attachment of Allowances Order be handled by an employer?

Help with My Personal Questions

As you cannot answer my personal question, who can?
How can I find the name and details of my tax office?

Payroll Update 2013