Employment tax update - October 2023

04 October 2023

HMRC have now released their September Agent Update (Issue 112).

This bulletin follows the release of the September Agent Update (Issue 112). This month the content most relevant to employment taxes and reward activities is self-assessment focused and includes:

Helping customers identify signs of tax avoidance

Updated 2022 to 2023 self-assessment exclusions and special cases documents for individuals

The registration deadline for self-assessment returns is approaching

  • The deadline for registering to file a self-assessment return for the 2022/23 tax year is 5 October 2023.
  • HMRC have produced videos to help customers with the registration process, including how to give delegate access to any supporting agent. Watch these videos in Issue 112.

Reducing self-assessment repayment delays

  • HMRC have shared a list of factors that can help reduce payment delays. We have summarised a few common factors below, but if needed a more comprehensive list of repayment inhibitors can be found in the Self Assessment Manual:
    • ensure customer registration is complete and await receipt of a filing notice before submitting a return;
    • do not submit a repayment claim within 14 days of making a payment; and
    • confirm customer information is up to date including personal addresses and relevant bank account details.

Reporting taxable remittances on self-assessment returns

  • HMRC are finalising a new toolkit to help agents ensure that non-domiciled individuals are reporting taxable remittances properly on their self-assessment returns.
  • The aim of introducing this toolkit is to ensure non-domiciled individuals understand (i) HMRC’s expectations with regards to reporting taxable remittances, (ii) the benefits of fully engaging in the process, and (iii) the potential consequences of not engaging such as the cost of HMRC enquiries.
  • The toolkit should be available for use later in October.

Self-assessment student loan deductions and payrolled benefits in kind (BIKs)

  • HMRC has identified a small population of individuals that have been overcharged student loan repayments on their self-assessment returns.
  • The error arose because the figure HMRC use to work out student loan repayments can include amounts relating to payrolled BIKs. As student loan deductions are not due on payrolled BIKs that are not subject to Class 1 NIC, and as HMRC’s systems are currently unable to differentiate between payrolled BIKs and other PAYE income, in certain situations the student loan charge calculated by HMRC was inflated.
  • HMRC are writing to affected customers, offering a refund or permission to allow the overpayment to be offset against the affected individuals’ loan balance. They are also working to update their systems to prevent this issue arising again.
  • Until this issue is fixed however, customers should follow the steps set out in "Tell HMRC about a student or postgraduate loan in your tax return" when submitting their self-assessment returns.