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HMRC say they will apply common sense when deciding whether employers of expatriates have a reasonable excuse for PAYE delays relating to real-time information.
The Revenue will take the approach in matters of tardiness in informing the department about tax and National Insurance (NI) due on payments and notional payments made in-year to expatriates by third parties and overseas employers, and in not paying the tax and NI by the due date.
The commonsense reasoning will also apply where employment income is paid to an employee in respect of employment-related securities; for example, on the exercise of share options.
The taxman – when assessing whether there is a reasonable excuse – does not expect employers to depart from currently accepted practice in relation to arrangements of the type sometimes referred to as “sell to cover”, “sell all”, “self fund”, or “hold all”.
HMRC explain in the latest edition of their employment-related shares and securities (ERSS) bulletin that they expect late reporting of expatriate and employment-related securities income to normally take place no later than the next regular monthly payroll date, and that the relevant payment would be made within the normal PAYE deadlines for that month.
In addition, employment income must be subject to tax in accordance with the relevant legislation for the year of receipt or entitlement, and must be subject to NI by reference to the correct pay period. Payments identified after 19 April following the end of the tax year in which they are made must be reported on an “earlier year update”.
The new ERSS bulletin covers a number of other subjects, including:
- The phone number for the Revenue’s team in Nottingham has changed to 0845 600 2622.
- HMRC are still receiving schemes submitted for approval without appropriate evidence that the scheme has been adopted. There have also been instances of resolutions that are signed but not dated, or signed by an unidentified individual. Such oversights lead to delays in the approvals process until a certified copy of a resolution or minutes is produced. Evidence that the scheme has been established by a company is required for the department’s approval.
- A notice-to-participants reference to the Department of Social Security can be changed to Department of Work and Pensions.
