Employer Bulletin: August 2021 – GOV.UK

Introduction

In this month’s edition of the Employer Bulletin there are important updates and information on the following:

UK Transition

Travellers carrying cash

Changes to right to work checks from 1 July 2021

EU Settlement Scheme: late applications

Coronavirus (COVID-19) updates and information

Coronavirus Job Retention Scheme

Coronavirus (COVID-19) and social security coordination with the EU

PAYE

Student loan types

Correct payment of National Minimum Wage to apprentices

Electronic payment deadline falls on a weekend

Informal payrolling of benefits in kind

Reporting expense and benefits digitally

Making your PAYE Settlement Agreement payment

Tax updates and changes to guidance

Tax avoidance – don’t get caught out

Off-payroll working rules (IR35) support

Off-payroll (IR35) contracted out services – make sure you are applying the rules correctly

VAT reverse charge for construction and building services

P11D(b) Penalty Warning letter

General information and customer support

Apply to the Kickstart Scheme to help your business grow

New tool makes planning shared parental leave easier

HMRC’s support for customers who need extra help

HTML Employer Bulletin’s format

UK transition

Travellers carrying cash

Since 1 January 2021, declarations are required if a traveller is carrying £10,000 or more in cash between Great Britain (England, Scotland and Wales) and any other country. A reference number will be issued to the declarant which must be held by the person carrying the cash.

If a traveller is carrying £10,000 or more in cash between Northern Ireland and any non-EU country, or from Great Britain to Northern Ireland, a declaration is also required. A declaration is not required if a traveller is carrying cash from Northern Ireland to Great Britain.

More information on travellers carrying cash is available and you can also make declarations from this page.

A new regulation governing cash controls in Northern Ireland came into force 3 June 2021. The regulation extends the scope to include unaccompanied cash sent by post or freight, and expands the definition of cash controls to include some high value commodities such as gold bullion. Under this new regulation, where Border Force find cash in post or freight, they may contact the sender, the recipient or the agent to enquire further.

Changes to right to work checks from 1 July 2021

Following the 30 June 2021 deadline for applications to the EU Settlement Scheme, the process for completing right to work checks on EU, EEA, and Swiss citizens has now changed.

Employers can no longer accept EU passports or ID cards as valid proof of right to work, with the exception of Irish citizens. Instead, you need to check a job applicant’s right to work online.

To carry out an online right to work check, you will need the applicant’s date of birth and their share code, which they will have obtained when they proved their right to work online.

You do not need to retrospectively check the status of any EU, EEA, or Swiss citizens you employed before 1 July 2021.

There may be situations in which you identify an EU citizen in your workforce who has not applied to the EU Settlement Scheme by the deadline and does not hold any other form of leave to remain in the UK. Where an EU citizen has reasonable grounds for missing the application deadline, they will be given a further opportunity to apply. Full guidance has been published on the steps you should take as an employer (Annex B) if this situation arises.

You should carry out a right to work check for every individual you employ. Employers can face a civil penalty of up to £20,000 for each illegally employed worker who does not have the right to work in the UK and where correct checks were not undertaken.

EU Settlement Scheme: late applications

If any of your employees have not yet applied, you may wish to encourage them to apply for a valid immigration status as soon as possible. Late applications to the EU Settlement Scheme may be accepted where there are reasonable grounds. Eligible employees should apply online.

Employer enquiry helpline

If you need help carrying out a right to work check you should call the Employer enquiry helpline:

An employer’s guide to right to work checks is available.

Further support available for EU, EEA and Swiss citizens

If any of your existing or prospective employees need support on their immigration status, this guidance provides information about how to prove immigration status and update personal details.

Coronavirus (COVID-19) updates and information

Coronavirus Job Retention Scheme

The deadline for Coronavirus Job Retention Scheme (CJRS) claims for July is Monday 16 August 2021.

The UK Government will pay 70% of employees’ usual wages for hours not worked in July, up to a cap of £2,187.50. In August and September, this reduces to 60% of employees’ usual wages up to a cap of £1,875.

You will need to pay the difference, so that you continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 a month.

