Policy paper: Country by country reporting – updated

Updated: Amendments to the detail section with updates to the Country-by-Country legislation.

This measure will require UK headed MNEs and enable non-UK headed MNEs to provide HMRC with information about global activities, profits and taxes.

More information can be found at The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 No. 237.

This legislation updates the Country-by-Country (CbC) reporting regulations The Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) (Amendment) Regulations 2017 to take account of international developments. In particular the legislation:

  • brings partnerships into scope
  • amends the UK ‘local filing’ requirements
  • introduces a notification requirement

HMRC has published guidance on the notification requirement in the International Exchange of Information Manual and will publish full guidance in due course. A tax information and impact note has also been published please read Amendments to Country By Country reporting 2017.

Source: HMRC

National Statistics: Hydrocarbon Oils Bulletin

Updated: Update with provisional data from March 2017 to May 2017

The Hydrocarbon Oils Bulletin contains statistics and analysis on the duty receipts and clearances for petrol, diesel and other hydrocarbon oils in the UK. The bulletin is updated quarterly.

Source: HMRC

National Statistics: Tobacco Bulletin

Updated: Update with provisional data from February 2017 to April 2017

The Tobacco Bulletin contains statistics and analysis on the duty receipts and clearances for all tobacco products in the UK. The bulletin is updated quarterly.

Source: HMRC

Detailed guide: Payrolling: changes affecting benefits and expenses

Updated: Welsh language version of page added.

You can deduct and pay tax on your employees’ benefits and expenses through your payroll. This is known as payrolling.

If things change, such as an employee leaving or a company car change, you’ll need to recalculate the taxable amount to go through your payroll.

Employee leaves

The employee’s benefit will usually end on their last working day. You should calculate how much taxable benefit to payroll in their remaining paydays. To do this:

  • work out the revised taxable amount for the days in the tax year they had the benefit
  • take away the amount payrolled for the tax year to date
  • payroll the remaining amount over the remaining paydays

If the employee has had their final pay, you can’t payroll the remaining amount. You must tell HM Revenue and Customs (HMRC) so the tax can be collected directly from the employee.

Employee keeps their benefit up to the end of the tax year

You might let your employee keep their benefit up to the end of the tax year after they leave.

Take the amount payrolled for the paydays they’ve had away from the taxable amount for the whole year. This will give you the amount still to be taxed.

You’ll need to add this amount to any remaining payments of wages.

If the employee has already had their last payday, let HMRC know so they can collect the tax owed.

Example: employee gives notice in December that their last day is 28 February

The employee has a company car. The taxable amount is £5,200. This is £14.24 a day (£5,200 ÷ 365).

They will have had the car for 329 days to 28 February. 329 x £14.24 = £4,684.96 revised taxable amount.

£433.33 was payrolled each month (£5,200 ÷ 12). £433.33 x 9 paydays so far = £3,899.97 payrolled to date.

£4,684.96 – £3,899.97 = £784.99.

The balance of £784.99 should be payrolled over the remaining 2 paydays – £329.49 each payday.

Value of an employee’s benefit changes

An example of this could be where a new company car is provided, a premium for medical insurance changes or additional payments are made using a company credit card.

You’ll need to work out a revised taxable amount to payroll. To do this:

  • work out the old taxable amount, up to the day before the value changed
  • add this to the new taxable amount, from the date the value changed to the end of the tax year
  • take away the amount payrolled to date in the tax year
  • payroll the remaining amount over the remaining paydays in the tax year

If you’ve made your final Full Payment Submission (FPS), you can carry this amount over to the next tax year.

Example: employee gets a new company car on 1 August

The original taxable amount was £4,800. This is £13.15 a day (£4,800 ÷ 365).

There were 117 days to 31 July, before the value changed. 117 x £13.15 = £1,538.55 taxable amount before the change.

The new taxable amount is £6,000. This is £16.43 a day (£6,000 ÷ 365).

There are 248 days left in the tax year. 248 x £16.43 = £4,074.64 taxable amount from the date of the change.

The total taxable amount over the whole year is £5,613.19 (£1,538.55 + £4,074.64).

£400 was payrolled each month (£4,800 ÷ 12). £400 x 4 paydays so far = £1,600 payrolled to date.

Total taxable amount £5,613.19 – £1,600 leaves £4,013.19.

This should be payrolled over the remaining 8 paydays – £501.64 a month.

Correcting the taxable amount

If you used the wrong taxable amount by mistake, you’ll need to recalculate the amount to payroll. To do this:

  • work out the correct taxable amount for the full tax year
  • take away the amount payrolled to date in the tax year
  • payroll the remaining amount over the remaining paydays

If you have already submitted your final FPS, you can carry this amount over to the next tax year.

Example: mistake with company car value

The original taxable amount was £4,800. The employer realises after 4 months that the correct value is £6,000.

£400 was being payrolled each month (£4,800 ÷ 12). £400 x 4 paydays so far = £1,600 payrolled to date.

£6,000 – £1,600 = £4,400.

The balance of £4,400 should be payrolled over the remaining 8 paydays – £550 each payday.

Changing the number of paydays

You might need to change the number of paydays, for example, because an employee changes from weekly to monthly pay. To recalculate the amount to payroll, you need to:

  • work out the taxable amount of the benefit for the whole year
  • take away the amount already payrolled
  • payroll the remaining amount over the remaining paydays

Example: employee changes from weekly to monthly pay at the end of November

The employee has a company car. The taxable amount is £5,980.

£115 was payrolled each week (£5,980 ÷ 52). £115 x 34 paydays so far = £3,910 payrolled to date.

£5,980 – £3,910 = £2,070.

This should be payrolled over the 4 monthly paydays from December to March – £547.50 a month.

Change means the tax payable is more than 50% of the pay

If deducting tax for the recalculated benefit means the employee’s tax will be more than 50% of their pay.

Carrying forward a change to the next tax year

If you’ve made your final FPS, you can carry forward the amount that hasn’t been payrolled to the next tax year.

Add the amount still to be payrolled to the first wage payment in the next tax year.

If any change means the taxable amount has reduced, the employee will pay less tax or get a refund.

For Self Assessment, HMRC will accept the figures reported by the employee, where they agree with the employer’s action to carry forward the benefit payrolled in the following tax year.

Class 1A National Insurance contributions payable on the benefit can’t be carried forward to the next tax year. These are payable by 19 July after the tax year end.

Employee has left and no further paydays to payroll the benefit

If an employee has left but there is still a part of the benefit to be taxed, you have 2 options. HMRC will contact the employee for the unpaid tax, whichever option you choose.

Option 1: include the balance in your FPS

Report the taxable amount in taxable pay to date in your FPS and tell HMRC that the employee has left if you’ve not already done so.

Option 2: include the balance on form P11D

Include the untaxed balance on form P11D for the period that the employee had the benefit that wasn’t included in payroll.

Source: HMRC