Release 4.08.00

Version

4.08.00

Released

 Mar 20

Summary

This release includes the statutory payroll changes for the 2020-21 tax year, plus a number of new non-statutory features.

Statutory changes:

• Employment Allowance

• Company Car Benefit Calculation

• Employer Payment Summary

• Full Payment Submission

• Earlier Year Update for tax year 2019-20

• Employer Class 1A NICs on termination payments & sporting testimonials

• Off-payroll workers in the private sector

• Statutory Parental Bereavement Pay

• New NI, PAYE and statutory payments rates and bands

• P60 Layout change to separate Postgraduate Loan details

Non-statutory improvements:

• Email address field added to Employee Record Card Report

• MDC PT Salary and Overtime populated with required values

• Employee drilldown will now take PGL refunds into account

• Include refunds in the Multi Period Student Loan Summary

• Old P46 Reports removed from the library

• New export file for DEA attachments

• Forename 2 now shown on payroll run screen

• Display the Employers Pension value using the relevant sign

• Standard Life WPH Payment file changes

• Removal of Microsoft Word Payslip Export options

• Apprenticeship Start Date

• RTI BACS

• Audit Log

• Online Filing

The Employment Allowance is currently claimed by employers to reduce their employers secondary Class 1 NICs bill by up to £4,000. From 6 April 2020, extra checks are needed to ascertain eligibility. Employers can claim the allowance if their secondary Class 1 NICs liability was less than £100,000 in the prior tax year. Employers whose secondary Class 1 NICs liability was £100,000 or more will not be eligible to claim the allowance.

Because of the change, from the 2020-21 tax year the Employment Allowance is considered to be a type of de minimis state aid because it advantages some businesses over others, which could potentially distort competition and trade within the European Union. This will not apply if the business does not engage in economic activity by putting goods or services on the market. Businesses must ensure that the £4,000 allowance when added to other de minimis state aid received or allocated in the claim year plus the previous two tax years does not exceed the de minimis state aid threshold for the trade sector. For further information please refer to https://www.gov.uk/guidance/state-aid.

Employers need to reapply for the de minimis state aid Employment Allowance at the start of each tax year. HMRC will be responsible for ensuring compliance with the de minimis state aid rules.

Software changes

From tax year 2020/2021, if a company is already claiming Employment Allowance (selected in Company | Alter Company Options | Company), during the year-end process you will now be required to confirm if you are continuing to claim Employment Allowance.  

If you have selected Continue to claim Employment Allowance, select the relevant De minimis state aid option from:

• De minimis state aid does not apply

• Agriculture

• Fisheries and Aquaculture

• Road Transport

• Industrial

If de minimis state aid rules apply to your business, you must make sure that receipt of the full £4,000 allowance in the claim year (when added to any other de minimis State aid already received or allocated in the claim tax year and the previous 2 years) would not result in you exceeding the de minimis state aid threshold for your trade sector(s).

Note: From 2020/2021, an EPS must now be sent in month 1 to notify HMRC you are claiming Employment Allowance or that your status has changed.

Applies to

Employers claiming the Employment Allowance.

Effective

From 6 April 2020.

More information

For details about the Employment Allowance, visit www.gov.uk/claim-employment-allowance.

From 6 April 2020, additional details need to be recorded for company cars:

• The date the car was first registered, this is mandatory from April 2020.

• The zero-emission miles before exhaust emissions start. This is required from April 2020 only if the car has between 1g/km to 50g/km of CO2 emissions.

You need to register with HMRC online before the start of the tax year that you want to payroll the benefit for.

Software changes

Under Company | Configure Company Car Details | Car Details screen, a new Zero Emissions field has been added.  To the right of this field, the text Mileage will be displayed. This field will be disabled unless C02 Emissions has a value between 1 and 50.

For cars with 1 – 50g/km C02 emissions, you need to complete the Zero Emissions field. The default is 0 miles. If the C02 Emission value is over 50, the Zero Emissions field will be blank.

Calculating Cash Equivalent

The New European Driving Cycle (NEDC) table for C02 emissions will be used to calculate the cash equivalent for cars registered prior to 6th April 2020. For cars registered after the 6th April 2020, the new Worldwide Harmonised Light Vehicle Test Procedure (WLPT) table will be used.  For further information please refer to https://www.gov.uk/government/publications/taxable-benefits-and-rules-for-measuring-carbon-dioxide-emissions/taxable-benefits-and-rules-for-measuring-carbon-dioxide-emissions

Applies to

Employees with company cars.

Effective

From 6 April 2020.

More information

For details about payrolling car benefits, visit www.gov.uk/guidance/payrolling-tax-employees-benefits-and-expenses-through-your-payroll.

