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Booklets & Manuals
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Electronic filing and payments
The Inland Revenue has published a comprehensive booklet explaining all of the issues that must be considered by employers in filing year-end returns online and making payments electronically. The booklet, MP2 Do it Online - Online filing and electronic payment handbook, is available to download from the Inland Revenue's website.
(Source: www.inlandrevenue.gov.uk/employers/doitonline.pdf )
...back to 19 March 2004
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Statements of Practice
The Inland Revenue has republished booklet IR131 Statements of Practice. Statements of Practice explain the Inland Revenue's interpretation of legislation and the way the Department applies the law in practice. Some of the Statements of Practice that are relevant to income tax are:
- A6 Employment Income: VAT
- SP16/80 Lorry drivers: Relief for expenditure on meals
- SP10/81 Payments on account of disability resulting in cessation of employment
- SP5/84 Employees resident but not ordinarily resident in the UK: General earnings
- SP6/85 Incentive awards
- SP4/86 Scholarship and apprenticeship schemes at universities and technical colleges
- SP1/94 Non-statutory lump sum redundancy payments
- SP2/96 Pooled cars: Incidental private use
- SP3/96 Termination payments made in settlement of employment claims
- SP5/96 PAYE Settlement Agreements
The following Statement of Practice is now obsolete, having been incorporated into the Income Tax (Earnings and Pensions) Act 2003:
- SP7/79 Benefits in kind: Cheap loans: Advances for expenses
Where relevant, the Statements of Practice have been updated to quote the new section references in the Income Tax (Earnings and Pensions) Act 2003.
(Source: www.inlandrevenue.gov.uk/pdfs/ir131.pdf )
...back to 5 March 2004
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Employer's Bulletin corrections
The back page of the latest (Issue 16) Employer's Bulletin gives two payroll helpline numbers, 0845 60 70 143 for new employers, and 0845 7 143 143 for experienced employers. These numbers are correct.
However, below these details is given a further telephone number, against the description "Payroll Helpline". This is an incorrect number for the Employer's Helpline. Only the two numbers above should be used.
This number shown is, in fact, the number for the Payroll Standard Helpline and is used by payroll software developers. It should not be used for general payroll queries.
Why the number was listed in the "Employer's" Bulletin is not at all clear!
(Source: www.inlandrevenue.gov.uk/employers/empbull16-amends.htm )
...back to 20 February 2004
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Tips, gratuities, service charges and troncs
The Inland Revenue has published a new booklet, E24 Tips, Gratuities, Service Charges and Troncs that explains, with numerous worked examples, the rules relating to PAYE tax, Class 1 NICs, the national minimum wage and VAT in connection with such payments.
In contrast to the 'E' supplementary booklets on SSP, SMP, SPP and SAP, which have had all of the worked examples removed, this new booklet is well written, clear and practical - and full of worked examples.
(Source: www.inlandrevenue.gov.uk/helpsheets/e24.pdf )
...back to 6 February 2004
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Extra-Statutory Concessions
The Inland Revenue makes a wide range of concessions that limit the strict application of tax law where specific conditions are met. The text of these concessions is published in booklet IR1 and the latest version of this list, current at 31 August 2003, has just been reissued.
Most of the concessions relevant to income tax and NICs were incorporated into the Income Tax (Earnings and Pensions) Act 2003 - in other words, they ceased to be concessions and became statutory provisions. Although these former concessions are listed, the text is no longer reproduced. There are still a few remaining relevant concessions, for example
- A4 Travelling expenses of directors and employees earning £;8,500 a year or more
- A56 Benefits in kind: the tax treatment of accommodation in Scotland provided for employees
- A60 Agricultural workers' board and lodgings
- A91(b) Living accommodation provided by reason of employment: open market rental value.
(Source: www.inlandrevenue.gov.uk/leaflets/ir1.pdf )
...back to 16 January 2004
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Updated Pensions guidance
The CA15 Cessation of Contracted-out Pension Schemes manual has been reissued. It gives detailed guidance on the procedures to be followed when a contracted-out salary related (COSR), money purchase (COMP) or mixed benefits (COMB) scheme ceases to contract-out.
The manual also advises on the conditions that must be satisfied before one of these schemes ceases to contract-out, and on the procedures that the employer and Services to Pensions Industry must follow after cessation.
The equivalent manual is
- CA85 for Contracted-out Money Purchase Stakeholder (COMPSHP) pension schemes and Appropriate Personal Pension Stakeholder (APPSHP) pension schemes, and
- CA16 for Appropriate Personal Pension (APP) schemes.