There is detailed guidance to help you claim through the Coronavirus Job Retention Scheme and key deadlines you need to be aware of.

Use our CJRS templates to claim for 16 or more employees

To make it easier for you to add your employee details to your Coronavirus Job Retention Scheme claims, templates are available if you are claiming for between 16 to 99 employees, or for 100 or more employees.

The template file types that can be submitted have changed, and any templates must now be submitted as .xlsx or .csv files. If you submit your template using any other file type, you’ll receive an error message to say your file has not been accepted.

You can find everything you need to help you make a claim including our updated templates, on GOV.UK

Further support

You can sign up to receive regular email updates from HMRC, to keep up to date with the latest information on our COVID-19 schemes. Simply register and add the subscription topics you’re interested in.

Thousands of people have also joined and benefited from our live webinars, which offer information on the Coronavirus Job Retention Scheme and other government support, and how they apply to you.

Coronavirus (COVID-19) and social security coordination with the EU

We know COVID-19 related travel restrictions continue to have an impact on the movement of workers between the UK and the EU.

If you have employees who normally work in the UK, the EU, or both, and their work location has changed temporarily because of COVID-19 related travel restrictions, HMRC can consider their individual circumstances, including where they normally work, to decide whether National Insurance contributions are due in the UK.

If you or your employees need proof that you have to pay UK National Insurance contributions, you should apply for a certificate using one of the appropriate forms providing details of the COVID-19 related restrictions that apply.

The arrangements with the EU, which allow HMRC to disregard changes to individuals’ work locations caused solely by COVID-19 related restrictions, will end no later than the end of December 2021. We will continue reviewing this approach in light of COVID-19 developments and provide an update earlier if necessary.

PAYE

Student loan types

Following changes introduced in April 2021, there are now 4 types of student loans collected through Pay As You Earn and the Self Assessment system:

Each loan and plan type have different thresholds and, in some instances, rates for calculating student loan deductions.

If you apply the wrong student and or postgraduate loan type this will impact the employee’s take home pay and could result in the employee paying more interest to the Student Loans Company.

It is important that you:

• check your online account for either student loan or postgraduate loan, or both, start and stop notices
• let us know immediately if your email or correspondence address has changed
• take the correct action to start student and or postgraduate loan deductions as soon as possible
• record the deductions correctly on your Full Payment Submission

This will make sure that your employee does not pay any more or less than necessary.

More information can be found on special rules for student loans.

Correct payment of National Minimum Wage to apprentices

All apprentices are entitled to be paid at least the National Minimum Wage. However, a Low Pay Commission report states that around 1 in 5 apprentices earn less than their legal entitlement.

Mistakes can be easy to make, and employers might not always realise when something has gone wrong. Even for those apprentices paid at minimum wage rates, or even slightly above, the potential for underpayment can still be an issue.

The most common errors on apprentice pay we see in our enforcement work are:

• failure to pay the higher age-related minimum wage rate to those apprentices who are aged 19 and over and have completed the first year of their apprenticeship
• paying the £4.30 per hour minimum wage apprentice rate before or after an apprenticeship actually starts or finishes
• not paying for all the time worked by an apprentice, training time is working time

See the apprentice section of Check your pay for further information on when which minimum wage rates apply to apprentices.

For free and confidential advice about paying the National Minimum Wage, call:

Electronic payment deadline falls on a weekend

The electronic payment deadline of 22 August 2021 falls on a Sunday. To make sure your payment for that month reaches us on time, you need to have cleared funds in HMRC’s account by 20 August 2021 unless you are able to arrange a Faster Payment.

Remember that it’s your responsibility to make sure your payments are made on time and if your payment is late, you may be charged a penalty.

To know what date to initiate your payment and make sure we have it on time, you need to speak to your bank or building society well in advance of making your payment to check single transaction, daily value limits and cut off times.

Find more information and guidance on how to pay employers’ PAYE.

Informal payrolling of benefits in kind

HMRC will only accept new informal payrolling arrangements for benefits in kind during the 2021 to 2022 tax year.

Businesses who previously had an informal payrolling arrangement are expected to register for formal payrolling before April 2022 for the 2022 to 2023 tax year.

