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Employment Tax

Employment Tax

We aim to keep you updated with all the latest relevant information that will be important for your business.

Matthew Hunnybun


KPMG in the UK


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KPMG's Employment Taxes group helps organisations manage their payroll, benefits and expenses compliance risks as well as implement arrangements to reduce employment tax costs. In this section we aim to keep you updated with all the latest relevant information that will be important for your business.

If you want to know more, or would like us to consider any particular topics, please get in touch.


Off-payroll working reforms: review of implementation announced

The government will review how the off-payroll working reforms will be implemented, but the go live date of 6 April remains.

Are you ready for the changing landscape for company cars?

From April 2020, electric cars will be free of company car tax – should you be electric too?

Update on PAYE Settlement Agreement (PSA) payments

HMRC reminds employers that they should pay tax and National Insurance due under their PSA by 22 October 2019 (19 October 2019 if paying by post).

Disguised Remuneration Loan charge – review announced

The Prime Minster has announced that the loan charge legislation will be reviewed.

Off-payroll working reforms from April 2020 – HMRC publishes new and updated guidance

HMRC has published new and updated guidance to support implementation of the reformed off-payroll working rules from April 2020

Off-payroll working from April 2020 – getting ready for the new regime

The government has published its final proposals for reforming the off-payroll working rules. What should you do now?

The disguised remuneration loan charge – letters from former employees?

What should you do if someone claiming to be a former employee asks you to confirm that you’ve accounted for the loan charge?

Off-payroll working from April 2020: what happens next?

HMRC’s consultation on off-payroll working closed on 28 May – read our insights on what organisations should be doing now.

How to be a modern employer in a digital economy

The way people work has changed more dramatically over the past few years than in the past few centuries. But tax legislation has not kept up with this – yet. Are you ready?

Employment tax end of year reporting

Using technology to help improve compliance and reduce the administration burden of end of year reporting.

National Minimum Wage (NMW) consultation on salaried workers and salary sacrifice schemes

KPMG has submitted its response to the Government consultation on the operation of NMW for salaried workers and salary sacrifice schemes.

Off-payroll working – consultation on the new regime

The Government’s consultation on off-payroll working runs until 28 May 2019 – what does the proposed new regime look like?

Living accommodation benefit in kind changes for University employees?

HMRC has written to Higher Education (HE) and Further Education (FE) employers notifying a change in practice concerning employees’ living accommodation.

Mencap and the Social Care Compliance Scheme (SCCS)

The lack of HMRC guidance on what the Mencap decision means for the SCCS may cause confusion for employers – this is what they need to know

National Minimum Wage (NMW) – Government reports on enforcement activity

The Government’s report on NMW compliance and enforcement in 2017/18 makes interesting reading – what should employers take from it?

Off-payroll working in the private sector: KPMG’s consultation response

KPMG has submitted its views on HMRC’s consultation on off-payroll working in the private sector.

Short Term Business Visitors (STBVs): KPMG’s consultation response 

KPMG has responded to HMRC’s consultation on the tax and administrative treatment of STBVs from overseas branches

Self-employed platform workers – Pay As You Trade?

A new OTS paper explores simplification for self-employed digital platform workers – including tax withholding by the platform operator.

Enterprise Management Incentives (EMI) – HMRC evaluates the commercial impact

HMRC has published research that evaluates how tax advantaged EMI options are delivering for businesses.

Waivers of loans to close company participators taxed as bonuses

First Tier Tribunal (FTT) holds that waiving loans to close companies’ directors who were also participators was taxed as earnings

Consultation on off-payroll working in the private sector launched

The Government’s long awaited consultation on off-payroll working in the private sector was launched on 18 May.

HMRC relaxes conditions for certain childcare voucher (CCV) schemes 

Childcare Voucher (CCV) schemes which closed to new entrants on 5 April 2018, and did not reopen, will retain their income tax and NIC advantages. 

Employment tax compliance advisory

HMRC’s efforts to reduce the administration burden on employersmeans greater reliance is placed on employers having robustcontrols in place to achieve PAYE and NIC compliance.

Requirement To Correct (RTC): Inheritance Tax (IHT) and employment-related trusts

The RTC rules may impose significant penalties on employment related-trusts which fail to correct by 30 September 2018.

HMRC locums campaign

HMRC enforcement teams have launched a campaign to review the employment status of locums.

The new regime for termination payments

Termination payments that currently qualify for the £30,000 tax free amount and are paid free of NIC might not qualify for this treatment from 6 April 2018. This article discusses what employers will need to consider moving into the new tax year.

Taxation of self-funded work-related training

The Government proposes to extend its support for self-funded training to encourage investment in skills and life-long learning. Comments are requested on its current objectives, and how the proposed changes should best be structured.

