To apply for an PPE, an employer must provide information on the points to be included in a request to HMRC, including: To manage its resources, HMRC requests calculations that must be submitted each year until a specified date, which may differ by agreement, but which is usually July 31 or August 31. It is interesting to note, however, that there is no legal time limit for submitting calculations, so no penalty can be imposed for not presenting your calculation until that date. They must submit an annual calculation of the income tax payable and the Class 1B NIC. HMRC will verify the calculation and confirm the consent if the basic calculation appears to be correct. An EPI can also help reduce employer management by removing and replacing the requirement to include certain taxable expenses/benefits in employeeS` P11Ds with an annual comparison of HMRC. A PSA is a formal written agreement between the employer and the HMRC. The deadline to apply for an PPE expires on July 5, following the end of the fiscal year to which it relates. However, the EPI cannot apply retroactively to expenses or benefits that PAYE should have claimed. Best practices are to agree on an PPE before the start of the fiscal year to ensure that all the elements you want to include can be included from the start.
If you don`t have a PSA agreement yet, our team of labour tax specialists can help you set up and contact HMRC to make sure the agreement contains everything you want to include now and in the future. If you are a small to medium-sized entrepreneur (SME) with a number of employees, you may want to consider applying for a PAYE Settlement Agreement (EPI) to simplify your NATIONAL Insurance Contributions (NIC) contributions that are paid to your employees for irregular and impractical small expenses or benefits. From April 2018, the annual process for renewing PPE contracts has been simplified, so employers are not required to agree to a PSA with HMRC each year if the categories remain the same. Under the agreement, the EPI will remain in place until the employer or HMRC terminates or amends it. The value of the services provided should be taxed under the EPI at the marginal tax rates of each worker concerned. It is therefore important that tax rates for workers residing in each of the UK countries are also taken into account, as deceded governments (currently Scotland and Wales) are able to set the tax rates payable by taxpayers based in those countries. Articles contained in an EPI should not be reported separately, for example. B on the payroll or in the employee`s P11D. Instead of being taxed on the worker through the P11D process, they are taxed through this annual compensation to the employer.
Instead of not paying Class 1A through P11D (b), the value of benefits is subject to National Insurance Class 1B (NIC) contributions. PAYA compensation agreements (PAYA) are often used by employers to maintain compliance with employee cost and social benefits procedures.