Insights

The P45 is an important document as it is the way in which pay and deduction details are transferred from one employer to the next.

In the 2020 Budget, the Chancellor announced that the allowance would be increased to £4,000 for 2020/21, but this is not given automatically: it must be claimed.

HMRC has made available their online Check Employment Status for Tax (CEST) tool, which can be used to determine the status of a worker for IR35 purposes.

Starting in April 2020, some private businesses will be required to operate under the same rules as public sector companies for what concern IR35 regulations.

From April 6 2019, the employer minimum contribution has risen from 2% to 3%, while the staff contribution also increased from 3% to 5%.

To set up a new PSA, it is necessary to write to HMRC setting out the benefits and expenses to be included within the PSA. Once HMRC have agreed the PSA, they will send two draft copies of form P626.

Since 6 April 2016 employers can provide trivial benefits such as small gifts and entertainment without having to include these within PAYE settlement agreements or disclose on P11D forms.

Employees may be able to obtain a tax relief on expenses that are not covered by their employer, when these are incurred "wholly, exclusively and necessarily in the performance of the duties of the employment."

Employers are allowed tax breaks and exemptions to offer health and fitness at work, in order to prevent work-related illness and injuries.

Pension contributions can be a tax efficient way of increasing pay packages of your employees. With generous reliefs from the government they are a win-win.