Other news in brief

Under the previous Government, HMRC announced an expansion to the detailed information that would be required on payroll RTI (real time information) submissions, including hours worked. A consultation on draft legislation to introduce these changes from April 2025, alongside changes to information to be provided with self-assessment returns, was published earlier this year. However, on 19 August 2024, the Chartered Institute of Taxation (CIOT) announced that HMRC had informed it that the RTI changes had been deferred. The CIOT announcement states that “HMRC recognise that, due to the delays owing to the General Election, there is now insufficient lead-in time for businesses, employers, and software providers to prepare for implementation in time for an April 2025 change. Therefore, employers will not be required to start providing more detailed employees’ hours data through PAYE Real Time Information returns from April 2025. This requirement will not apply until April 2026 at the earliest.” However, it went on to say that the “expected implementation date of April 2025 for changes to self-assessment returns – i.e. start and end dates of self-employment and dividends paid to company owner-managers - is considered achievable” and that “whether and when to proceed with implementing the regulations remains subject to decisions by the new Government”.

On 16 August 2024, the FTT found in favour of HMRC in a case which considered the liability to secondary class 1 national insurance contributions (NIC) for UK resident employees, working on an oil platform on the UK continental shelf (UKCS) but legally employed by an employer which was neither resident, present nor had a place of business in the UK. The legal employer (a Guernsey company) entered into a contract with a UK company (in the same Group) to provide labour, scaffold and equipment to that UK company. The case centred on whether the UK company should be regarded as the ‘host employer’ in accordance with paragraph 9 of schedule 3 of the Social Security (Categorisation of Earners) Regulations 1978 (as in effect during the period covered by the case and amended with effect from 2014). The FTT found that the UK company was the host employer (and secondary contributor) on the basis that the ‘personal service’ of the employees was ‘made available’ to the UK company and rendered for the purposes of its business. In reaching this conclusion the FTT found that:

• The contract in place between the Guernsey employer and the UK company (and payment terms therein) pointed to there being provision of ‘personal service’; and
• For personal service to be ‘made available’ some degree of direction must come from the person to whom the service is made available. The chain of command between the UK company and senior offshore employees of the Guernsey employer, was sufficient to meet this requirement. 

It is not yet known whether the case will be appealed by the UK company but, in any event, it is likely to be primarily of historical application but will also be of interest to companies who use the services of employees of non-UK employers whilst working on the UKCS.

The newly elected Labour Government in the UK has ushered in a bold agenda focused on ‘making work pay’. This ambitious initiative entails a comprehensive overhaul of employment law and tax regulations, aiming to create a fairer and more equitable working environment for all. We mention our forthcoming webinar elsewhere in this edition but readers may also be interested in our new hub page, which we recommend you bookmark to keep up to date on the employment law and tax implications as things develop. On this page, in the first of our ‘Making Work Pay’ video series, David Cummings, Partner, KPMG Law, and Eloise Knapton, Head of Employer Reward Services, explore these changes from both a legal and tax perspective, to help you understand their potential impact on your business and to prepare for the future.

Now the economy appears to be picking up, companies can focus on attracting and then retaining the best talent with thoughtful strategic benefit schemes. Manish Godhwani of KPMG in the UK discusses this further and outlines ways employers can optimise their benefits offerings in a recent article published by the Reward and Employee Benefit Association (REBA).

With the rapid advance of artificial intelligence (AI) and the increasing automation of routine tasks and processes, the type of skills required by organisations is rapidly changing. With increasing demand for certain skills such as AI and data analytics, we see very significant corresponding pay premiums. Scott Cullen and Suzie Zhu of KPMG in the UK consider whether employers need to start paying for skills going forward in a recent article published by REBA.