Software changes

The EPS for submissions relating to tax year 2020/2021 has been updated where relevant.

On the Online Services | Send Employer Payment Summary | EPS Values screen, the following new fields can be seen:

• SPBP Rec

• SPBP Comp

As with SMP Comp, if Company | Alter Company Options | Company | Small Employer Relief is not selected, the SPBP Comp field will be disabled.

Applies to

EPS Sent to HMRC.

Effective

From 6 April 2020.

More information

www.gov.uk

Software changes

These new details will be included in the Full Payment Submission (FPS) in the 2020-21 tax year where relevant including:

• Off-Payroll Worker settings

• Class 1A NICS for Termination/Sporting Testimonial payments

• Statutory Parental Bereavement Pay

• Zero Emission Mileage Car Benefit

Any employees that are included in the FPS, but not paid in the period, will be included in the Year To Date values on the FPS Confirmation screen, FPS Print Summary screen and FPS Print Details screen.

Applies to

FPS sent to HMRC for each pay period.

Effective

From 6 April 2020.

More information

www.gov.uk

For amendments to data for the 2019-20 tax year onwards, HMRC has removed the restriction of the 19th April, allowing you to submit an FPS to update their records.

• An EYU will still be required if you are amending data for the 2018-19 tax year and before.

• An EYU or FPS can be used if you are amending data for the 2019-20 tax year. However, you must choose only one method for reporting amendments for the whole of the tax year.

• An FPS must be used if you are amending data for the 2020-21 tax year. You will not be able to use an EYU.

The EYU has been updated to include Welsh Tax Regime & Postgraduate Loan details.

Software changes

The EYU screen has been updated to allow Postgraduate Loan details to be entered.

Applies to

EYU sent to HMRC for each pay period.

Effective

From 6 April 2020.

More information

www.gov.uk

Before 6 April 2020, the termination awards and sporting testimonials were subject to different rules for Income Tax and National Insurance contributions.

From 6 April 2020, the rules are more closely aligned.

• Termination payments over a £30,000 threshold, which have not already incurred a Class 1 NICs liability, are subject to Class 1A Employers NICs.

• Sporting testimonials over a £100,000 threshold, which have not already incurred a Class 1 NICs liability, are also subject to Class 1A Employers NICs.

Before 6 April 2020

From 6 April 2020

*The Class 1A NIC charge is 13.8%.

Software changes

System Parameters

The Termination payment and Sporting Testimonial thresholds for tax and NI have been added to the system parameters. The thresholds for 2020/2021 are:

• Termination Payments  £30,000

• Sporting Testimonials £100,000

Payments & Deductions

Under Company | Alter Payments / Deductions, you can find two new categories for Sporting Testimonial and Termination. Create and use the Category of Termination, or Sporting Testimonial to make sure that tax and NI are calculated correctly on the amounts above the threshold.

Employee Details

On the Employee Details | To Date tab, the new fields Termination and Sporting Test can be found in a new frame called Termination Pay. A new field has also been added for Class 1A.

The fields under the Termination Pay frame are not year to-date fields. They are the value of Termination Pay/Sporting Testimonial for the employee, which could include payments from a previous year.  These payments can be entered manually; however, they will usually be updated during payroll run after which they cannot be amended manually.

Alter To-date Totals

The fields are only enabled if the to date value is greater than zero, or if Employee Details | Pay/Ded contains a Payment/Deduction of category Termination or Sporting Testimonial i.e. the payment/deduction appears on the Pay/Deds tab when editing the employee.

Applies to

Employers paying termination awards or sporting testimonials.

Effective

From 6 April 2020.

More information

The rules for off-payroll working in the private sector (IR35) change on 6 April 2020.These rules changes affect the following:

• workers who provide services through an intermediary

• clients who receive services from a worker through their intermediary

• agencies that provide workers services through an intermediary.

Before 6 April 2020, public sector clients must decide their off-payroll workers' status and inform them of the decision. The public authority is required to deduct relevant Income Tax and NI before making payments to workers. Private sector employers should leave that decision to the off-payroll workers' intermediary.

From 6 April 2020, as well as public sector clients, private medium and large sized employers must also decide their off-payroll workers' status. And so both public authorities and medium and large sized employers are required to deduct relevant Income Tax and NI before making payments to workers.

Small companies however can still leave that decision to the off-payroll workers' intermediary.

Small incorporated companies meet two of these criteria:

• fewer than 50 employees

• annual turnover of less than £10.2m

• balance sheet assets below £5.1m.

Small unincorporated companies must have an annual turnover of less than £10.2m.

