Employee tax compliance deadlines

Tue 24 Jun 2014

June is a busy month in the world of employment tax and employment-related securities (ERS) as the following deadlines approach.

5 July

This is the effective deadline for making a PAYE settlement agreement (PSA) whereby the employer contracts with HMRC to pay a sum representing PAYE and NIC on benefits in kind to its employees that are small, irregular or impracticable to account for by other means.

5 July is a Saturday this year

Electronic payments will be feasible on Saturday 5 July but HMRC offices will not be open for finalising PSAs, so Friday 4 July will the last day on which a PSA can be made.

Adopting a PSA removes the need for:

• the employer to submit forms P11D or P9D; and
• the employee to make any tax return entry for the benefit so covered.

The deadline also applies to taxed award schemes (TASs). TASs are less common, mainly used by third parties to account for incentives and other awards to non-employees, e.g. their customer’s salespeople. Where a TAS is used the person providing the award contracts with HMRC to pay tax at either basic or higher rate.

TASs may also be used for awards to the provider’s own employees but are generally less advantageous than PSAs because they do not completely remove the employee’s liability, unlike PSAs:

• the employee still has to include the award on his/her tax return and so may face an increased liability; and
• the TAS agreement imposes on the provider the compliance  burden of giving the recipient of the award details of its value and the tax paid.

Nevertheless, a business that makes awards to both its own and outside employees may find it easier to operate a single system for all and so opt only for the TAS.

(See HMRC manual EIM11235)

6 July

Employment-related securities deadlines are for filing:

• EMI40 Enterprise Management Incentive returns; and
• Form 42 employment-related securities returns,

These 2013/14 returns are the last to be completed on paper.

P11Ds are also due to be filed by 6 July.

7 July

Specific share incentive scheme returns due on this day are:

• Share incentive plan (SIP) Form 39;
• save as you earn (SAYE) Form 34; and
• company share option plan (CSOP) Form 35