This is because informal arrangements can only be in place for a maximum of one tax year.

Reporting expenses and benefits digitally

Still dealing with amendments following the recent P11D deadline? You would not be if you were payrolling benefits in kind. Register by April 2022 and have everything in place for 2023.

If you think payrolling is a step too far, consider filing your P11Ds and P11D(b) online. It’s more efficient, cuts down on paper, and you will not even have to worry about posting them to us. Bring your payrolling processes into the digital age with P11D online filing of benefits in kind.

Making your PAYE Settlement Agreement payment

A PAYE Settlement Agreement (PSA) allows you to make one annual payment to cover all the tax and National Insurance due on small or irregular taxable expenses or benefits for your employees.

Any electronic payments for a PAYE Settlement Agreement for the tax year ended 5 April 2021 must clear into the HMRC bank account by 22 October 2021. If you pay late you may have to pay interest or a late payment penalty, or both.

To pay your PAYE Settlement Agreement you will need to use the PSA reference number from the payslip we sent to you, for example, XA123456789012. If you do not have your PSA reference number, please contact the office dealing with your application for advice.

Tax updates and changes to guidance

Tax avoidance – don’t get caught out

HMRC’s ‘Tax avoidance — don’t get caught out’ campaign continues to help contractors make informed choices about their tax affairs when people or businesses offer them tax avoidance schemes through word-of-mouth recommendations and online advertising.

We want to encourage contractors not to be tempted by tax avoidance schemes that bend the rules of the tax system by promising higher take-home pay, lower tax bills and less paperwork. Such schemes can end up costing more in terms of time, money, and stress.

To help contractors spot tax avoidance schemes, we need your help to highlight the dangers and financial risks that tax avoidance schemes cause your contractors. You can do this by continuing to share the Tax avoidance — don’t get caught out’ page along with a quick guide to spotting signs of tax avoidance and personal stories with your contractors to help educate them about tax avoidance schemes.

Your contractors can also report a tax avoidance scheme to HMRC if they are worried about becoming involved in tax avoidance or want help to get out of a scheme.

A ‘contractor’ is someone who provides services to clients that do not directly engage them. This may be through an ‘umbrella company’, an agency, a partnership, or their own company, such as a personal service company. This applies to employed and self-employed individuals. Contractors or agency workers can find out about how and what they’ll be paid if they work through an umbrella company.

HMRC wants to help your contractors steer clear of tax avoidance schemes, but it is not something we can do on our own. We need your help and support to succeed and let your contractors know that if something looks too good to be true, then it almost certainly is.

Off-payroll working rules (IR35) support

Since the off-payroll working rules changed on 6 April 2021 we have been continuing to provide new resources to help you to understand and comply with the rules.

Building on our previous Employer Bulletin, we wanted to highlight some further resources which you may find useful:

• we have published a new YouTube video outlining the changes for client organisations

video outlining the changes for client organisations

• we have delivered a new webinar on our free, digital, Check Employment Status for Tax (CEST) tool — live webinars have now finished but you can see a recording of the webinar

• we have also added links directly from certain questions in the CEST tool to our new webchat so you can talk to an advisor if you are having difficulty answering a question

• we have been continuing to use social media to signpost customers to our support, including a post summarising our support available on international supply chains, which includes links to flow charts for organisations and contractors who need to understand the offshore aspects of the rules

We are still here if you need help in operating the rules correctly and you can access any of our guidance pages, the additional resources and material highlighted in this and previous bulletins, or you can talk to us directly.

Off-payroll (IR35) contracted out services – make sure you are applying the rules correctly

The off-payroll working rules (commonly known as IR35) changed on 6 April 2021. You can find more information about these changes, including who the rules apply to, on our help and support page.

We understand that in some instances, arrangements are being put in place that mean some client organisations would no longer be responsible for considering the off-payroll working rules. These may be labelled as ‘contracted out services’ or ‘statement of works’. It is important that you fully consider any arrangements you enter into in response to the off-payroll working rules changing. Be especially cautious of any that claim you do not need to consider the off-payroll working rules.