(Source: www.inlandrevenue.gov.uk/pdfs/nico/ca15.pdf )
...back to 5 December 2003
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Rights at work leaflets
Acas has announced the introduction of a new series of leaflets explaining the rights of employees at work. According to Acas, there are now over 100 rights for workers in the key areas of pay; time off; parents at work; discipline, grievances and dismissal; equality and discrimination; information and consultation; trade unions and representation.
Links to these leaflets and to other published guidance on employment rights are provided on the Acas website. Printed copies of the leaflets may be ordered on 08702 42 90 90.
(Source: www.acas.org.uk/employment/your_rights_at_work/emprights_intro.html )
...back to 28 November 2003
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CA30 manual to be replaced
The Inland Revenue has confirmed that the comprehensive CA30 Statutory Sick Pay Manual for Employers is to be replaced in April 2004 with a new, shorter, E14 Supplement. We have already been critical of the replacement of the CA29 Statutory Maternity Pay Manual last April, when the E15 Supplement was published with very superficial guidance.
First sight of the draft E14 supplement confirmed that the same format was being followed as the E15 supplement, with much of the technical guidance and all of the worked examples being removed. Following representations, some of the missing information is being reinstated. However, the examples are still omitted, the extraordinary reason being that "a general decision was taken to omit examples from all the Help books as it was felt that these could lead to confusion."
Nevertheless, a commitment has been made to review the content of the Help books in the new year in the light of the comments from users.
...back to 21 November 2003
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New and revised booklets
The Adjudicator's Office
The booklet A01 The Adjudicator's Office has been reissued and may be downloaded from the Inland Revenue's website. The Adjudicator's role is to investigate complaints about the way the Inland Revenue deals with people's tax affairs, for example, mistakes, delays, misleading advice, staff behaviour, the use of discretion. The Adjudicator's services are free.
(Source: www.inlandrevenue.gov.uk/pdfs/ao1.pdf)
Deficiency Notices
The booklet RD71 To Pay or Not to Pay has been published on the Inland Revenue's website, along with a series of Frequently Asked Questions about making voluntary National Insurance contributions. The booklet has been sent out recently with deficiency notices to people whose NIC record is deficient for the tax years 1996/97 to 2001/02.
(Source: www.inlandrevenue.gov.uk/pdfs/rd171.pdf
and
www.inlandrevenue.gov.uk/faqs/vol-conts.htm )
P11D returns by magnetic media
The Inland Revenue has published booklet EEC1, also known as booklet EB5, which contains the technical specifications for the submission of P11D returns by magnetic media for the 2003/04 tax year. The booklet is no longer available in paper format.
(Source: www.inlandrevenue.gov.uk/pdfs/emp2003/eec1.pdf)
National Minimum Wage guides
The Department of Trade and Industry has published three short guides to the National Minimum Wage, for employer, workers and young workers.
(Source: www.dti.gov.uk/er/nmw/nmwguide.htm )
...back to 7 November 2003
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New booklets and manuals
Personal pension schemes
The Inland Revenue has reissued the CA16 Appropriate Personal Pension Scheme Manual. The 75-page "leaflet", as the Revenue describes it, is a detailed procedural manual for providers and administrators of Appropriate Personal Pension (APP) schemes. An APP scheme is a pension scheme which an individual may join as a means of contracting out of the State Second Pension scheme.
(Source: www.inlandrevenue.gov.uk/pdfs/nico/ca16.pdf )
Film and Television Industry
A revised edition of the Film and Television Industry Guidance Notes has been published by the Revenue's Film Industry Unit and Television Industry Unit. The booklet provides direction on PAYE, NICs, employment status, service companies, construction industry certificates, workers from abroad, annual returns and expenses payments.
(Source: www.inlandrevenue.gov.uk/specialist/fi_guidance_notes2003.pdf )
Pensions Industry
The National Insurance Services to Pensions Industry (NISPI) has published its latest newsletter with information on a range of current pensions matters, including magnetic media, NI Table letters and forms. Note carefully that the information given on page 6 about NI Table letters is incorrect. It gives the table letters for 2002/03 and does not show the new letters J and L that apply for 2003/04.
(Source: www.inlandrevenue.gov.uk/specialist/fi_guidance_notes2003.pdf )
Pensioners
Leaflet IR121 Income tax and pensioners has been reissued, giving guidance for pensioners on income tax, capital gains tax and inheritance tax. Employers may find this a useful booklet to issue to employees approaching retirement age. Copies are available at local enquiry centres, but large quantities should be obtained from the Employer's Orderline, 0845 764 6646.
