Employment tax deadlines

DAC6 reporting 
Deadline for action: Ongoing

Issue: UK intermediaries that promote or assist in the design or implementation of a cross-border arrangement that meets a relevant hallmark are required to report details of that arrangement to HMRC under the EU mandatory disclosure rules known as DAC6 (unless another intermediary will report those details to HMRC by the relevant deadline). The scope of the relevant hallmarks for UK reporting purposes is considerably reduced following the agreement reached at the end of the EU withdrawal transition period. Where a UK taxpayer designs or implements a reportable arrangement and there is no relevant intermediary (or there is such an intermediary, but it is prevented from making a report by legal professional privilege), the taxpayer must report relevant details to HMRC.

A report must be made within a 30-day period beginning with the earliest of: the reportable arrangement being made available for implementation; the reportable arrangement being ready for implementation, or the first step in the implementation of the reportable arrangement being made.

Action: Intermediaries and taxpayers should ensure that they have implemented appropriate procedures and processes and ensure that reporting obligations are met on a timely basis.

Submit paper or electronic forms P46 (car) 
Deadline for action: 2 February 2021, 5 April 2021 and 3 May 2021

Issue: Details of company cars provided to employees or withdrawn without a replacement for the previous quarter should be provided to HMRC using form P46(car). These details are usually submitted electronically. The completed online form can, however, be printed out and submitted in paper form to HMRC by the relevant date. This method cannot be used for replacement vehicles and the form should not be used if the car benefit is taxed via the payrolling of benefits process.

Action: P46(car) forms (electronic or paper) covering the quarter to 5 January 2021 are required to be received by HMRC by 2 February 2021. P46(car) forms covering the quarter to 5 April 2021 are required to be received by HMRC by 5 April 2021 (electronic) or 3 May 2021 (paper).

Onshore & offshore employment intermediaries – quarterly reports 
Deadline for action: 5 February 2021 and 5 May 2021

Issue: Employment intermediaries are required to make quarterly reports to HMRC where they have not operated PAYE. The quarterly reports for the quarters to 5 January 2021 and 5 April 2021 are due by 5 February 2021 and 5 May 2021 respectively. These reports require a considerable amount of information regarding all workers provided to their clients, including those operating via personal service companies (PSC), and related payments where the intermediary, or their payroll operator, did not operate PAYE.

Action: Quarterly employment intermediary reports must be made using HMRC’s report template and submitted using HMRC’s online service. Automatic penalties arise if the report is late or incorrect, with the amount of each penalty depending on the number of offences in a 12-month period: £250 (first), £500 (second) and £1,000 (third and later). The penalty clock is reset once there has been a 12-month period without a late or incorrect return.

PAYE and NICs reporting and payments 
Deadline for action: Monthly – from 19 (or 22) February 2021

Issue: To avoid interest and penalties, employers should make a full payment submission (FPS) to HMRC at the time they pay their employees and pay over deducted income tax and National Insurance contributions NICs by the due date. Income tax and NICs deducted under PAYE should be paid by the 19th of the following month if paid by cheque, or the 22nd if paid electronically. The FPS and, if applicable, an employer payment summary (EPS) should also be submitted by the 19th of the following month.

Action: Employers should submit their FPSs and EPSs (including, where applicable, a report of the apprenticeship levy due and allowance claimed) and pay their PAYE tax and NICs on time. Advance payment should be made where the payment date falls on a weekend. Late payments attract interest at 2.60 per cent per annum, and late filing gives rise to penalties of between £100 and £400 per month, depending on the number of employees.

Employers that have incurred penalties have 30 days to appeal if appropriate.

Construction industry scheme (CIS) reporting and payment dates 
Deadline for action: Monthly – from 19 (or 22) February 2021

Issue: Written statements to subcontractors, CIS300 monthly returns of payments made by contractors to subcontractors, and payment of the CIS tax deducted, should be made on a monthly basis.

Action: Contractors should provide a written statement to every subcontractor from whom a deduction has been made and submit their CIS300 returns by the 19th of the following month to avoid late filing penalties. To avoid interest and late payment penalties, CIS tax deducted should be paid by the 19th of the following month if paid by cheque, or the 22nd if paid electronically. Advance payment should be made where the payment date falls on a weekend.

DAC6 reporting deadline - reporting obligation triggered on or before 30 June 2020 
Deadline for action: 28 February 2021

Issue: UK intermediaries that promoted or assisted in the design or implementation of a cross-border arrangement that met a relevant hallmark, where the first step in implementing that arrangement was made between 25 June 2018 and 30 June 2020 (inclusive), are required to report details of that arrangement to HMRC under the EU mandatory disclosure rules known as DAC6 (unless another intermediary will report those details to HMRC by the relevant deadline). The scope of the relevant hallmarks for UK reporting purposes is considerably reduced following the agreement reached at the end of the EU withdrawal transition period. Where a UK taxpayer took the first step in implementing a reportable arrangement between those dates, and there is no relevant intermediary (or there is such an intermediary but it is prevented from making a report by legal professional privilege), the taxpayer must report relevant details to HMRC.

Where the first step in implementing a reportable arrangement was taken between 25 June 2018 and 30 June 2020 (inclusive), intermediaries or relevant taxpayers are required to make a report to HMRC by 28 February 2021.

Action: Intermediaries should review arrangements advised on and identify any where a reporting obligation was triggered between 25 June 2018 and 30 June 2020 (inclusive), ensuring all relevant reporting obligations are met by 28 February 2021. Taxpayers should also review, and report if necessary, any cross-border arrangements where the first step in implementation was taken in the same period.

Check for new advisory fuel rates 
Deadline for action: 1 March 2021

Issue: HMRC revises the advisory fuel rates every quarter. These rates may be used when an employer reimburses employees for fuel for business travel in their company cars, and when an employer requires employees to repay the cost of fuel used for private travel in such vehicles.

Action: Employers should review HMRC’s advisory fuel rates each quarter to ensure that they are using the current rates. If employers reimburse such costs at different rates, records must be kept that support the rates used.

Comply with new off-payroll worker (IR35) administrative rules 
Deadline for action: 5 April 2021

Issue: Large and medium-sized private sector businesses that engage contractors as ‘end-users’, and intermediaries, are required to comply with new off-payroll worker (IR35) administrative rules from 6 April 2021. Affected end-users that engage contractors and similar workers are required to assess their workforce to identify all workers who work like employees but supply their services through their own contractors’ intermediary entity (typically personal service companies (PSCs)).

Action: Affected end users must assess each relevant contract for services and provide the contractor and any third party they contract through (eg recruitment agencies) with a status determination, setting out the reasons for their assessment. The entity that pays the contractors’ intermediary (the fee payer – eg the end-user or a third party intermediary) must account for income tax, employer and employee National Insurance contributions (NICs) and apprenticeship levy due through PAYE for all contractors assessed to be ‘deemed employees'.

Voluntary payrolling of benefits in kind (BIKs) 
Deadline for action: 5 April 2021

Issue: Employers should register online with HMRC, if they have not already done so, to payroll BIKs. The payrolling rules apply to all benefits except living accommodation and beneficial loans. Benefits payrolled under these rules do not need to be reported on forms P11D.

Action: Employers that are not already payrolling benefits that wish to do so for the 2021/22 tax year and thereafter should register with HMRC as soon as possible so that they can commence payrolling from 6 April 2021. Employers should first consider if systems and procedures support this, and how levels of administration could be affected. Consideration should also be given to the way any changes affect and are communicated to employees.

For more information please get in touch with Anne-Marie Welch.