Year-end employer compliance obligations

Following the end of the 2023/24 UK tax year, there are several key reporting deadlines which employers should be aware of. The end of the tax year is the ideal time not only to review the year just gone, but also to plan your approach to future developments. So, what are the areas your employment tax and payroll teams need to be focusing on? 

The deadline for filing the 2023/24 Employment Related Securities (ERS) annual returns is less than three months away. Employers should prioritise now to ensure there’s sufficient time to prepare and file accurate returns by 6 July 2024. 

Multinational businesses will need to factor into yearend compliance the wider global mobility population. Our multidisciplinary team can support you to ensure that the relevant items are identified and reported. For example, impact on share awards, Forms P11D, Short Term Business Visitors and Appendix 5 reporting. 

PSA reporting can be a complex and time-consuming process involving analysis of data compiled from multiple sources. It is important that businesses consider the wider picture and identify all relevant expenditure that has been incurred. KPMG supports a wide range of clients in navigating and analysing their data to prepare reliable annual PSA calculations accurately and efficiently, applying relevant tax exemptions and practical solutions. 

As we move into a new tax year, it is important to think about how the data you collect and curate, and your processes, controls and governance for working with it, might need to adapt to meet foreseeable demands in the years ahead. There are also specific issues to prepare for that could impact your employee reward, employment tax and payroll strategies and operations. 

On 6 April 2024, a number of changes came into effect including the reduction in employee’s National Insurance Contributions (NIC), the new Off-Payroll Working offset rules and changes to the Construction Industry Scheme (CIS) treatment of certain payments. As well as finalising your systems for these changes, it’s important to plan testing to confirm how they’re performing after an initial period and how any learnings will be actioned. 

For 2025/26 and subsequent years employers will be required to report additional information through the payroll system on employees’ hours worked and, in certain circumstances, descriptions of the payments made. The additional information is intended to support HMRC’s enforcement activities, as well as the Government’s policy agenda. Employers should consider what these changes will mean for their payroll/ HR systems and processes, and work through what steps they might need to take to prepare for their new reporting obligations from 6 April 2025. 

Also from 2025/26, the current remittance basis of taxation for non-domiciled individuals is expected to be replaced by a residence-based regime. This is relevant to employers with internationally mobile employees, who should consider its impact on secondment policies and costings (including changes to Overseas Workday Relief eligibility). 

Taxable benefits and expenses received in the 2023/24 tax year must be reported to HMRC on Forms P11D and P11D(b) by 6 July 2024. From the 6 April 2026, the Government announced that payrolling benefits in kind will become mandatory. Draft legislation will be published later this year for consultation as part of the tax legislation cycle and employers would be advised to consider what mandatory payrolling might mean for their systems and processes well in advance of its introduction.