Simplifying PAYE Settlement Agreements

A summary of KPMG's response to HMRC’s recent consultation. 

National Insurance contributions on termination payments from 6 April 2018

HMRC has confirmed that secondary legislation will be laid to impose NIC on the Post-Employment Notice Pay element of termination payments

Scottish income tax to change from 6 April 2018

Scottish taxpayers will be subject to new Starter and Intermediate rates. The higher and top rates will increase to 41% and 46%. Employers should consider the practical implications.

New Termination Payment Rules: Start date confirmed

HMRC has confirmed its interpretation of the commencement provisions for the new rules on non-contractual pay in lieu of notice.

HMRC policy change on behaviour-based penalties

On 17 December 2017 HMRC released amended factsheets in order to reflect a change in policy regarding behaviour-based penalties.

Finance (No2) Bill 2017-19

The third Finance Bill of 2017, published on 1 December, does not contain too many surprises for employers. But, as the main Budget announcements show, there may be plenty more change to come.

The taxation of employee expenses

No plans for fundamental reform. 

IR35 in the public sector

HMRC has now started to review compliance with the new IR35 rules.

Autumn Budget 2017 – Employment Tax overview

With the Ashes getting started in Australia, the Chancellor played with a straight bat but there were a number of important updates on consultations and future plans

Employment Status and the Taylor Review

The Government will publish a discussion paper as part of its response to the Taylor Review, exploring options for reform to employment status tests.

Off-payroll workers in the private sector

The Government has announced its intention to consult on the extension to the private sector of the IR35 reforms, introduced in the public sector earlier this year. 

Should employment related trusts register via the new Trust Registration Service?

The regulations implementing the Fourth Money Laundering Directive (MLD4) came into force on 26 June 2017 and with them came the requirement for certain trusts to provide specified information to HMRC. 

Applying the Apprenticeship Levy in Scotland

The Scottish Government announces details of the ‘Flexible Workforce Development Fund’ available to apprenticeship levy paying employers in Scotland.

Disguised remuneration: the Close Company Gateway and 2019 loan charge reporting

The draft clauses for future Finance Bill 2017-18, expected later this year, confirm the Government’s intention to introduce the Close Company Gateway and to impose a duty on taxpayers to provide information to HMRC relating to the 2019 loan charge 

Termination payments 

The release of the new draft clauses of the Finance Bill 2017-2018 heralds the curtailment of Foreign Service Relief (FSR) for termination payments from 6 April 2018.

Finance Bill 2017-19 reintroduces changes

The second of 2017’s Finance Bills has reintroduced all of the employment tax measures dropped before the General Election.

HMRC announces new settlement opportunity post-Rangers 

HMRC has announced a new settlement opportunity in the wake of the Supreme Court decision in Rangers.

PAYE penalties – 3 day easement extended

HMRC has confirmed it will continue with its risk-based approach to PAYE penalties for the 2017/18 tax year including the 3 day easement

Does the UK need a robot tax? 

Reports of the world’s first robot tax are slightly exaggerated, but the underlying problem is real and the UK will need to act soon.

First opinion of GAAR advisory panel published

The GAAR advisory panel has recently published its first opinion in a case of employee reward involving gold bullion. 

KPMG’s response to the call for evidence on the taxation of employee expenses

In response to HM Treasury’s call for evidence on the taxation of employee expenses we conducted an online survey of employers during the months of May and June. Combining the survey results with our own experience we have recently submitted our written response.

Examining the Taylor Review

A recent article for Tax Journal looks at the report’s recommendations and their employment law and employment tax implications.

HMRC’s Large Business team kicks off a second round of KYC reviews

HMRC’s Large Business team has recently launched a second round of KYC reviews, following on from its initial visits to some employers in 2014 and 2015.

Finance Bill and making tax digital deferred

Both the Summer Finance Bill (SFB) and the start date for Making Tax Digital (MTD) have been deferred.

Voluntary Payrolling of benefits provided via Optional Remuneration Arrangements

HMRC grants P11D concession for 2017/18

Taylor Review of modern working practices

We consider the implications of the Taylor Review of modern working practices on employment law and employment taxation.

The OTS has published an updated focus paper on the ‘Gig’ economy

Food for thought in advance of the publication of Matthew Taylor’s Review of Modern Employment Practices.

Time for a different approach on employer’s NIC?

Colin Ben-Nathan, Partner, KPMG UK, takes a look at the case for reform of employer’s NIC, and the ways in which it could be carried out.

Supreme Court finds for HMRC in Rangers EBT case

The Supreme Court, in a unanimous decision, has dismissed the taxpayer’s appeal in what became known as the “big tax case”.

