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Reminder of April 2021 HMRC Deadline Dates

31/03/2021

In this blog post we highlight the HMRC April 2021 deadline dates that are worth remembering to avoid late filing financial penalties.

How can employers simplify their employees’ Income Tax payment compliance requirements?

Why not payroll your employees’ Income Tax liabilities due on their taxable benefits-in kind for and from the tax year 2021/2022? Please note that the HMRC registration deadline date for this is 5 April 2021.

The advantage to payrolling employee benefits-in-kind is that it avoids the employer having to complete and file to HMRC the annual form P11D for ‘each one’ of their employees. It also avoids the risk of HMRC levying on the employer what are severe financial penalties if the above-mentioned annual forms P11D are filed late to HMRC!

The employer will still need to file to HMRC the annual form P11D(b) declaring the ‘total’ taxable benefits-in kind for their employees and then paying to HMRC the employer’s Class 1A NIC liability as assessed on the total taxable benefits-in kind as declared to HMRC on the form P11D(b).

The form P11D (b) needs to be filed to HMRC and the Class 1A NIC liability paid to HMRC by the 22 July (or 19 July if paid via post) following the end of the relevant tax year e.g. for the tax year 2020/2021 the Class 1A NIC filing and payment deadline is 22 July 2021.

If the form P11D(b) is filed to HMRC and/or the Class !A NIC liability is paid to HMRC late then HMRC will charge to the employer the late filing/payment financial penalties!

Payrolling your employees’ taxable benefits-in kind will mean that the relevant employee’s Income Tax liability will be paid to HMRC monthly via the payroll as based on the known taxable benefit-in kind. However, in practice your employees already do pay their Income Tax liabilities on their taxable benefits-in kind via the payroll as HMRC would have adjusted the relevant employee’s PAYE code number to take account of their taxable benefit-in kind but this is normally by HMRC estimating the value of the benefit (usually taking the previous year’s taxable benefit amount) so it is likely to give an underpayment of tax which will have to be paid to HMRC by the employee via the Self-Assessment tax system.

In short, we can see no downside to an employer payrolling their employees’ taxable benefits but the upside is saving the employer their valuable time of having to complete the annual forms P11D and also avoiding the risk of being charged heavy HMRC financial penalties for the late filing of the annual forms P11D as required for each of your employees. However, if you want to start payrolling your employees’ taxable benefits for the tax years for and from the tax year 2021/2022 you do need to register with HMRC by 5 April 2021- so immediate action is required!

Payroll Compliance – End of the Tax Year 2020/2021 Filing Requirements

For those employers that operate payrolls the good news is that HMRC have not made any changes to the normal year end procedures which for the current tax year 2020/2021 are only just over a week away!

Helpfully HMRC have issued a reminder to employers-see the link below-as to what must be done and the time limits for so doing.

https://www.gov.uk/payroll-annual-reporting/send-your-final-payroll-report 

The important matter to remember is that you must indicate on your last payment submission (FPS) or employer payment summary (EPS) that you are filing to HMRC your final PAYE submission for the tax year 2020/2021. Be aware that your payroll software may not automatically make the above-mentioned indicator to HMRC on your FPS and so HMRC may then ‘plague’ you with reminders followed by estimated liability demands! To avoid the above HMRC reaction file your FPS and your EPS with the ‘last payment’ indicator ticked. The filing to HMRC of an EPS with the above-mentioned last payment indicator ticked can also be made by an employer if they are not to pay any employees by 6 April 2021 and the FPS previously filed to HMRC did not show that this was the ‘final FPS’ for the tax year 2020/2021.

Please note: the HMRC filing deadline date for all of the above 2020/2021 FPS and EPS filing requirements is 19 April 2021.

Annual Tax on Enveloped Dwellings (ATED)

ATED – what is it?

ATED is an annual property tax that is charged on each UK based residential property (dwelling) that is owned by a company or partnership provided the dwelling is valued at £500,000 or more on 1 April 2017 or, if bought after 1 April 2017, as on the date of acquisition of the dwelling.

The owner of the ATED property must online register with HMRC and online file to HMRC a ATED annual return (the ATED Return chargeable period is from 1 April to 31 March) so that the ATED property tax charge can be assessed and the liability paid for ‘each’ ATED property owned. Currently the ATED property tax charge starts at £3,750 for a dwelling valued between £500k and £1m and then there are incremental increases to the ATED property tax charge depending on the value of the dwelling until the maximum ATED annual property tax charge of £237,400 is reached for a dwelling valued at over £20m.

Please note: that for ATED dwellings owned on 1 April 2021 the owner needs to be online registered with HMRC, a ATED Return online filed to HMRC and the ATED property tax charge paid to HMRC ‘all’ completed by 30 April 2021!

If a ATED dwelling is bought part way through a ATED chargeable period-1 April to 31 March inclusive-then the owner needs to be online registered with HMRC, the ATED Return online filed to HMRC and the ATED property tax charge (the ATED property tax charge liability will be pro-rated to the period own as compared to the 12 months ATED Return chargeable period) paid to HMRC ‘all’ within 30 days of the date of the dwelling’s acquisition. Special ATED HMRC online registration and online filing rules apply for newly constructed dwellings and dwellings created from existing dwellings.

There are ATED Return exemptions and reliefs available- the main one being if the relevant ATED dwelling is let on commercial terms or the dwelling is being redeveloped for resale. If a ATED relief is claimed then it should be declared to HMRC on a ATED Relief Declaration Return.

Please note: that the above-mentioned HMRC online registration and online filing deadlines also applies to the filing to HMRC of a ATED Relief Declaration Return for ATED dwellings. So for ATED dwellings owned on 1 April 2021 the HMRC online filing deadline is also 30 April 2021.

As you would expect HMRC levies financial penalties on the owners of ATED dwellings that are late online filing to HMRC their required ATED Returns!

If you require help with your UK fiscal requirements – don’t hesitate to contact us. We work with small, medium and large businesses and are on hand to discuss your needs.