July can be a busy month for business owners, especially if you employ staff; with several key dates in the tax year coming up.
PAYE Settlement Agreement (PSA)
Tomorrow (Tues 5th) is the deadline for reaching a PAYE Settlement Agreement (PSA) for 2015/16 and applies to employers who wish to pay the tax and NI on benefits provided to their employees.
A PSA allows you to make one annual payment to cover the tax and NI due on irregular or small taxable expenses or benefits for your employees; such as a small Birthday gift, or the costs of shared travel. Agreement must be reached with HMRC by this date.
P11D, P9D and P11D(b)
Wednesday (6th) is the deadline for submitting forms P11D and P9D for 2015/16 which show benefits and expenses provided to employees to HMRC and issuing copies to employees.
Form P11D is for employees or directors who’ve been provided with benefits or expenses and earned £8,500 or more.
Form P9D is for employees or directors who’ve been provided with benefits or expenses and earned less than £8,500.
In addition, form P11D(b) needs to be submitted, calculating the Class 1A NI liability.
Wednesday (6th) is also the deadline for employers who operate a non-tax advantaged Share Scheme, to report share incentives for 2015/16 via form 42.
Securities and securities options include things like shares, bonds or certificates of deposit. For full details download the HMRC report “Employment related securities FAQs”
Class 1A NIC
You can then take a breather until around Tuesday 19th, when the Class 1A NIC is due for 2015/16. Electronic payments have to be cleared by 22nd July, so to avoid interest or possible penalties, make sure you’re ready for this one.
A good way of telling whether you will have to pay Class 1A NICs is if you need to fill in form P11D, ‘Expenses and benefits’. So if you’ve kept on top of your paperwork, this should be straight forward as any benefits should have been reported by 6th July.
PAYE Student loan and CIS deductions
If you have made PAYE deductions from your employees’ salaries or are a contractor who has paid subcontractors under the CIS, then your PAYE Student loan or CIS deductions are due.
Like the NI contributions, electronic payments must be cleared by 22nd July to avoid interest and possible penalties.
PAYE quarterly payments
PAYE quarterly payments are due for small employers for the pay periods 6th April 2016 to 5th July 2016 on Tuesday 19th July.
This deadline is relevant if you’re a small employer that expects to pay less than £1,500 a month, and has arranged to pay your PAYE quarterly.
Once again, any electronic payments must be cleared by 22nd July to avoid interest or late payment penalties.
Second payment on account
Payments on account are advance payments towards your tax bill and may affect you if you have completed a self assessment tax return and make direct payments to HMRC in respect of your income tax, Class 4 NI, capital gains tax and High Income Child Benefit Charge liabilities.