(Source: www.inlandrevenue.gov.uk/pdfs/ir121.pdf )
Inland Revenue Contact Centres
The Inland Revenue now has about 20 Contact Centres around the country that handle telephone enquiries from individuals instead of their local tax office. Not all tax offices are covered by this service and have to handle telephone enquiries locally. The way in which tax offices and Contact Centres are expected to handle enquiries from the public are set out in revised Codes of Practice. To coincide with the release of these new documents, the Inland Revenue has announced that local offices will now take enquiries from representatives of customers, such as an accountants, agents or family members, as long as the office has written consent from the customer.
(Source: www.inlandrevenue.gov.uk/pdfs/sp02-03.pdf
and
www.inlandrevenue.gov.uk/pdfs/sp03-03.pdf )
Teleworkers
A new guidance booklet on teleworking has been published by the Department of Trade and Industry (DTI). The guidance and recommendations have been agreed by the Confederation of British Industry (CBI), the Trades Union Congress (TUC) and the Employers' Organisation for Local Government.
Teleworking is the term used for the use of IT to enable employees to work away from the office. There were about 2.2 million teleworkers in the UK in 2001, 7.4% of all in employment. The many issues that are raised when employees work at home are clarified in the booklet, including employment conditions, data protection, privacy, equipment, health and safety, organisation of work, training, taxation and collective rights.
(Source: www.dti.gov.uk/er/individual/telework.pdf )
...back to 5 September 2003
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Tax credits and other kinds of help
The Inland Revenue has published a new booklet in its Tax Credit series, WTC6 Child Tax Credit and Working Tax Credit - Other types of help you may be able to get. The booklet provides guidance to those receiving tax credits on how to go about obtaining other rights and benefits to which they may also be entitled, such as help with health costs, children, legal assistance and home improvements. Employers may wish to consider giving a copy of this booklet to those employees to whom tax credits are paid through the payroll. Copies are available at local enquiry centres, but large quantities should be obtained from the Employer's Orderline, 0845 764 6646.
(Source: www.inlandrevenue.gov.uk/pdfs/wtc6.pdf )
...back to 29 August 2003
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Employment Income Manual
The Inland Revenue has published a new internal procedural manual to replace the Schedule E manual. The Employment Income Manual (EIM) provides guidance for tax inspectors but is also made available publicly for specialists and employers interested in the application of the new Income Tax (Earnings and Pensions) Act 2003.
The title of the new manual reflects the removal of the term "Schedule E" from the income tax legislation and the introduction of the new term "employment income".
(Source: www.inlandrevenue.gov.uk/manuals/eimanual/index.htm )
...back to 8 August 2003
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Electronic filing by EDI
The Revenue has reissued booklet EB4 (PAYE/EDI) Software Developers. It lists suppliers of payroll and EDI software that has been evaluated and approved by the Revenue as capable of transferring payroll data using Electronic Data Interchange, one of the two methods that must be used for mandatory electronic filing of year-end returns from 2004/05onwards.
(Source: www.inlandrevenue.gov.uk/ebu/eb4_paye_edi.pdf )
...back to 3 July 2003
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Booklets E15, E16 and the Supplements
Booklet E15 has been rewritten for 2003/04 to cover the basic aspects of maternity leave and SMP, and paternity leave and SPP in the event of a birth. The new E16 booklet covers the same basic aspects of adoption leave and SAP, and paternity leave and SPP in the event of an adoption. Both booklets are now supported by Supplements that purport to cover "special cases". The much more detailed CA29 SMP Manual has been discontinued.
The guidance now available to employers on SMP, SPP and SAP is wholly inadequate in comparison with that provided in the old CA29 SMP Manual. All three of the questions posed above were raised with the Inland Revenue because the new booklets fail to cover the wide range of issues that employers will encounter when administering these new statutory payments. We asked the Revenue to provide a statement as to why the new supplementary booklets contain so little detailed guidance in comparison with the current CA30 and the former CA29 manuals. The only comment was included in the reply to the fraudulent SPP question: "The new approach to employer guidance which the E15 and E16 and their supplements pilot is to provide what most employers should need most of the time."
We believe that every payroll manager in the country requires better quality information than the superficial guidance that has been provided on these subjects. We hope the Inland Revenue will do better next year.
...back to 6 June 2003
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Errors in Revenue booklets
The following errors are highlighted in the latest issue of Employer's Bulletin:
In Help Book E15, Pay and time off work for parents:
- page 17 - Step 3 should read "Find the date of the last normal pay day on or before that Saturday"
- page 31 - the first paragraph under the subheading 'mothers' under the heading 'Employee leaves job after the start of the 15th week before week baby due' should read: "It doesn't matter why she left or that she isn't coming back - she is entitled to SMP. See the E15 supplement if she starts work for another employer."