What are your options? NCL Investments & Anor v HMRC

In the recent case of NCL Investments Limited & Anor v HMRC, the First-Tier Tax Tribunal found that the accounting expense relating to the grant of share options to their employees was deductible for corporation tax purposes. 

Annual reporting for employment-related securities

The Employment Related Securities (ERS) annual returns deadline has been extended to 24 August from 6 July following HMRC Online Services' IT glitch.

Subsistence allowances to lorry drivers

HMRC guidance introduces new conditions for subsistence allowances to lorry drivers to continue to be exempt from income tax.

We need your help! Call for evidence on the taxation of employee expenses

HM Treasury has published a call for evidence on the taxation of employee expenses. Please take our survey to help shape our response. 

Finance Bill 2017

Finance Bill 2017 completed its passage through the House of Commons and the House of Lords in April, on an accelerated timetable due to the upcoming general election, and received Royal Assent on 27 April 2017. As many had anticipated, a lot of the more complex measures have been dropped from the Bill after negotiations with the Opposition.

Impact of ‘hard Brexit’ on social security for internationally mobile employees

Could ‘hard Brexit’ cause social security difficulties for employees who work abroad?

Call for evidence on the taxation of employee expenses

The call for evidence on the taxation of employee expenses seeks to better understand how the relief is being used. 

Optional Remuneration Arrangements

The Finance Bill introduces legislation designed to remove the Income Tax benefits of Optional Remuneration Arrangements (OpRA). However, some question marks remain.

Draft Finance Bill 2017: Off-payroll working in the public sector: reform of the intermediaries legislation (IR35) 

The draft Finance Bill 2017 sets out the proposed new rules that will apply to public sector bodies hiring off-payroll workers via personal service intermediaries. 

Termination Payments – changes to Income Tax and National Insurance contribution (NIC) legislation

The Finance Bill contains significant changes to the taxation of termination payments which are due to come into effect from 6 April 2018. 

Draft Finance Bill 2017: Changes to disguised remuneration legislation 

HMRC have announced certain changes to their proposals to extend the disguised remuneration rules. The changes include some additional (and welcome) exclusions and other responses to concerns with the breadth of some of the earlier proposals. However, most of the earlier proposals are to be proceeded with in Finance Bill 2017. 

Spring Budget 2017

We need to change the way we tax work, says KPMG. Changes will need to be wide ranging and will go to the very core of the UK tax system.

Optional Remuneration Arrangements – what do the changes mean? 

Salary sacrifice rules coming in from April 2017 have generated a lot of scrutiny as firms seek to revise and refine their current offering. 

IFS Green Budget – Changes in work patterns and the Gig Economy

Interesting things are happening in the labour market, but nothing fundamental has changed. Yet. 

HMRC publish new guidance on ‘negative earnings’

The case of HMRC v Julian Martin introduced the concept of negative earnings. HMRC have now published their view following a UT decision. 

An update on the 'Gig Economy'

An update on the various strands of work currently ongoing in the 'Gig Economy'.

Dates for 'making-good' taxable benefits-in-kind

The dates for "making good" non-payrolled benefits-in-kind (BiKs) are to be aligned to 6 July following the end of the tax year in which the tax charge arises.

Off-payroll working in the public sector: Reform of the intermediaries legislation (IR35)

The draft Finance Bill 2017 sets out the proposed new rules that will apply to public sector bodies hiring off-payroll workers via personal service intermediaries.

Changes to the disguised remuneration landscape

HMRC have announced certain changes to their proposals to extend the disguised remuneration rules.

Simplifying PAYE Settlement Agreements

The Government is simplifying the administration of PAYE Settlement Agreements by removing the need to agree them up front and providing further guidance on what can be included.

Salary Sacrifice Arrangements - The tax and NIC treatment of Benefits-in-Kind (BIKs) when provided via a salary sacrifice arrangement

The income tax and NIC treatment of Benefits-in-Kind provided as part of a salary sacrifice arrangement is to be modified from 6 April 2017.

Is changing the IR35 rules really the answer?

The Government's decision to press ahead with reform to the off-payroll working (IR35) rules in the public sector from April 2017.

Autumn Statement 2016 - Employers overview

There were a number of updates from a people and pay perspective, following on from the latest round of consultations, together with the announcement of plans for further reviews and calls for evidence in 2017. From an employers' perspective, the main developments were centred around salary sacrifice, IR35, PAYE settlement agreements, and termination payments.

Tax, BEPS and your business

BEPS represents a fundamental change to the corporate tax landscape and it's effect will be felt across your whole business.

HMRC policy change on behaviour-based penalties
HMRC policy change on behaviour-based penalties

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