axis payroll User Guide Supplement March 2017

1. What's New?

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The March 2017 axis payroll Legislation Update includes all of the required software changes to meet the latest requirements for RTI.

Please ensure you read the whole of the axis payroll User Guide Supplement March 2017 prior to installing the update and running your year end procedures.

All employers were required to report PAYE in real time from the first payday on or after 6 April 2013.

Reporting PAYE in real time (RTI) means that you send HMRC data about tax, NICs and other deductions using the axis payroll software on or before each earnings payment is made rather than at the end of the tax year.

The information you send tells HMRC how much you should pay to them.

You report your payroll information by submitting RTI Full Payment Submissions (FPS) as part of each payroll run you make in your axis payroll software.

If you need to offset any statutory payments, for example Statutory Maternity Pay, you will also submit a single RTI Employer Payment Summary (EPS) from one of your data sets within 14 days of that particular tax month/quarter i.e. by 19th so that HMRC can reconcile your payment to the figures submitted.

RTI also means that you file year end information by submitting a final EPS for the year which contains all of the required end of year information for HMRC. Further information on PAYE final submission for the year and end of year tasks is available from HM Revenue and Customs at http://www.hmrc.gov.uk/payerti/end-of-year/tasks.htm

Futher information regarding the creation and submission of RTI information from your axis payroll software is provided in the F1 function help for the relevant functions. 

From 6th April 2017, the Government is introducing an Apprenticeship Levy to help to fund and grow the apprenticeship programme.

The levy applies to all employers operating in the UK and is charged at 0.5% of an employer's annual pay bill.  However, an annual levy allowance of £15,000 is available to each employer to offset their liability.  As a result, only employers with an annual pay bill of over £3 million will be required to report and pay the apprenticeship levy.  This £3 million calculation includes connected companies and charities who have annual pay bills over this amount.  

If your pay bill, including connected companies and charities, is below £3 million you need take no action.

Employers affected will be required to report and pay the amount due to HMRC through the normal payroll process.   Your apprenticeship levy must be reported on the Employer Payment Summary (EPS) within 14 days after the end of each tax month i.e. no later than 19th of the following month.  You should pay the levy at the same as you submit your usual PAYE payment and must continue to report this each month, even if your pay bill reduces and you are no longer required to pay.

The axis payroll software has been updated to support reporting requirements for the levy.

With effect from 6 April 2017, Scottish taxpayers will pay income tax using differing rates and thresholds to taxpayers elsewhere in the UK. Employers must ensure they apply the S codes received from HMRC to identify employees who are Scottish taxpayers.

Scottish taxpayers will be identified via address information that is held by the HMRC; it is the employee’s responsibility to update HMRC with address changes to ensure the tax they pay is correct.

If an employer is provided with a P45 with a Scottish tax code they will need to follow the current process when taking on a new employee. If a new starter does not provide a P45, or an employer is unsure what tax code to use, an employer can use the rest of the UK tax code and rate. HMRC will inform an employer if the tax code needs to be changed.

Scottish rates do not need to be displayed separately on the P60 or payslips, but these documents should show the Scottish tax code.

Further information is available on the Scottish Rate of Income Tax at https://www.gov.uk/scottish-rate-income-tax

From 6 April 2016 there were 2 student loan plan types which are known as Plan 1 and Plan 2. Each plan has a different threshold and you will need to deduct student loan repayments using the appropriate plan type.

For the tax year beginning 6 April 2017, the thresholds will be £17,775 for Plan 1 (which includes your employees already repaying student loans), and £21,000 for Plan 2.

How will I know which plan type to use?

From March 2016 the SL1 start notice issued by HMRC shows which student loan plan type you should make deductions against for your employee.

The starter declaration checklist prompts you to ask new employees about their student loan plan type.

Form P45 will only indicate whether an employee is already repaying a student loan. It will not indicate a plan type and so you must ask the new employee for this information.

If your employee does not know their plan type you should use Plan 1 by default and ask your employee to check their correct plan type with Student Loans Company.

In some cases a plan type could change in a tax year. HMRC will notify you by sending a new SL1. When a new SL1 is received showing a different plan type you should simply amend the student loan deduction for the new plan type and deductions will continue uninterrupted. In these circumstances an SL2 Stop Notice will not be issued to you, only a new SL1.

From April 2016 the government introduced a voluntary framework to allow you to payroll most Benefits in Kind (BiKs).

If you want to payroll your BiKs for the tax year beginning 6 April 2017, you must have registered using the online Payrolling Benefits in Kind (PBIK) service.

One of the biggest benefits of payrolling in line with the framework is that you do not need to submit P11Ds for payrolled BiKs.

Starting to Payroll – tax year beginning 6 April 2017

If you want to start payrolling you need to register with HMRC to let them know the BiKs you are going to payroll.

axis payroll supports a “Benefit in Kind” pay component which will be included in taxable pay but excluded from amount paid.

Further information on payrolling on BiK’s is available at https://www.gov.uk/guidance/paying-your-employees-expenses-and-benefits-through-your-payroll

If you are registered for payrolling Benefits in Kind (BiKs), from 6th April 2017 you will have the option to report car information for the tax year 2017/2018.   For tax year 2018/2019 this will become a requirement for those employers payrolling BiKs.

axis payroll has been extended to allow recording of employee car details on the employee record and optionally submit this information in FPS submissions.

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