Employment tax reporting – are you making the most of the opportunity?
It’s not just duties and deadlines
It’s not just duties and deadlines
As we approach the tax year-end, employment tax and payroll teams will inevitably focus on employer reporting obligations. But viewing the year-end solely in terms of duties and deadlines – as nothing more than an administrative job to be done – misses an important opportunity. The end of the tax year is the ideal time not only to review the year just gone, but also to plan your approach to future developments. This article summarises key year-end tasks and deadlines, and signposts prospective developments to consider as you think about the year ahead.
What do I need to think about for my 2023/24 employer compliance?
Key actions and deadlines for 2023/24 employer year-end compliance are summarised below:
Key action |
On or before |
Register with the HMRC’s voluntary payrolling benefits and expenses online service for 2024/25 |
5 April 2024 |
Provide employee statements of any voluntarily payrolled benefits and expenses for 2023/24 |
1 June 2024 |
Agree a PAYE Settlement Agreement (PSA) (or change items covered by an existing PSA) for 2023/24 |
5 July 2024 |
Submit forms P11D and P11D(b) for 2023/24 and pay associated Class 1A NIC |
6 July 2024 |
Report relevant post-termination benefits provided during 2023/24 |
6 July 2024 |
Register any new share plans (or other reportable arrangements) and submit any required employment-related securities returns (including nil returns) for 2023/24 |
6 July 2024 |
Report relevant benefits provided under an Employer-Financed Retirement Benefits Scheme during 2023/24 |
7 July 2024 |
Submit PSA computations for 2023/24 (HMRC usually impose this as a contractual deadline, but it might be possible to agree a later date) |
31 July 2024 |
Pay tax/Class 1B NIC liability for PSA 2023/24 by post |
19 October 2024 |
Pay tax/Class 1B NIC liability for PSA 2023/24 online |
22 October 2024 |
How can I get ‘future ready’?
There are some general trends to consider.
HMRC increasingly scrutinise the integrity of company data and the processes, controls, and governance that underly year-end compliance. So as we move into the next tax year, it’s important to think critically about how the data you collect and curate, and your processes, controls and governance for working with it, might need to adapt to meet foreseeable demands in the years ahead.
It’s also important to challenge whether you’re maximising the value you get from your year-end data, and benefiting from any additional workforce insights it could yield. For example, are you investing appropriately in automation, to minimise the demands that high volume repetitive processes (e.g. PSA preparation) place on your people and free their time for higher value activities? Also, have you started to think about how advances in Artificial Intelligence could enhance the value that your payroll function generates?
There are also specific issues to prepare for – and some possible developments to monitor – that could impact your employee reward, employment tax, and payroll strategies and operations. Some key prospective developments, not all of which will be relevant to all employers, are summarised in the table below.
Date |
Prospective developments and potential actions |
6 April 2024
|
A number of changes come into effect at the start of the next tax year – the reduction in employee’s NIC, the new Off-Payroll Working offset (see our thoughts on what organisations could consider to get ready), and changes to the Construction Industry Scheme treatment of certain payments from landlords to tenants, and to the gross payment status tests. As well as finalising your systems to get ready for these imminent changes, it’s important to plan testing to confirm how they’re performing after an initial period, and how any learnings will be actioned. |
18 April 2024
|
Tax Administration and Maintenance Day 2024 – the Government has confirmed that it will provide an update on the consultation on tackling non-compliant umbrella companies in labour supply chains, and that further guidance (to supplement the guidance published last year) for organisations that engage with umbrella companies will be released over the summer. There might also be updates on the consultations on tax breaks for employer provided occupational health support, tax-advantaged employee share plans, and employee trusts. Organisations that engage contingent labour should review the outcome of the umbrella company consultation – and what it might mean for their labour supply chain risk – with particular care. And all employees should consider what impact announcements on occupational health, and employee share plans, might mean for their total employee reward. It's worth thinking now about who the relevant stakeholders are in your organisation (e.g. procurement, legal, reward, HR, payroll, finance, and tax), ensuring they’re aware of these potential developments, and ready to work together on a joined up approach to any announcements. |
1 July 2024
|
New rules on allocating employee tips in Great Britain – the Employment (Allocation of Tips) Act 2023 requires employers in England, Scotland and Wales to meet new legal requirements on how certain tips, gratuities and service charges are allocated and paid to the workforce. Any changes that organisations make to their systems and processes to comply with these new rules could affect their payroll withholding obligations. You can read more detail on these new rules, and how businesses can prepare, in this article. |
6 April 2025
|
Increased Real Time Information reporting of working hours – for 2025/26 and subsequent years employers will be required to report additional information through the payroll system on employees’ hours worked and, in certain circumstances, descriptions of the payments made. Employers should consider what these changes will mean for their payroll/ HR systems and processes , and work through what steps they might need to take to prepare for their new reporting obligations from 6 April 2025. |
6 April 2025
|
Residence-based taxation replaces the ‘non-dom’ regime – also from 2025/26, the current remittance basis of taxation for non-domiciled individuals is expected to be replaced by a residence-based regime. This is relevant to employers with internationally mobile employees, who should consider its impact on secondment policies and costings (including changes to Overseas Workday Relief eligibility). You can read more detail on these new rules in this article. |
6 April 2026
|
Mandatory payrolling of Benefits-in-Kind – the Government has announced that, to simplify and modernise the tax system, payrolling Benefits-in-Kind, which is currently voluntary, will become mandatory from 6 April 2026. HMRC will consult stakeholders on the details of mandatory payrolling, and draft legislation will be published later this year for consultation as part of the tax legislation cycle. You can read more detail on these new rules, and how businesses can prepare, in this article. |
How can KPMG help?
Please reach out to this article’s authors, or your usual KPMG in the UK contact if you would like to talk through how KPMG in the UK could support your year-end employment tax compliance, and your planning for the years ahead.