In booklet 480, Expenses and benefits: A tax guide:
- The inside front cover states that new or revised material is shown in bold type. However, the bold type relates to the 2002 amendments. A corrected version of the booklet will be provided on the Revenue's Budget edition of the Employer's CD-ROM 2003, and on the Revenue's website at www.inlandrevenue.gov.uk/pdfs/emp2003/480-03.pdf. The corrected version has green side bars showing the new or revised material.
(Source: www.inlandrevenue.gov.uk/employers/empbull14.pdf )
...back to 9 May 2003
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New booklets
Inland Revenue
Booklet CA08 Voluntary National Insurance Contributions has been reissued. Class 3 NICs may be paid by employees who wish to qualify for, or improve their entitlement to, the State Pension and bereavement benefits because they are not paying contributions, or paying insufficient contributions.
(Source: www.inlandrevenue.gov.uk/pdfs/nico/ca08.pdf )
Booklet CA10 National Insurance for Divorcees has been updated. This booklet includes guidance for women paying reduced-rate contributions and describes the procedure they must follow when they lose their entitlement from the date of their decree absolute.
(Source: www.inlandrevenue.gov.uk/pdfs/nico/ca10.pdf)
Booklet IR115 Income tax, National Insurance contributions and childcare has been amended to reflect the abolition of Children's Tax Credit and the introduction of Child Tax Credit.
(Source: www.inlandrevenue.gov.uk/pdfs/ir115.pdf)
Department of Trade and Industry
Booklet PL711 Continuous employment and a week's pay: Rules for calculation has been reissued. It gives guidance on the calculation of "a week's pay", used for determining the statutory payments for a number of employment rights, including redundancy and statutory holiday leave.
(Source: www.dti.gov.uk/er/pay/rules-pl711.htm)
ACAS
Following the introduction of the new right to paid time off for Union Learning Representatives on 27 April, the revised version of the ACAS Code of Practice 3 Time off for trade union duties and activities has now been published.
(Source: www.acas.org.uk/publications/pdf/CP03.pdf)
...back to 2 May 2003
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New and obsolete booklets
See also item Student Loan deductions .
The Revenue has published its new internal Tax Credits Technical Manual. This is a detailed guide to the law relating to Child Tax Credit and Working Tax Credit.
(Source: www.inlandrevenue.gov.uk/manuals/tctmanual/index.htm)
Revenue booklet CA13 National Insurance contributions for women with reduced elections has been reissued.
(Source: www.inlandrevenue.gov.uk/pdfs/nico/ca13.pdf)
Revenue booklet CA72 National Insurance contributions - Deferring Payments has been updated, in particular to reflect the new requirement form 6 April 2003 for employers who have received deferment certificates to deduct employee NICs using table letter J, L or S, as appropriate.
(Source: www.inlandrevenue.gov.uk/pdfs/nico/ca72.pdf)
Revenue booklet IR14/15 Construction Industry Scheme has been reissued. The new booklet incorporates the changes contained in the supplement booklet (IR14/15S) and, in addition, describes the new procedures for employers who suffer deduction of tax on account to offset the deductions against their payments to the Accounts Office. A new chapter is included that describes "the scope of construction operations".
(Source: www.inlandrevenue.gov.uk/pdfs/ir14-15cis.pdf)
Revenue booklet IR161 Tax relief for employee's business travel has been withdrawn as it is now obsolete. Guidance in this area is now available in the following booklets:
- IR124 Using your own vehicle for work
- IR136 Income tax and company vans
- IR172 Income tax and company cars
(Source: www.inlandrevenue.gov.uk/pdfs/ir124.pdf, (or ir136.pdf, or ir172.pdf)
...back to 18 April 2003
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Employer's Pack 2003
All employers should have received the Employer's Pack from the Revenue by the end of February. Employers with computerised payroll systems should immediately order the necessary year-end forms, those forms for routine payroll work that change annually, and copies of the following additional booklets, as relevant:
- 480 Expenses and Benefits
- CA30 Statutory Sick Pay manual
- CA33 Class 1A NICs on Cars and Fuel
- CA41 NICs Tables B and C
- CA44 NICs for Company Directors
- CWG2 Further Guide to PAYE and NICs
- CWG5 Class 1A NICs
- E6 Working Tax Credit guidance
- E15 SMP and SPP for births
- E15 Supplementary Manual
- E16 SAP and SPP for adoptions
- E16 Supplementary Manual
Most of these updated booklets are available on the Revenue's CD-ROM that was also issued during February along with the latest Employer's Bulletin.
