Final Payment Submissions to HMRC

D55F3A85-4C8C-4000-8482-9D1DEE8C5C44It’s time to prepare for making your last Full Payment Submission or Employer Payment Summary of the year

Your last Full Payment Submission (FPS) or Employer Payment Summary (EPS) of the year (up to and including 5 April 2022) needs to include an indicator that you are making the final submission. This tells us you have sent us everything you expected to send and we can finalise our records for you and your employees.

Some commercial payroll software will not let you put the indicator on an FPS. If that’s the case, send your last FPS and then send an EPS with the indicator ticked. You can also send an EPS with the indicator ticked if you forgot to put the indicator on your last FPS submission for the tax year.

You also need to prepare to give your employees a P60 if they are in your employment on 5 April 2022. You have got until 31 May 2022 to do this.

If you are not going to pay anyone again this tax year, remember to send an EPS with the indicator ticked to show you did not pay anyone in the final pay period and it is the final submission. You have until 19 April 2022 to do this, but you will get a message from the Generic Notification Service if you file it after 11 April 2022.

Student and postgraduate loans: updated thresholds and rates from 6 April 2022

The student and postgraduate loans thresholds and rates are as follows:

Plan 1 ― £20,195

Plan 2 ― £27,295

Plan 4 ― £25,375

Postgraduate loan ― £21,000

Deductions for:

  • plans 1, 2 and 4 remain at 9% for any earnings above the respective thresholds
  • postgraduate loans remain at 6% for any earnings above the respective thresholds

Gift Aid Declarations

33E713CC-CCCF-4814-B5DB-A033FAEAC0AAA Gift Aid declaration allows charities and community amateur sports clubs (CASCs) to claim tax back on eligible donations.

It’s important that you keep records of declarations and Gift Aid payments.

If you make a Gift Aid claim without collecting a declaration from the donor, HMRC may ask you to repay the equivalent amount in tax.

Declaration formats

A declaration by a donor can be made in writing, verbally or online. Whichever format you use, donors must provide the required information for your Gift Aid claim to be valid.

HMRC template declarations

HMRC provides free template declaration forms for you to use. You don’t have to use a template, but if you do, you can be sure that declarations will meet HMRC’s requirements.

You can include additional information to suit your charity or CASC’s needs, eg reference numbers.

What declarations must include

There is no set design for a declaration form or a verbal declaration, but it must include:

  • the name of your charity or CASC
  • the donor’s full name
  • the donor’s home address
  • whether the declaration covers past, present or future donations or just a single donation
  • a statement that the donor wants Gift Aid to apply (this could be a tick box on a written or online declaration)
  • an explanation that the donor needs to pay the same amount or more of UK Income Tax and/or Capital Gains Tax as all charities and CASCs will claim on the donor’s gifts in a tax year and that the donor is responsible to pay any difference   

For more detailed information click here

The 6 Main Duties of Trustees

7CF0F4E4-98CB-4DC0-A5EF-6A1ABE6BCA14Trustees have overall control of a charity and are responsible for making sure it’s doing what it was set up to do. Their main duties are:

1. Ensure your charity is carrying out its purposes for the public benefit

You and your co-trustees must make sure that the charity is carrying out the purposes for which it is set up, and no other purpose.

2. Comply with your charity’s governing document and the law

You and your co-trustees must:

  • make sure that the charity complies with its governing document
  • comply with charity law requirements and other laws that apply to your charity

3. Act in your charity’s best interests

You must:

  • do what you and your co-trustees (and no one else) decide will best enable the charity to carry out its purposes
  • with your co-trustees, make balanced and adequately informed decisions, thinking about the long term as well as the short term
  • avoid putting yourself in a position where your duty to your charity conflicts with your personal interests or loyalty to any other person or body
  • not receive any benefit from the charity unless it’s properly authorised and is clearly in the charity’s interests; this also includes anyone who is financially connected to you, such as a partner, dependent child or business partner

4. Manage your charity’s resources responsibly

You must act responsibly, reasonably and honestly. This is sometimes called the duty of prudence. Prudence is about exercising sound judgement.

5. Act with reasonable care and skill

As someone responsible for governing a charity, you:

  • must use reasonable care and skill, making use of your skills and experience and taking appropriate advice when necessary
  • should give enough time, thought and energy to your role, for example by preparing for, attending and actively participating in all trustees’ meetings

6. Ensure your charity is accountable

You and your co-trustees must comply with statutory accounting and reporting requirements.

Find out more here

Prepare for the Health and Social Care Levy

D55F3A85-4C8C-4000-8482-9D1DEE8C5C44Your National Insurance contributions might increase when the Health and Social Care Levy comes into effect in the UK (England, Scotland, Wales and Northern Ireland) on 6 April 2022.

For tax year 6 April 2022 to 5 April 2023

Employer Class 1, employee Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions will increase, for one year, by 1.25 percentage points.

From 6 April 2023

The National Insurance contribution rates will go back down to 2021 to 2022 levels, and the levy will become a separate new tax of 1.25%.

How the levy will affect you

Between 6 April 2022 and 5 April 2023

If you are an employer, employee or self-employed (and below the State Pension age), you will pay the 1.25 percentage points increase in National Insurance contributions.

From 6 April 2023

The separate levy of 1.25% will apply to the same amounts for the following classes of National Insurance contributions:

  • Class 1 that are above the primary and secondary thresholds
  • Class 1A and Class 1B for employers
  • Class 4 for the self-employed

If you’re an employer

If your business pays Class 1, Class 1A or Class 1B National Insurance contributions, you’ll need to start paying the 1.25 percentage points increase in contributions from 6 April 2022. You’ll then need to pay the separate 1.25% levy from 6 April 2023.

You may also have to pay the separate levy from 6 April 2023 for employees who are over State Pension age.

HMRC is asking employers, where appropriate, to include the following message on payslips:

1.25% uplift in NICs, funds NHS, health & social care

Find out more details here