Newsletter issue – September 2023

On 16 August 2023, the bi-monthly Employer Bulletin was published by HMRC.Employers and agents recognise the importance of the information contained in this and frequently register to get notification of publication. This is admirable, as the Bulletin contained some useful information including:

• The tax relief mechanisms for pension schemes (Relief at Source and Net Pay Arrangement), frequently confused and this article stresses the importance of correctly identifying and applying which is relevant
• Advice on the Real Time Information (RTI) processes to be followed when a PAYE scheme ceases, including payments made to contractors.There are different processes to follow if the scheme includes payments to sub-contractors or only exists to pay sub-contractors. This involves contacting the Construction Industry Scheme helpline (0300 200 3210)
• Several topics regarding complying with National Minimum Wage legislation, including a live webinar explaining the definition of a worker who is 'salaried hours' plus tips on how to avoid compliance errors

The entire Bulletin is worth reading; HOWEVER, the original version contained an error in a section entitled 'Correcting payroll mistakes for an earlier tax year'.Where the employer / payroll provider discovers they have deducted too much Student Loan in a previous tax year, the original advice was:

'Repay the employee even if this was in a previous tax year. RTI submissions must be corrected either via an Earlier Year Update (EYU) or another Full Payment Submission (FPS)'

This is not correct information and should not be acted upon.

The correct advice is contained in the Collection of Student Loans Manual which says:

'If the error is discovered after the End of Year forms have been submitted to HMRC, or after the borrower has left this employment, HMRC will make any repayment due direct to the borrower. The employer does not need to take any further action to rectify the error.'

In short:

• If there is an error in the current tax year and the final RTI submissions have not been sent to HMRC, make the correction
• If there is an error in a previous tax year or the final RTI submission has been sent for the current tax year, DO NOTHING

HMRC deleted the entire article about corrected errors in a previous tax year - which is good, as it was incorrect about National Insurance as well! HMRC have been alerted to the fact that their Bulletin was silently updated meaning there is no history of an original publication and a correction.

The August Employer Bulletin without the 'Correcting payroll mistakes for an earlier tax year' is the correct one. We advise you to ignore the original version.