Deemed direct payment

The portion of the fee subject to tax and NI is referred to as the 'deemed direct payment'. The deemed direct payment is calculated as the value of the payment to a worker's intermediary:

• less any VAT

• less the direct cost of materials used in providing the service

• less expenses that would also be deductible from taxable earnings if the worker was an employee.

Deemed direct payments for off-payroll workers must be included in the calculation of the Apprenticeship Levy.

Software changes

Two new tick boxes have been added on the Employee | Alter Current Employee | Period screen; Off-payroll Worker and Worker Pays ER’s NI.  This is to cater for the Off-payroll Worker changes and enables you to identify an individual as an Off-payroll Worker.  

The Worker Pays ER’s NI option is only for use when a worker pays the ER’s NI, deducted from their invoice.

With Off-payroll Worker selected, the individual will be set as Exclude from Auto Enrolment. If there are automatic enrolment details, they will need to be removed for the individual.  If the employee has values in Student Loan/Postgraduate Loan fields, these must be cleared prior to saving, along with any Statutory Payment details. If any of this information is present in the employee record, a warning message will be displayed accordingly. Off-payroll Workers are not your employees and as such, they do not need to be auto enrolled and any entitlement to statutory payments come from their primary employment.  Student Loans are also not processed through your payroll.

Employment Allowance

Off-payroll Workers’ NI Liability cannot be offset against employment allowance. For instance:

• Company has 10 workers who are all off-payroll workers.  The NI liability is £3,500.  Employment Allowance claimed would be zero

• Company has 10 workers where 5 are off-payroll workers and 5 are employees.  The NI liability is £3,500 - £2,000 from off-payroll workers and £1,500 from employees.  The Employment Allowance in this instance would be £1,500.

Applies to

It is the responsibility of the client/employer to determine whether any of their workers are affected by the new rules for off-payroll working.

Effective

From 6 April 2020.

More information

For details of the changes to off-payroll working for clients from April 2020: www.gov.uk/guidance/april-2020-changes-to-off-payroll-working-for-clients.

To understand off-payroll working (IR35): www.gov.uk/guidance/understanding-off-payroll-working-ir35.

To check employment status for tax: www.gov.uk/guidance/check-employment-status-for-tax.

The Statutory Parental Bereavement Pay and Leave (SPBP) allowance and leave entitlement for primary carers who have lost a child is being introduced from 6 April 2020. Primary carers include parents, adopters, foster parents and guardians.

The payment follows the same administration process as other statutory payments such as paternity pay. Payments will be paid out by employers and claimed back through payroll processes.

Payments will be treated as earnings for tax and National Insurance Contributions purposes, as per all other Statutory Payments.

Primary carers are entitled to two weeks leave following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy. The leave is paid at the statutory rate if the employees has 26 weeks continuous service. Employees with less than 26 weeks continuous service can request two weeks unpaid leave.

Software changes

SPBP Calculation

Under Employee | Statutory Payments, a new SPBP tab has been added to allow SPBP calculation.  

At the top of the screen, the section SPBP Periods shows any periods that already exist for an employee.

Using the SPBP fields you can:

• Pay 2 SPBP weeks together

• Pay 1week SPBP now and 1 week in the future

• Transfer an employee to Payroll where 1 week has already been paid and 1 week is still to be paid

Applies to

All employers.

Effective

From 6 April 2020.

More information

For details about Statutory Parental Bereavement Pay, visit www.gov.uk/government/news/uk-first-parents-who-lose-a-child-entitled-to-bereavement-leave.

Software changes

Postgraduate Loan boxes have been added to the P60 report designs

Applies to

All employers.

Effective

April 2020

More information

Visit http://www.hmrc.gov.uk/gds/payerti/forms-updates/forms-publications/onlineorder.htm.

Update Teachers’ Pension Guide

Changes for Teachers’ pensions.

Legislation & product changes guide

This Legislation & product changes guide is in PDF format, and in HTML format so that it can be read in your web browser.

Installation guide

This PDF guide helps with installation of Capital Gold Payroll.

Checklists guide

This PDF guide describes the steps necessary to upgrade to Capital Gold Payroll (4.07.00), and then complete the payroll year-end and start the new tax year.

Auto Enrolment guide

This guide provides information on how Capital Gold Payroll can help you carry out Auto Enrolment responsibilities. It covers how your payroll software can help you with Automatic Enrolment, pension funds, and pension deductions.

Auto Enrolment Configuration Tool guide

This guide explains how to use the Auto Enrolment Configuration Tool in Capital Gold Payroll.

Rates and Bands guide

This guide explains the new rates and bands for NI, PAYE and Statutory Payments for the new tax year.