SALF804 - Other Issues: PAYE
Self assessment applies to employees who get tax returns or
make claims
Who will get tax returns?
| 8.5 | Around 28 million people
are currently covered by the Pay As You Earn (PAYE) system. Up to 4
million of them are sent tax returns and required to self assess.
These are people who are liable to tax at a higher rate and/or have
relatively complicated tax affairs. |
Information required in the tax returns
| 8.6 | The information required
is that needed to establish and calculate the taxpayer's total
taxable income (from all sources) and any chargeable gains for the
period covered by the tax return and to calculate the tax due. For
employees, the information required includes details of expenses
payments and benefits (except those covered by a dispensation), as
well as wages and salaries. Employers are required to provide all
employees with details of expenses payments and benefits to enable
them to complete tax returns if they get them. |
Employers’ obligations
| 8.7 | Obligations on employers
are laid down in the PAYE Regulations. |
PAYE Regulations
| 8.8 | Employers have to
- send P11Ds to HMRC by 6th July
- report expenses payments and benefits
where they arrange the provision through third parties
- show the cash equivalent of any
benefits
- copy the information on the P11D to the
employee by 6th July
- give the P60 to the employee by 31st
May.
|
| 8.9 | There is also an
obligation on third parties making expenses payments and benefits
to employees where the direct employer is not responsible for
reporting them on form P11D. The third party has to provide written
details to the employee of the expenses payments and benefits by 6
July following the tax year in which they are paid or provided,
and, where benefits are provided, the cash equivalent has to be
stated. |
Section 15
| 8.10 | Section 15 is a general
information-seeking power enabling HMRC to require employers and
third parties to provide details about expenses payments and
benefits in kind provided to employees. |
Section 15(5)(b) and (9)(b)
| 8.11 | HMRC is able to ask the
employer to provide information about expenses payments made to,
and benefits provided for, his or her employees by another person
where the employer has arranged them. |
Section 15(9)(a) and 10(a)
| 8.12 | In addition HMRC is able
to require returns under Section 15 to include the cash equivalent
for each benefit in kind. |
Section 15(10)
| 8.13 | Finally, HMRC is able to
require third parties to return details of expenses payments as
well as benefits. |