Employers with contracted-out pension schemes should receive their copies of booklets CA39 (NICs Tables D, E and L) and CA43 (NICs Tables F, G and S) automatically.
Payroll Briefing 17 - 6 March 2003
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NI Number/Date of Birth Checking Service
This is a special checking service available only to occupational pension scheme authorities and to computer bureaux and agents, where the number of checks that have to be made exceeds the NI number checking process available to employers in general. The Revenue have reissued booklet CA21 to describe the method by which data for comparison may be submitted, not more than every three years, by paper listing or by magnetic media. The new booklet is available at www.inlandrevenue.gov.uk/pdfs/nico/ca21.pdf .
Payroll Briefing 16 - 13 February 2003
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Electronic Exchange
Most of the publications about Electronic Data Interchange (EDI) have now been updated. The latest is the EB2 EDI Information Pack that provides basic information and explanations about what EDI is and how it works. EDI is one of the two methods by which employers will be able to submit year-end returns when electronic submission becomes compulsory from 2005 onwards.
All of the EDI publications can be downloaded from www.inlandrevenue.gov.uk/ebu/edi/paye_intro.htm or ordered from 08456 055999.
The list of payroll system suppliers that have been accredited under the Revenue's Payroll Software Accreditation scheme has a new entry, Carval Computing Ltd. Details are available at www.inlandrevenue.gov.uk/ebu/acclist.htm .
Payroll Briefing 16 - 13 February 2003
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Tax Credits
Curiously, the Revenue has reissued the booklets and fact sheets about the Working Families' Tax Credit (WFTC) and Disabled Person's Tax Credit (DPTC) just two months before both arrangements come to their end. From 6 April 2003, they are replaced by Working Tax Credit (WTC) and Child Tax Credit (CTC).
Just why the Revenue would go to the trouble of reissuing the booklets is not clear but, as the Revenue is now paying the existing credits direct instead of through employers, the new booklets and fact sheets make no mention of payment by the employer and state that the final payments of WFTC and DPTC will be made on 7 April 2003.
It is also likely that the Revenue does not want individuals to hold back from applying for tax credits until the new scheme starts if they are entitled to the old tax credits now.
The revised booklets and fact sheets are available at www.inlandrevenue.gov.uk/leaflets/credit.htm .
Payroll Briefing 16 - 13 February 2003
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Compliance audits
The Revenue has reissued booklet IR109 Employer compliance reviews and negotiations. It explains the procedures that Revenue inspectors follow when, after completing a compliance review, it is found that the employer has sent incorrect tax returns, or underpaid tax, NICs and student loan deductions, or accounted for tax credits incorrectly. Penalties can be anything up to 100% of the underpayment but are reduced according to the size and gravity of the offence, and the extent to which the employer disclosed details of the failure and cooperated during the review. The new booklet is available at
www.inlandrevenue.gov.uk/pdfs/ir109.pdf .
Payroll Briefing 14 - 21 January 2003
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New forms and booklets
The Self Assessment Orderline may now be used to order most Revenue booklets and leaflets, other than those to do with NICs. The Orderline is open every day of the week from 8 a.m. to 10 p.m., on 08459 000404.
Deferment of NICs
The form used by employees to obtain a CA2700 deferment certificate has been updated. Form CA72A is used to notify the NICO's deferment section that the employee expects to earn at least at the upper earnings limit for the year in one employment and, to avoid having to reclaim overpaid contributions at the year-end, does not wish to pay primary contributions in another employment. The form can also be used if the employee has three jobs and expects to have combined earnings of at least the upper earnings limit in two of them. If the application is approved, the CA7200 certificate is sent direct to the employer in whose employment the primary contributions are not to be paid. If the certificate is received part way through a tax year, any primary contributions already deducted are refunded to the employee.
The new form may be viewed at www.inlandrevenue.gov.uk/pdfs/nico/ca72a.pdf , and the explanatory booklet CA72 Deferring Payment at www.inlandrevenue.gov.uk/pdfs/nico/ca72.pdf .
NICs and specific employments
The following booklets have been reissued, giving NICs guidance for the particular employees described.
- Booklet CA25 National Insurance Contributions for Agencies and People Working Through Agencies. Among the relatively minor textual clarifications, the list of agency workers who are not treated as employees has been extended to include those who work for their spouse, as an office cleaner in a private home, and as cleaners of telephone apparatus other than in a private home.
