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Peter Arrowsmith FCA highlights a selection of NIC and payroll matters and an interesting practical point for employers with student workers.

Payrolling benefits in kind and expenses

We were, on PBR day, promised amongst other things a consultation on putting benefits in kind, etc through the payroll and abolishing P11Ds, P9Ds, P11D(b)s and P46(Car)s. The document - 'Including Benefits in Kind and Expense Payments in the Payroll - A Fresh Approach' was published on 14 December. The earliest possible start date is 2011.

The document can be downloaded from www.hmrc.gov.uk/consultations/index.htm (and by then following the appropriate links to a page that is interestingly - given the subject matter - headed 'VAT, Customs and Excise') or hard copy can be requested from:

Paul Harris
HM Revenue and Customs
Room 1E/07
100 Parliament Street
London
SW1A 2BQ

Fax: 0207 147 2531
Email: pa.harris@hmrc.gsi.gov.uk

Responses should be sent to the above - preferably by email - but in any event by 17 March 2008.

Recovery of statutory payments

There are no changes to the Statutory Sick Pay Percentage Threshold Scheme for 2008/09 nor to the recovery arrangements for Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay.

Pensions Bill

Another Bill was introduced in the Commons on 5 December 2007. It provides for automatic enrolment into qualifying workplace pension schemes from 2012, sets out more of the framework for personal accounts, and provides that earnings related state pension - which currently comprises graduated pension, SERPS and S2P - will be consolidated into a single item. It also provides executive powers for the Personal Accounts Delivery Authority and gives the Pensions Regulator a role as the compliance body for these reforms.

Second Reading is presently scheduled for 7 January.

Tip of the Month - January 2008

We all know - don't we? - that when the earnings of a student who has previously signed a P38(S) start to go over the Earnings Threshold (ET), HMRC must be sent a form P46.

HMRC suggests that affected employers ask the student employee to complete the P46 and show the original start date of the employment, not the date the ET was exceeded. Where the employee completes Statement A or B, tax code OT week 1 should be used. As this differs from the code that the P46 requires, employers need to make an entry in the 'Tax Code Used' field on the P46. Where Statement C is completed, code BR week 1/month 1 must be used.

At the end of the tax year, the P14 needs to show the total earnings in this employment during the year, including earnings for the period when the P38(S) procedures applied and only National Insurance columns 1a and 1b were being completed (and even then only if the Lower Earnings Limit (LEL) was equalled or exceeded).

The above procedure will apply this coming Easter (in March, for those who haven't yet checked their new diaries). However, from 6 April 2008 the requirement for sending in a P46 will change to where the LEL rather than the higher ET is reached or exceeded. All the other comments made above will continue to apply but, where applicable, in relation to the LEL instead of the ET.

 
The above is taken from 'NIC Newsletter' (02/01/2008), as is reproduced with the kind permission of Peter Arrowsmith FCA, who retains the copyright.