IReeN Bulletin 12-12-16

IReeN News Bulletin 12-12-16

Following on from our Autumn Statement Special, we have now seen more of the detail published in the last few days.

We are currently planning the next round of National Meetings for the New Year.

Please could you spare a couple of minutes to complete a short survey, so that we can plan an event to match members needs.

The Chancellor announced at Autumn Statement that new rules are coming in on 6 April 2017 for Benefits in Kind (BiKs) where they are provided by salary sacrifice. Further details of the changes were announced yesterday (5 December)

The Customer and Stakeholder Engagement Team have issued the following advice:

Salary Sacrifice is changing from April 2017
What does this mean for me?

New rules are coming in on 6 April 2017 for Benefits in Kind (BiKs) where they are provided by salary sacrifice. If you provide benefits to your employees in exchange for salary sacrifice / salary exchange or have a flexible benefits package where your employee can choose a benefit or cash, or where you provide benefits but offer your employee a cash alternative then you will be affected / need to know about these changes.
Benefits impacted are those which are currently taxable, like cars and white goods, and those currently tax exempt, like mobile phones and workplace parking.
The taxable value of the benefit will be the higher of the current value or the cash forgone. This will be the value you use for calculating Income Tax and Class 1A National Insurance Contributions (NICs).
What do I need to do?
If you are using salary sacrifice with your employees you need to familiarise yourself with the new rules.
You don’t need to do anything if your employees are sacrificing salary only for pensions, pensions advice, childcare vouchers, workplace nurseries, directly employer contracted childcare, cycle to work or cars with emissions of or under 75 g CO2 / km.
If your employees are sacrificing salary for anything else then you need to use the new rules. You will report different taxable values in many cases, on the new P11D (see ‘What changes will I need to make in my payroll / HR software’).
When do I have to do this?
The new rules do not start until 6 April 2017. Salary sacrifice contracts entered into on or before 5 April 2017 will be protected up until the contract hits a trigger point.
What is a trigger point?
From 6 April 2017, the normal trigger point is when the salary sacrifice contract renews, autorenews, starts, ends or is modified or changed. At this point you must use the new rules. This should align with your normal business as usual contractual arrangements.
However, if the existing contract is still in place on 6 April 2018, then there will automatically be a trigger point on 6 April 2018 (this will be 6 April 2021 for cars with emissions over 75g CO2/km, accommodation benefit and school fees).
If an employee starts a contract on or after 6 April 2017, then you will need to immediately use the new rules for that employee. This will apply to new recruits
What changes will I need to make in my payroll / HR software?
We will be updating specifications and test services for the 2017-18 P11D and P46 (Car) reporting from April 2018, which will be provided as part of our usual year-on-year changes.
To make the first year easier, we will not be updating the P46 Car for in year reporting and you should continue to use the existing form. Employees who will need to pay more tax can either call HMRC, or wait and the normal P11D process will pick up any corrections after the end of the year.
In April 2018 HMRC will introduce a new version of the P46 (Car) along with a new P11D which will ask for details of any salary sacrificed to allow reporting of the extra information.
I am voluntarily payrolling, what do I need to do?
For the majority of benefits, most employers will be able to change one taxable value for another. We recognise that for cars this may be more difficult due to software constraints. We will release further technical guidance in late January for payrolling, including what to do if you cannot update your systems in time.
You need to make sure the right figure is being payrolled after a trigger point is hit, this is especially important for cars. For 2017-18 HMRC is updating the software requirements for car data for those voluntarilypayrolling benefits. These new requirements collect information about the car’s details, such as CO2 emissions and the list price.
I am using an intermediary / payroll bureau / agent to do my payroll, what do I
need to do?

You need to make sure that they are aware that your employees are using salary sacrifice and that they use the correct taxable values as described above.

 

Countdown Bulletin 21 has been published on Gov.UK - Bulletin 21
 
This covers information about the Reconciliation of active members.

Following the announcement at Autumn Statement, the government has published further details on the reform of termination payments. This includes revised draft legislation on the tax treatment and draft legislation to align the tax and National Insurance contributions treatment. We have invited comments from all those with an interest by 1 February.

The Policy Paper can be found here

A big thank you to all those who took time out to complete their membership details form, if you haven't had a chance yet, then please go to the IReeN web page to find the form at the foot of the page.

Thank you

A message from the SDSTeam

Dear Developer 

In Pension Schemes Newsletter 81, available at https://www.gov.uk/government/collections/hm-revenue-and-customs-pension-schemes-newsletters, we explained that the tax treatment of serious ill-health lump sums changed on 16 September 2016 following Royal Assent.

HMRC are currently working on updating the RTI specifications for 2017/18 to include a new data item to identify serious ill-health lump sum payments to individuals over 75. 

We said in Newsletter 81 that updated specifications were due to be provided in December 2016. Unfortunately we won't be able to publish these, or release updated test services, until early in 2017. We are sorry for any inconvenience caused by this further delay.

We are aware that this delay may cause problems in designing, developing and testing your software to be able to report these payments on the FPS message. To help with this, whilst it is still mandatory that your customer report serious ill-health lumps sum payments, it will not be mandatory to identify these payments using the pensions data fields until 6 October 2017. 

In the meantime pension scheme administrators that need to report payments of serious ill-health lump sums to HMRC should continue to follow the guidance in the Pension Schemes Newsletter 81.

Off-payroll working in the public sector: reform of the intermediaries legislation - technical note

Gov.uk have published more details this week

Tax and tax credit rates and thresholds for 2017-18

Have now been published on Gov.uk

Statutory Payments 17-18
The weekly payment rates and thresholds are shown below. I am told the recovery rates have not been confirmed yet but a further mail will be sent when these are received.
 
Statutory Adoption Pay      
Earnings Threshold                   £113.00
Standard Rate                          £140.98

Statutory Maternity Pay
Earnings Threshold                   £113.00
Standard Rate                          £140.98

Statutory Paternity Pay
Earnings Threshold                   £113.00
Standard Rate                          £140.98

Statutory Shared Parental Pay
Earnings Threshold                   £113.00
Standard Rate                          £140.98

Statutory Sick Pay
Earnings Threshold                  £113.00
Standard Rate                           £89.35

The BBC recently reported that
MPs warn of tax phone line 'collapse'

 

Income tax powers officially devolved to Holyrood


Click here for the latest news from The Pension Regulator

The Electronic Exchange with Government user Network. www.IReeN .org.uk View our IReeN LinkedIn group?

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