- CA26 National Insurance Contributions for Examiners, Moderators and Invigilators, Lecturers, Teachers and Instructors. The situation of moderators and invigilators is included for the first time. It is made clear that employment as an examiner, moderator or invigilator is treated as self-employment for NICs purposes even if they work under a contract of service and pay tax under PAYE. Conversely, lecturers, teachers and instructors who are not engaged under a contract of service and are not taxed under PAYE must, in most cases, pay Class 1 NICs.
All of the current NICs series booklets are available at www.inlandrevenue.gov.uk/leaflets/nic.htm .
Extra-Statutory Concessions
All of the current concessions as at 31 August 2002, including those relevant for P9D/P11D reporting, have been published in a new IR1 Extra-Statutory Concessions booklet. It may be ordered from tax offices or downloaded from www.inlandrevenue.gov.uk/pdfs/ir1.pdf .
New tax credits,
A revised version of booklet E6 Working Tax Credit paid with wages is now available to order from the Employer's Orderline, 08457 646646 but, at the time of writing, is was not available on the Revenue's website. There is a small section on the Revenue's website, at www.inlandrevenue.gov.uk/taxcredits/changes.htm , and a comprehensive pack can be obtained by professional advisers at www.inlandrevenue.gov.uk/taxcredits/welfare_advice_orgs.htm#pack .
A guide aimed at the general public has now been published, available at www.inlandrevenue.gov.uk/pdfs/wtc1.pdf .
Stakeholder pensions
All of the pension schemes booklets are in the process of being updated and the latest to appear is booklet CA84 Stakeholder Pension Scheme Manual. It is aimed at employers and considers all aspects of contracted-out stakeholder schemes, both money purchase and appropriate personal pension schemes. It can be downloaded, along with other pensions booklets, from www.inlandrevenue.gov.uk/leaflets/nic.htm .
New employment rights,
The first guidance booklets have been published by the DTI on the new maternity, paternity and adoption rights that come into force from April 2003, although some mothers and fathers will be able to take the new leave entitlements earlier than that. The booklets, PL505 on maternity leave, PL514 on paternity leave and pay, and PL515 on adoption leave and pay are available at www.dti.gov.uk/er/hot_topics.htm .
Payroll Briefing 12 - 12 December 2002
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New Publications
Pensions
The Revenue department that handles everything to do with contracted-out pension schemes is called Services to Pension Industry. It is a directorate of the National Insurance Contributions Office in Newcastle. It used to be known as the Contracted-out Employments Group (COEG). Their latest occasional Newsletter was published in September and contains details of four revised booklets that give guidance on contracted-out matters, i.e.
- CA14 Termination of Contracted-out Employment for COSR schemes
- CA14A Termination of Contracted-out Employment for COMP schemes
- CA16 Procedural Guidance for APP schemes
- CA16A APP Scheme Manual, Guidance for Scheme Managers
They have all been updated to include current information about, among other matters, the State Second Pension, Stakeholder Pensions, and changes in age-related rebates for COMP schemes. Telephone 08459 150150 or visit www.inlandrevenue.gov.uk/nic/coeg.htm and www.inlandrevenue.gov.uk/leaflets/nic.htm .
Another manual, CA22 Contracted-out Data Transactions using Magnetic Media, has been reissued to provide current guidance on the electronic submission of notices of termination of contracted-out employment. It may be downloaded from www.inlandrevenue.gov.uk/pdfs/nico/ca22.pdf .
Employment Law
The Department of Trade and Industry publishes an extensive range of booklets on employment law and related matters. The full list of titles may be viewed at www.dti.gov.uk/er/regs.htm . The following booklets have just been updated and reissued:
- booklet PL711 Continuous Employment and a Week's Pay: Rules for Calculation
- booklet PL707 Rights to Notice and Reasons for Dismissal
- booklet PL502 Disclosures in the Public Interest: Protection for Workers who "Blow the Whistle"
Payroll Briefing 10 - 7 November 2002
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Construction Industry
Booklet IR40(CIS) Conditions for getting a Subcontractor's Tax Certificate has been reissued by the Revenue in October 2002. It describes the business, compliance and turnover tests that must be satisfied by sole traders, partnerships and companies in order to obtain a CIS6 Certificate, thereby permitting payment of invoices by contractors without the deduction of tax on account. About half of the booklet is spent explaining the significance of the "minor and technical" rule that can cause applicants to fail the compliance test.
The text of the booklet may be viewed at www.inlandrevenue.gov.uk/pdfs/ir40cis.htm , or downloaded from www.inlandrevenue.gov.uk/pdfs/ir40cis.pdf .