Are you the client organisation responsible for considering the off-payroll rules?

You must consider the off-payroll working rules for all workers (contractors) you engage who work through their own limited company (often known as a personal service company) or other intermediary, if you are a:

• medium or large sized client organisation outside of the public sector
• client organisation of any size inside the public sector

The client is the person who the worker (or contractor) performs services for. In most supply chains it will be obvious who the client is.

In some cases, organisations may decide to contract out activities to another organisation, often called a ‘service provider’.

Where you enter into a contract for a genuine service or ‘fully’ contracted out service, you will not be the client for the purposes of the off-payroll working rules. Instead, the client will be the service provider because they are the person the worker is providing their services to — it will likely be the party most akin to the worker’s employer.

Whether a contract is for a fully contracted out service is a question of fact, based upon the commercial reality of the arrangements. Where there is uncertainty as to who the true client is, consideration should be given to the nature of the relevant contracts and working practices.

As a first step we recommend looking critically at the services you require, and if it is a supply of labour then it is highly unlikely that the contract represents a fully contracted out service. You would then remain the client for the purposes of the off-payroll working rules.

More information can be found in Employment Status Manual ESM10010.
If the true nature of the service being provided is a supply of labour, then any written terms will not change this fact. Talk to your service providers about the scope of the service they provide.

If you are the service provider

If you are a service provider you should discuss with your customers the scope of the service you provide.

If you are providing a fully contracted out service, then you will be the client for the purposes of the off-payroll working rules unless you are a small organisation outside of the public sector. You must consider the employment status for tax of any workers you supply who work through their own limited company or other intermediary. Your customers may wish to seek assurances from you about how you are applying the rules.

If you are not providing a fully contracted out service, then your customer will be the client for the purposes of the off-payroll working rules. You should inform your customer which of your workers will be providing their services through their own limited company or other intermediary. You should expect to receive a status determination statement for those workers who operate this way if the client finds they are ‘inside the rules’ and, if you pay these workers’ limited company or other intermediary yourself, you will be responsible for operating PAYE. This means you are responsible for deducting Income Tax and employee National Insurance contributions, and paying employer National Insurance contributions and Apprenticeship Levy, if applicable, for any workers that your customer decides are employed for tax purposes for this work.

VAT reverse charge for construction and building services

VAT registered construction businesses should note that this reverse charge came in on 1 March 2021. A Revenue and Customs Brief issued in June 2020 contains more information.

In January 2021, a letter was sent to every VAT registered construction business. This followed letters previously sent out in February and September 2020, advising them to check if they’re liable for the reverse charge. If they’re liable, they need to apply these rules going forward.

Find more information on the scope and operation of the reverse charge.

The key aspects are:

• it applies to standard and reduced-rated supplies of building and construction services made to VAT registered businesses, who in turn also make onward supplies of those building and construction services
• the contractor is responsible for paying the output VAT due rather than the sub-contractor, and can continue to reclaim this amount as input tax
• the scope of supplies affected is closely aligned to the supplies required to be reported under the Construction Industry Scheme, but does not include supplies of staff or workers for use by the customer
• the legislation introduces the concept of ‘end users’ and ‘intermediary suppliers’

This covers businesses, or groups of associated businesses that do not make supplies of building and construction services to third parties and, as such, can be excluded from the scope of the reverse charge if they receive such supplies. Examples include:

• landlords
• tenants
• property developers
• public bodies who are deemed contractors for Construction Industry Scheme purposes

In order to be treated as end users and intermediary suppliers, the customer needs to notify the supplier in writing. This can be done by correspondence or as part of terms and conditions. There is more detail in the technical guidance.

We’ve been running webinars for businesses and they can register now. If there are no dates available, a webinar recording can be viewed.

Find more information on the Construction Industry Scheme.

P11D(b) Penalty Warning letter

P11D(b) Class 1A National Insurance contribution returns received for 2020 to 2021 filed on or before 6 July 2021 have now all been captured. Any employers who have not filed a return when we expected one will receive a penalty warning. If the employer has an agent, a copy will also be sent to the agent.

