Pay PAYE Tax, Student Loan Deductions, Class 1 NI or CIS Deductions by 19th April to Avoid Automatic Interest
If you’re an employer who makes PAYE deductions from your employees’ salaries, or if you’re a contractor who pays subcontractors under the CIS, this deadline is important to you.
Please note that penalties may apply if there have been late payments throughout the tax year.
PAYE Quarterly Payments Are Due by Friday 19th April
This is a deadline that is particularly important to small employers and contractors with income tax, national insurance and student loan deductions that total less than £1,500 per month. If that’s you, you need to make your quarterly payment to HMRC.
If you’re making your payment by post, it should have reached the HMRC Accounts Office by this date. If your payment is made electronically, the deadline for receiving a cleared payment is Thursday 18th April. Or, if you have arranged a “Faster Payment”, the deadline is Monday 22nd April.
Late payments will incur interest and penalties may also apply.
19th April - PAYE, Student loan and CIS Deductions Are Due
Relevant to employers paying PAYE deductions from the salaries of their employees, and it’s also important to contractors paying subcontractors under CIS.
Employers, HMRC is expecting your payment for National Insurance, and student loan deductions. Contractors are expected to pay HMRC the tax deductions from subcontractors under the CIS.
If you’re making payment by post, it should reach the HMRC Accounts Office by 5th April. Electronic payments must be cleared by 18th April. “Faster Payment” submissions must clear no later than Monday 22nd April.
Late payments will incur interest and penalties may also apply.
19th April - Final 2018/2019 PAYE Return for Employers to be Submitted Online
Friday 19th April is the deadline for HMRC to receive the submission of your final Full Payment Summary (FPS).
After 19th April HMRC will not accept any 2018/2019 FPS submissions. Corrections to a 2018/2019 FPS will need to be made via an Earlier Year Update (EYU).
Disguised Remuneration Avoidance - HMRC Wins Case.
HMRC stands to collect more than £40 million in unpaid taxes due to a legal case win involving a contractor loan scheme.
Hyrax Resourcing Ltd was involved in the scheme, a disguised remuneration avoidance scheme that paid loans instead of salaries, thus avoiding income tax and national insurance contributions on earnings.
Details of the tax avoidance scheme will need to be divulged. These details will include names and addresses of the 1,180 users of the scheme. If Hyrax Resourcing Ltd fails to provide the information, it could be penalised.
Financial Secretary to the Treasury, Mel Stride MP, said: “HMRC is cracking down on the unscrupulous promoters who sell these highly contrived tax avoidance loan schemes.
“Promoters need to take note of this decision and make sure they contact HMRC urgently about schemes they haven't yet disclosed.”
Income Tax Changes for 2019/2020.
The new tax year is in full swing and has brought major changes to income tax bands and allowances.
For 2018/2020 the personal allowance will increase to £12,500.
There will be a personal allowance reduction of £1 for every £2 for each individual with an income above £100,000. For 2018/2019, individuals with adjusted net incomes of over £123,700 will have no personal allowance. For 2019/2020 this amount becomes £125,000.
Marriage allowance allows certain couples, where each person pays tax at no more than the basic rate, to transfer 10% of their personal allowance to a spouse, or civil partner.
20% is the basic rate of tax and the band of income taxable at the basic rate is £34,500 in 2018/2019. This makes the threshold at which the 40% band comes into effect £46,350.
For 2019/2020 the basic rate band is due to increase to £37,500 making the threshold for the 40% band £50,000.
Individuals with income over £150,000 pay tax at 45%.
Scottish residents will pay taxes differently to others in the UK. For Scottish residents income tax rates and bands apply to employment income, self-employed trade profits and property income.
There are 5 income tax rates which range between 19% and 46% for the tax years of 2018/2019 and 2019/2020. Despite this, Scottish taxpayers enjoy the same personal allowance as their English and Welsh counterparts. In Scotland the higher rates are 41% and 46%. For 2019/2020 the 41% threshold is £43,430.
April 2019 saw Wales assume the right to change the rates of income tax payable by Welsh taxpayers. The 3 rates of income tax paid by Welsh taxpayers has been reduced by 10 pence by the UK government. Meanwhile the Welsh government has set income tax at 10 pence, which will be added to the reduced rates. In short, this means that the tax rates will remain the same as that payable by English and Northern Irish taxpayers.
Social Media Businesses May be Taxed
The government has been called upon to impose taxes upon the profits of social media businesses.
A report has recently been published by the All Party Parliamentary Group (APPG) on Social Media and Young People’s Mental Health and Wellbeing. The report detailed the impact upon the health of young people that social media is having. To fund research and help to “draw up clearer guidance” on the impact that social media is having on young people, a 0.5% tax on the profits of social media companies has been proposed by the APPG.
Structures and Buildings Allowance Update
Chancellor Philip Hammond’s Spring Statement included comments on the Structures and Buildings Allowance (SBA) which gives relief on expenditures for improving structures and buildings meant for commercial use, but it also extends to converting or renovating existing premises. Only the original cost of construction, or renovation, will be valid for relief, and it will be across a fixed 50-year period at a flat annual rate of 2%.
The relief will only be valid for work for making properties suitable for qualifying activities, such as trades, professions, and vocations. Relief will be available for costs incurred on or after 29 October 2018.
Probate Fees Rise to be Delayed
Probate fees were to be increased, however that increase has been delayed by the government. The increase had been due to come into effect from 1 April 2019, but it has been shelved due to “pressure on Parliamentary time” in light of the various Brexit debates and votes.
HMRC has said: “Probate registries will accept applications before processing by us as long as they are assured the inheritance tax (IHT) forms from us will be coming shortly.
“Our processes aren't changing, it's just that probate registries will be willing to accept applications before our processing is done when normally it would need to be after.”
A temporary system is in place for probate applications. Meanwhile higher fees will not be imposed upon estates if applications are received before fee changes take effect.
Brexit Advice for Small Businesses
New documents have been published by the government in an effort to offer more advice on Brexit for small UK businesses. This information is intended to aid business owners so they can “understand how leaving the EU may affect their business”. The new advice covers topics from changes to UK-EU trade, to changes to how personal data is handled by businesses.
The government’s advice remains to prepare as soon as possible, and UK Economic Operator Registration and Identification (EORI) is recommended for all businesses that import or export goods to the EU.
There may also be new rules for businesses providing services to, or operating in, the EU, after Brexit. There may also be changes to the rules surrounding copyright, patents, designs and trademarks, so businesses that hold intellectual property such as this should consider themselves warned.
The Exit Tool is being recommended by the government to give business owners the latest information.
Forms P11D for the year ending 5 April 2019 need to be submitted to HMRC by 6 July 2019. These forms are intended to detail the benefits and expenses provided to employees and directors. Since it can take a while to gather all the relevant information, it’s recommended that the process is started as soon as possible.
Using a PAYE coding notice adjustment, or via the self assessment system, employees can pay tax on benefits, as displayed on the form P11D. Where benefits are “payrolled” they do not need to be declared on forms P11D, but employees should be made aware of the benefits by their employers.
Whether or not the benefits are payrolled, the employer needs to pay Class 1A National Insurance Contributions at a rate of 13.8% on most benefits. The deadline for this payment is 19th July, 2019.
There is a toolkit available from HMRC that employers can use to ensure that the forms are being completed correc