Employment Taxes

Five new PAYE-related consultations released

As well as finally releasing the Making Tax Digital consultations in August, the Government also launched four consultations on proposed changes to simplify the administration of employee benefits-in-kind and expenses and one off termination payments. We include brief details of these below.

Extension of the voluntary framework for payrolling consultation: the Government has published draft regulations and an explanatory memorandum for technical consultation. The draft regulations make changes to the Income Tax (Pay As You Earn) Regulations 2003 to allow employers to voluntarily payroll the benefit of non-cash vouchers and credit tokens provided to employees. These regulations will apply from 6 April 2017.  Submission Deadline: 3 October 2016.

Alignment of dates for making-good on benefits-in-kind consultation: the consultation explores the scope for aligning the ‘making good’ rules for benefits-in-kind with those which apply to ‘making good’ where the employer accounts for the benefit-in-kind in real time through Pay As You Earn (PAYE). The aim is to have a simpler and clearer system that makes it easier for employers and employees to understand their obligations.  Submission deadline: 4 October 2016.
Termination payments consultation: the Government has published its response to its consultation on termination payments held in summer 2015. The publication includes a consultation on draft legislation intended to give effect to changes to the treatment of termination payments. Under the proposals, the £30,000 exemption survives but the circumstances when it applies are restricted and Employer’s NIC becomes payable on the excess amount. Submission deadline: 5 October 2016.
Simplifying the PAYE Settlement Agreement (PSA) process consultation: the Government sets out proposals to simplify the process used for agreeing and reporting items in a PSA. Submission deadline: 18 October 2016.

Salary sacrifice consultation: the Government is seeking views about limiting the range of benefits-in-kind that can give rise to income tax and National Insurance contributions (NICs) advantages when they are provided as part of salary sacrifice arrangements. Employee contributions to employer-provided pensions, employer-provided pension advice, employer-supported childcare and provision of workplace nurseries and cycles and cyclist’s safety equipment provided under the Cycle to Work scheme will remain unaffected by this measure. Submission deadline: 19 October 2016.

The ATT Technical Team is currently in the process of gathering and analysing feedback from members. A general request for input was posted on our website with indicated response dates in September. However, if you would like to add any comment please email it to atttechnical [at] att.org.uk and we will do our best to ensure your thoughts are reflected in our written responses. We would encourage members to also send in their own separate responses to HMRC.

We will report back in December’s Winter edition of ATT Technical Team Newsletter on our finalised submissions in relation to these consultations.