The letter is not a penalty notice; it warns the customer that they may already have incurred a penalty, and that they need to file their outstanding return as soon as possible to avoid further penalties. The letter provides information to the employer about the action they need to take now.

Your P11D(b) return can be filed using any of the following methods:

It’s faster and more secure than sending paper returns.

If you registered to payroll your benefits for the 2020 to 2021 year, you still need to submit a P11D(b) to tell us about the Class 1A National Insurance contributions due.

To submit a nil P11D(b) if you do not owe Class 1A National Insurance contributions you can tell us by completing a declaration.

When the customer sends the outstanding return information the penalty position will automatically be reviewed and any relevant penalty is calculated.

General information and customer support

Apply to the Kickstart Scheme to help your business grow

Employers of all sizes can apply for Kickstart Scheme funding to create new jobs for 16 to 24 year olds on Universal Credit.

Funding will cover:

• 100% of the National Minimum Wage or the National Living Wage for 25 hours per week for a total of 6 months
• associated employer National Insurance contributions
• minimum automatic enrolment pension contributions
• £1,500 grant per job to cover set-up costs and employability support

Why you should apply for Kickstart:

• you will be able to give a young person who has been unemployed for a while a potentially life-changing opportunity
• your business will be set to benefit, flourish and grow by taking on these young people full of energy, new ideas and digital know how
• there is very little to lose — if the job does not work for either of you, there is no commitment beyond the six months
• you will feel you are playing your part in helping with the wider post-pandemic economic recovery

Join thousands of employers from across the public, private and not-for-profit sectors who are already signed up, creating new jobs and benefiting from the Kickstart Scheme.

The application process is straightforward, and support is on hand to apply. Read the new Kickstart Scheme employer prospectus to find out more about the scheme and what employers are saying.

The Department for Work and Pensions is running regular Kickstart webinars for employers which you can sign-up for free on Eventbrite.

If you have any questions ahead of submitting your application, you can contact [email protected]. Alternatively, regional contacts are available. Your regional Kickstart representative will be on hand throughout the process.

Apply online by October 2021 for the best opportunity of taking advantage of the Kickstart Scheme!

New tool makes planning shared parental leave easier

The Department for Business, Energy and Industrial Strategy (BEIS) has launched a new online tool to help working families make the most of the Shared Parental Leave and Pay Scheme.

Parents can use the tool to check whether they are eligible for the scheme, see how many weeks of Shared Parental Leave and Statutory Shared Parental Pay are available to them, agree how they will share the entitlement between them, and plan how and when they will take their leave and pay.

The new tool transforms a lot of the detailed rules of the scheme into a simple process; the eligibility checker and planning tool each take less than 5 minutes to complete. Parents and employers can dip in and out of the plan as they firm up their dates for taking shared parental leave.

Although the tool is for parents, employers can also use the tool to perform a simple check for eligibility. The tool makes it easier for parents to access the scheme and easier for employers to understand and administer shared parental leave.

HMRC’s support for customers who need extra help

HMRC’s principles of support for customers who need extra help set out our commitment to support customers according to their needs, and underpin the HMRC Charter.

Find out how to get help and the extra support available.

HTML Employer Bulletin’s format

Since September 2020, documents now published on GOV.UK or other public sector websites must meet accessibility standards. This is so they can be used by as many people as possible, this includes those with:

• impaired vision
• motor difficulties
• cognitive impairments or learning disabilities
• deafness or impaired hearing

The contents page with the links to articles is now down the left hand side, and the page is fully scrollable. Articles have been put into categories under a heading which is within the introduction to make it easier to find the updates and information you are interested in.

The HTML format does allow you (dependent upon your web browser):

• to print off the document should you wish to keep a paper file – select the “Print Page” button on the left hand side and print to your local printer
• alternatively, you can click on the “Print Page” print button and using the drop down list on the printer select “print to pdf”, which would allow you to save as PDF and file electronically
• on a mobile device you can select the more options. Then select options again which gives you the opportunity to save as PDF

Getting more information and sending feedback

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Send your feedback about this Employer Bulletin or articles you may wish to see by email to [email protected].