Employer's - Phasing-out of PVE

Contents

Q.I have not received a mailshot explaining the phasing out of PVE.

A. You can obtain a copy of the mailshot (RTF 9K). Alternatively, you could telephone the Employer Helpline on 08457 143 143.

Q. Where can I obtain a copy of the mailshot explaining the phasing out of PVE?

A. You can obtain a copy of the mailshot (RTF 9K). Alternatively, you could telephone the Employer Helpline on 08457 143 143.

Q. I have received a mailshot explaining details of how PVE is being phased out. What do I need to do?

A. The mailshot (RTF 9K) explains the actions that you need to take during the period that PVE is to be phased out. If you have any questions, you need to telephone the Employer Helpline on 08457 143 143.

Q. The mailshot tells me that I must send a letter to all my employees who are receiving PVE explaining that PVE is to be phased out. Why do I have to do this?

A. Regulations have been introduced amending the current PVE Regulations to require employers operating PVE to send one targeted letter to each employee to whom they pay WTC to alert them to the change in payment method. You must do this before 7 November 2005 and use the wording that has been provided on the mailshot (RTF 9K).

HMRC will of course be issuing targeted publicity to all claimants who currently get their WTC through their employer. But the best way of preparing employees for the change is for both the Government and employers to communicate directly with those employees who will be affected. This targeted letter will reinforce the message that employees will get from HMRC.

You can obtain a copy of the PVE Regulations at the following

Q. Is it acceptable for me to send the letter about PVE to all my employees, not just those who receive their Working Tax Credit through the payroll?

A. Yes, provided you make it clear that the letter is intended only for those who currently receive their Working Tax Credit with their pay.

Q. Is it acceptable for me to write to my employees about PVE via the workplace intranet site?

A. Yes, provided the intranet message makes it clear that the message is intended only for those who currently receive their Working Tax Credit with their pay, and the message is clearly highlighted to make sure that employees who currently receive their Working Tax Credit with their pay find and read the message. To pre-empt employees' possible questions to your payroll department, you may wish to include some internal checks to reassure yourself that any intranet message you use is reaching all the affected employees.

Q. Will HMRC check that I have sent out the letter to my employees as instructed on the PVE Mailshot?

A. As part of their normal reviews of employers’ records and systems, HMRC will check that you have complied with the requirement to write to your employees. It is therefore advisable for you to keep copies you can produce as evidence if HMRC ask to see them.

Q. Will HMRC impose a penalty for not sending out the letter to my employees as instructed on the PVE Mailshot?

A. A penalty not exceeding £300 could be charged plus a penalty of up to £60 per day until you remedy the situation by writing to your employees.

Q. I have not received a PVE Stop Notice for one or more of my employees. What should I do?

A. You must continue to action any PVE Notices you receive in the same way as you do now. When it is appropriate HMRC will send you a PVE Stop Notice for each of your employees.

Q. I have received PVE Stop Notices for some of my employees but not all of them. What should I do?

A. For those employees where a PVE Stop Notice has been received you must action these in the normal way. For those employees where you have not received a PVE Stop Notice, these could be issued anytime between the period 7th November 2005 and 18th February 2006. If you have still not received a PVE Stop Notice by the 20th February 2006, you must telephone the Employer Helpline on 08457 143 143.

Q. It is after the 20th February 2006 and I still do not have a PVE Stop Notice for one or more of my employees. What should I do?

A. So that the appropriate action can be taken, you need to telephone the Employer Helpline on 08457 143 143. You must continue to pay the employee(s) until the Tax Credit Office contacts you. You must not pay any tax credits after the 31st March 2006.


Q. I have paid tax credits beyond the 31st March 2006 and have overpaid my employee. What should I do?

A. So that the appropriate action can be taken, you need to telephone the Employer Helpline on 08457 143 143.

Q. I have paid tax credits beyond the 31st March 2006 because of the way in which I administer my payroll i.e. 1 month in arrears. What should I do?

A. So that the appropriate action can be taken, you need to telephone the Employer Helpline on 08457 143 143.

Q. My employee is asking when they are likely to receive payments direct, as I have either already stopped paying them through the wage packet or received a notice requesting that I stop.

A. You should tell your employee to contact the Tax Credit Helpline on 0845 300 3900.

Q. How will the withdrawal of PVE affect my Funding?

A. No funding renewal notices will be issued for 2006/2007. Funding applications will be terminated before funding is calculated for any period from 31st March 2006 onwards.

Q. How do I get hold of the posters and leaflets that promote PVE is being phased out?

A. These are available by contacting the Orderline on 0845 3000 504

Q. How are HMRC publicising the phaseout of PVE amongst my employees

A. HMRC have begun raising awareness through an article in the July edition of Tax Credits Update, that went to all tax credits claimants. We will also send a targeted mailshot to all PVE employees on or shortly after 7 November. This will explain the phasing out process and will tell claimants what they need to do (eg contact us if they want to amend the bank account details they have given us).

We are producing leaflets and posters that you can distribute/display in the workplace. These can be obtained by contacting the Orderline on 0845 3000 504. Also, when we move a claimant from PVE to direct payments we will send a revised award notice that will show the start date, amount and frequency of the direct payments.

Q. Following the recent Budget announcement declaring that PVE was being phased out, can I can now stop paying tax credits to my employee/s?

A. PVE is being phased out between the period 7th November 2005 and 31st March 2006. You must continue to pay tax credits as instructed on the PVE Notice you have received. When HMRC want you to stop paying tax credits in the future they will notify you in the normal way (by sending a PVE Stop Notice). HMRC will give you ample notice of when PVE is to stop altogether.

Q. I am still receiving PVE Start, Amendment and Restart Notices. I thought PVE was being phased out

A. PVE is being phased out from the 7th November 2005. Before this date, you may still receive and be expected to deal with these types of PVE Notices. When it is appropriate HMRC will send you a PVE Stop Notice for each of your employee(s).