Plenary SIX HMRC UPDATE. Phil Nilson FCIPP Technical team leader, HM Revenue and Customs MAIN CONFERENCE SPONSOR MAIN CONFERENCE SPONSOR

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1 Plenary SIX HMRC UPDATE Phil Nilson FCIPP Technical team leader, HM Revenue and Customs

2 International NICs A Japanese diver employed by a Malaysian company but seconded to a French one employed on the UK Continental Shelf aboard a Norwegian ship sailing under a Panamanian flag What NICs does he pay?

3 HMRC Update EU Exit National Insurance Contributions Bill Personal Tax Accounts PAYE Settlement Agreements Off-payroll working Anything else

4 EU Exit

5 EU Exit In the context of payroll, workers generally fall into one of three categories: Those from within the EEA Those from countries with which the UK has a Reciprocal Agreement or a Double Contributions Convention Those from elsewhere: the Rest of the World See guidance at Chapter 4 of leaflet CWG2

6 EU Exit: HMRC s current position Until the UK leaves the EU, EU nationals and UK nationals in the UK or other EU Member States continue to have the same rights and responsibilities as now this includes the posting rules What will happen after Exit is a matter for the UK Government and Parliament to consider in due course. We will also want to discuss these issues with our EU partners Until Exit: EU citizens working in the UK and the EU will continue only to have to pay into one social security system Contributions paid and credited will still count towards any UK contributory benefit or State Pension

7 National Insurance Contributions Bill 2017

8 National Insurance Contributions Bill 2017 To include: Abolition of Class 2 NICs and reforms of Class 4 NICs Termination Payments Sporting Testimonials Disguised remuneration

9 Termination Payments Features: Aligns tax and NICs treatment from April 2018 NICs will be payable on any part of a termination payment that exceeds the existing 30,000 threshold The NICs payable will be employer-only Class 1A likely to be reported via the RTI Full Payment Submission

10 Termination Payments (cont) FPS to show Non-tax or NIC payment = 30,000 Taxable Pay in period = 10,000 NICs Class 1A = 1,380 NICs Class 1A YTD = 1,380 Employers will be able to make corrections / amendments Most recent information: search GOV.UK for Income Tax and National Insurance contributions: treatment of termination payments

11 Sporting Testimonials Tax changes from April 2017: Affect sportspersons and independent testimonial committees applies to certain testimonials announced on or after 25 November 2015 where the testimonial is non-contractual or noncustomary but no change for contractual and customary testimonials

12 Sporting Testimonials Tax changes from April 2017: Subject to certain conditions, there is a one-off exempt amount of 100,000 Where satisfied, the independent testimonial committee should operate PAYE on any income above 100,000 Most recent information: search GOV.uk for Sporting testimonials: Income Tax and National Insurance payments

13 Sporting Testimonials NICs changes scheduled for April 2018: As with income tax, subject to certain conditions being satisfied, there will be a one-off exempt amount of 100,000 Employer-only Class 1A NICs will be due and reported via the Full Payment Submission

14 Personal Tax Accounts

15 Personal Tax Accounts: statistics (1) At time of writing: More than 10 million registered users Most popular services: Check your State Pension Check your PAYE Income Tax Almost 3 million taxpayers have gone paperless

16 Personal Tax Accounts: statistics (2) At time of writing: Over 1 million Tax Credits Renewals made online by 31 July deadline 43% Virtual Assistant used over 1.6 million times and over 1.3 million real-time webchats undertaken

17 Personal Tax Accounts: National Insurance number confirmation service: To save time and money, taxpayers can print a letter confirming their NINO But telephone requests are not declining which suggests employers are not accepting them Remember: NINO is proof of neither identity nor right to work in the UK Employers do not need to see a letter

18 Changes to the PAYE system PAYE collects income tax from about 41 million customers Around 8 million of these end the tax year having paid the wrong amount of tax 5.5 million overpay and half of these are among the lower paid employees It can take up to two years for the system to balance out underpayments

19 Changes to the PAYE system From 2 July 2017: We are making better use of the information employers send us in real-time We will be adjusting far more tax codes throughout the year, rather than after the end of the tax year meaning more people pay the right amount in year and reducing the million of P800 notifications issued We will continue to protect vulnerable customers and offer support to those who need it

20 Changes to the PAYE system Impact on employers: No changes to RTI submissions send accurate data at the right time More tax code adjustments but no change to the way they are sent Reduced queries from employees Search Issue briefing: changes to the PAYE tax system on GOV.uk to see the Employer Information and Support Pack

21 PAYE Settlement Agreements Now: Remind employees resident in Scotland to make sure their address details are up to date Remember to take into the account the different threshold when completing your PSA return Looking ahead: PSAs to be reformed with effect from April 2018

22 Off-payroll working in the public sector

23 Off-payroll working in the Public Sector Changes introduced from April 2017 placed responsibility for deciding whether intermediaries legislation applies on the public sector employer, agency or third party that pays the worker s intermediary As a result of feedback received since then we have refreshed our guidance to better support customers: go to The new Check Employment Status for Tax (CEST) digital tool is providing decisions in 85% of cases: go to We continue to work with stakeholders to improve products and processes

24 Anything else?

25 Any questions?

26 WELCOME THE UK S LARGEST PAYROLL CONFERENCE AND EXHIBITION