Payroll Briefing 9 - 24 October 2002
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Updated Revenue leaflets and booklets
A number of the Revenue's leaflets and booklets have been re-issued and are available to order from the Employer's Orderline (08457 646646), local tax offices, or to download from the Revenue's website.
- IR List, a catalogue giving a short summary of all of the currently available leaflets and booklets - www.inlandrevenue.gov.uk/pdfs/irlist.pdf
- IR2, a guide to tax approved occupational pension schemes, written for scheme members - www.inlandrevenue.gov.uk/pensionschemes/ir2.pdf
- IR3, a guide to tax approved personal pension schemes, written for scheme members - www.inlandrevenue.gov.uk/pensionschemes/ir3.pdf
- IR98, guidance on approved SAYE share schemes, written for practitioners - www.inlandrevenue.gov.uk/pdfs/ir98.pdf
- CA14, guidance on COSR occupation pension schemes and on what to do when employees leave contracted-out employment, written for employers and administrators - www.inlandrevenue.gov.uk/pdfs/nico/ca14.pdf
- EB4(PAYE-EDI), a booklet that lists the suppliers of payroll systems that include electronic interfaces with the Revenue for sending and receiving documents by Electronic Data Interchange (EDI) - www.inlandrevenue.gov.uk/ebu/eb4_paye_edi.pdf
Payroll Briefing 6 - 12 September 2002
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Self Assessment records
Employers may wish to consider giving a copy of the Revenue's revised booklet SA/BK4 Self Assessment: A general guide to keeping records to employees for whom they complete forms P9D or P11D. It includes a detailed list of the documents that employees should retain in order to substantiate the entries they make on the employment form of their self-assessment return.
Payroll Briefing 2 - 20 June 2002
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Employer's Budget Pack
All employers should have received their packs by the end of May. Some employers have reported that their packs did not include the replacement E booklets and tax tables. It is understood that the Revenue did not print enough of these to supply all employers and the missing items will be supplied soon, hopefully before the 18 June when they take effect. The full Budget Pack should contain the following items:
- Form P7X, containing instructions for applying tax code changes before and after 18 June (see item below)
- Replacement booklets: E12 Rates and Limits, and E13 Day-to-Day Payroll
- Replacement Tax Tables SR + B to D, dated June 2002
- New Calculator Tax Tables, dated June 2002
- Issue 11 of Employer's Bulletin and Issue 2 of Employment Law Update
- Replacement CD-ROM for 2002/03, which includes all of the revised booklets.
Payroll Briefing 1 - 11 June 2002
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Booklet revisions
Two Revenue booklets have been revised from April 2002:
- Booklet IR69 Expenses Payments and Benefits in Kind - how to save yourself work is written to give employers information on how to apply for dispensations, and includes updated information on the new rules for tax and NICs liabilities on mileage allowance payments. The booklet still includes leaflet P11DX that employers may use to apply for a dispensation covering travel, subsistence, entertainment and other expenses.
- Booklet IR122 Volunteer Drivers has also been updated in light of the new mileage allowance rules, and explains the special rules that apply to payments made to volunteers under the terms of an organised volunteer car scheme. Although volunteer drivers are not, by definition, employees, employers such as charities that make such payments need to be aware of the difference between the way in which tax and NICs on any "profit" are handled for volunteer drivers and the new rules for employees.
Payroll Briefing 224 - 23 May 2002
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Revised Revenue booklets
An updated version of booklet IR125, Using you own car or motor bike for work, was published in February 2002. Employers may wish to give copies to those employees who use their own vehicles on company business. It still contains guidance for employees relevant to the 2001/02 tax year, but contains a short description of the new Approved Mileage Allowance Payment (AMAP) rates that will replace the existing authorised mileage rates in April 2002 for both tax and NICs purposes. Another booklet is due for publication in the new tax year that will be dedicated to the new rules. (See issues 210 and 215 of Payroll Briefing)
On a related subject, booklet IR161, Tax relief for employee's business travel, was also reissued in February 2002. This booklet also contains a small section on the new AMAP provisions. All employees who receive expenses payments should be given a copy of this booklet as it explains the procedures for claiming tax relief on expenses payments that are lower than the levels permitted under the Revenue's rules.
