End of year employment tax compliance for 2019/20

19 May 2020

Under normal circumstances, organisations would be thinking about the tax and administrative deadlines that are approaching. Whilst HMRC has relaxed certain requirements due to the coronavirus outbreak these have not (as yet at least) been applied to end of year reporting matters. 

Employers need to have robust processes and controls in place to ensure employment tax and National Insurance contributions (NIC) compliance obligations are met. This may be even more difficult with remote working, furloughed employees, and others having to cover for people who are unfortunately unwell

Complications with areas such as the salary sacrifice or optional remuneration arrangement (OpRA) rules, or the trivial benefit rules, along with HMRC no longer having discretion in certain areas, means it’s even more important to make sure returns are correct and submitted on time. Late returns can trigger automatic penalties and for incorrect returns tax geared penalties can be applied, so it can get expensive where mistakes are made.

Upcoming deadlines

What are some of the important deadlines to remember?

Date Action
31 May 2020 Deadline for providing employees with a statement of payrolled benefits for the 2019/20 tax year.
5 July 2020 Deadline for entering into a PAYE settlement agreement (PSA) for the 2019/20 tax year.
6 July 2020 Deadline for the submission of forms P11D and P11D(b) for the 2019/20 tax year.
Deadline for registering new employee share plans (and other reportable arrangements) and for submission of employment related securities returns for the 2019/20 tax year
22 July 2020
Deadline for electronic payment of Class 1A NIC for the 2019/20 tax year (19 July for postal payments).
31 July 2020
Non-statutory deadline for submission of PSA computations for the 2019/20 tax year.
22 October 2020
Deadline for electronic payment of tax and the Class 1B NIC due on PSA computations for 2019/20 (19 October for postal payments).
5 April 2021
Deadline for registering with HMRC for the payrolling of benefits in the 2021/22 tax year.

Required reports

P11Ds are forms which employers must submit to HMRC each tax year to report the value of reportable benefits they have provided to employees and directors, where the benefits are not covered by a formal payrolling arrangement with HMRC, or are not dealt with under a PSA. Find out more.

PSAs are widely used by employers to maintain compliance around certain employee expenses and benefits, particularly for taxable gifts or staff entertaining. By entering into such a formal arrangement, an employer can settle any tax due on expenses and benefits provided to employees by way of an annual submission and payment to HMRC. Find out more.

Share plan and other equity transactions involving UK employees or directors will almost certainly trigger a reporting obligation to HMRC, and by 6 July following the end of the tax year employers are required to report all transactions in employment related securities (ERS). It is also worth bearing in mind at this time there may be many issues  and unintended tax consequences to deal with related to the impact of the coronavirus outbreak. 

If you need any assistance, including with filing submissions, analysing your expenses data, and completing PSA calculations, please get in touch with Susan Ball or Lee Knight