HMRC has highlighted changes to PAYE in its most recent Employer Bulletin.
PAYE Settlement agreements
Following a review of customer feedback from employers who make use of PAYE Settlement Agreements, HMRC has redesigned the PSA1 form in line with employer needs. They have also introduced a more efficient digital submission route. The new form is available from PAYE Settlement Agreement (PSA1).
HMRC state that the new digital format offers benefits for employers. These include easy, standardised reporting, improved accuracy, speedier processing times and fewer resulting queries.
Payment deadline and calculation reminder
You must pay any tax and National Insurance owed under a PAYE Settlement Agreement by 22 October after the tax year to which the PAYE Settlement Agreement applies or 19 October if you pay by post.
Further details, including how to pay, can be found here ‘Pay a PAYE Settlement Agreement.
You may incur a penalty or be charged interest if you do not pay, or your payment is late.
You also must send your calculation to HMRC. The PAYE Settlement Agreement PSA1 calculation form is available. You must submit a calculation even if you have no amount due to pay.
If HMRC approves your PAYE Settlement Agreement before the start of a tax year, you can include any expenses and benefits contained in the agreement. If they approve it after the start of the tax year, you might need to report some items separately.
Introduction of employers’ variable payment plan
Employers’ PAYE customers will be able to take advantage of a new variable Direct Debit payment plan from 19 September 2022.
The service can be accessed through Pay employers’ PAYE or directly through the business tax account and the employers PAYE service.
HMRC says that there will be changes to the business tax account and the employers’ liabilities and payments screens on the employers PAYE service. A new link ‘Set up a Direct Debit’ will be introduced and this will allow customers to set up a Direct Debit instruction, authorising HMRC to collect direct from their bank account based on their return submissions.
HMRC has provided updated advice on registering new starters. They say that when completing the first Full Payment Submission for new starters it is important that you obtain and enter your employee’s correct address and postcode and use the employee’s P45 information to record their previous pay, tax and student loan (if applicable).
If the employee does not have a P45 HMRC says that you can use the following starter checklist for PAYE. If you use the starter checklist to add the employee onto your payroll records and you receive the P45 after you have received a tax code from HMRC, you do not need to update the previous pay, tax, or tax code on your payroll software, only update student loan details (if applicable).