Payroll Briefing 219 - 6 March 2002
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New Revenue help books
Six new E-series booklets have been published by the Revenue to replace the traditional CWG1 Help Cards for 2002/03. They also include replacements for the CA35 SSP Tables and CA36 SMP Tables. The six booklets, which will be included in the employer's year-end pack, are:
- E10 Finishing the tax year up to 5 April 2002
- E11 Starting the tax year from 6 April 2002
- E12 PAYE and NICs rates and limits for 2002-2003
- E13 Day-to-day payroll
- E14 What to do if your employee is sick
- E15 What to do if your employee is pregnant
Payroll Briefing 218 - 14 February 2002
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Help Cards and other errors (2)
Ten new CWG1 Help Cards have been issued with the Employer's Budget Pack, replacing cards 2, 3, 6, 8, 10, 12, 15, 16, 17 and 18. They include the correction to the erroneous tax calendar on Card 2.
Circulated separately are updated pages to the CA36 SMP Tables, correcting the 'latest start dates' in column 3, and updated pages to the CA35 SSP Tables, adjusting the SSP daily rate figures and errors in the instructions for the Percentage Threshold Scheme. Copies of the changes should be sent automatically to all employers who have received the original CA35 and CA36 Tables. - Payroll Briefing 201 - 9 May 2001
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Help Cards and other errors (1)
There is an error on the reverse of Card 2 of the CWG1 Help Cards issued as part of the Employer's Annual Pack. The tax week calendar shows only six days in week 1 and two days in week 53. Every Thursday payday is shown in the wrong tax week. The Revenue has not publicised this very fundamental error but the version of the cards on the PDF Download Area of the Revenue website has been corrected and it is understood that the revised cards to be included in the Employer's Budget Pack will also be corrected.
At least one software developer had programmed its system using the erroneous calendar. It would be sensible for employers to check that their system upgrades show Thursday, 12 April, in week 1, not in week 2. Also employers with a Thursday payday should not think that they have a week 53 in 2001/02; it is only employers with a Friday payday that have a week 53 in the coming year.
In addition to the errors in the CA36 SMP Tables mentioned in the last issue, there are also errors on the P11D Working Sheets provided on the Employer's 2001 CD-ROM. The reverse side of Working Sheets 1 to 4 are incorrect. Employers who are making use of these Working Sheets may download the corrected versions from www.inlandrevenue.gov.uk/employers/cdrom_update.htm, or contact 01344 404409. However, the printed versions of the forms provided by the Orderline are correct. - Payroll Briefing 199 - 17 April 2001
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New forms and booklets
All employers should have received their Annual Pack. In addition, almost all of the new and reissued forms and booklets had been supplied by the Orderline by the end of February. Many had been available even earlier from the Revenue's web site. The following points should be noted:
1) The SSP and SMP Tables (CA35/36) have been split into separate books. The Annual Pack includes only the SSP Tables (CA35). If not already done, copies of the SMP Tables (CA36) should be ordered immediately.
2) The NI Tables for not contracted-out employees (CA38), covering table letters A, B and C, have also been split into two, and the new CA38 booklet covers only table letter A. If you need tables for employees paying reduced-rate contributions or for employees over retirement age, the new CA41 booklet covering table letters B and C should be ordered. The other booklets for employees paying contracted-out contributions and for mariners have not been split.
3) A sample of the redesigned P14 is provided, highlighting the changes for 2000/01. Employers are warned that, if they submit P14 forms from previous years rather than those designed specifically for 2000/01, they will be returned. Sufficient quantities of the Revenue's free P14 and P60 forms should be ordered immediately.
4) The Pack also includes a sample of the P11 Deductions Working Sheet for the coming tax year. There are further changes to NICs recording and supplies should be obtained for use from the start of 2001/02.
5) Other forms that are changing for 2001/02 are P9D, P11D and P11D(b) returns, P11D working sheets, P32 payment record, P38(S) student's declaration, and P46(Car). Existing stocks of these forms should all be destroyed at the end of the tax year and replaced by the new versions.
6) The CWG1 Cards have a new look and a new name. They are now Employer's Help Cards, rather than Employer's Quick Guide to PAYE and NICs. However, the 24 cards are still numbered 1 to 23. There is more information included about the NICs section of the P11 but less detail on Class 1A NICs, SSP and SMP.
7) The P9X instructions for tax code changes should be read carefully so that tax codes are updated correctly. Only L-suffix codes are being increased in bulk. Taxable Pay Tables SR + B to D dated May 2000 and Tax Tables A dated 1993 will be used into the new tax year. - Payroll Briefing 198 - 29 March 2001
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Error in SMP Tables
The separate CA36(2001) SMP Tables contain a significant error on pages 5 and 6. Column 3 of the Tables, that shows the latest start date for the 26-weeks continuous service test, gives Sunday dates rather than Saturday dates. The pages are being reprinted and will be sent to everyone who ordered the Tables from the Employer's Orderline. - Payroll Briefing 197 - 15 March 2001
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