The Income Tax (Pay As You Earn) (Amendment) Regulations, SI 2024/305, simplify the reporting process for employers in respect of a salary advance made to an employee, so that salary advance can be reported on or before the employee’s contractual pay day, thus avoiding having to report the advance and the regular salary payment separately. In essence, the reporting of the advance will be delayed until the remainder of the salary instalment is paid. The change applies from 6 April 2024.
Following consultation on a draft version of the regulations, HMRC have made an amendment to make sure that the change only applies to advances of pay already earned by the time the advance payment is made.
The CIOT has previously raised concerns around how delaying the reporting of advance payments could be seen as condoning the use of third-party providers who arrange salary advances in return for a fee. In the explanatory notes to the SI, HMRC say that ‘Arrangements for making advances are matters between the employer and the employee, falling outside the remit of HMRC’ and ‘On the question of third parties, the reporting obligation will fall on the employer where a third-party scheme provider is acting on the employer's behalf.’
The Social Security (Contributions) (Amendment No 3) Regulations, SI 2024/306, provide equivalent provisions for NICs purposes.
The Income Tax (Pay As You Earn) (Amendment) Regulations, SI 2024/305, simplify the reporting process for employers in respect of a salary advance made to an employee, so that salary advance can be reported on or before the employee’s contractual pay day, thus avoiding having to report the advance and the regular salary payment separately. In essence, the reporting of the advance will be delayed until the remainder of the salary instalment is paid. The change applies from 6 April 2024.
Following consultation on a draft version of the regulations, HMRC have made an amendment to make sure that the change only applies to advances of pay already earned by the time the advance payment is made.
The CIOT has previously raised concerns around how delaying the reporting of advance payments could be seen as condoning the use of third-party providers who arrange salary advances in return for a fee. In the explanatory notes to the SI, HMRC say that ‘Arrangements for making advances are matters between the employer and the employee, falling outside the remit of HMRC’ and ‘On the question of third parties, the reporting obligation will fall on the employer where a third-party scheme provider is acting on the employer's behalf.’
The Social Security (Contributions) (Amendment No 3) Regulations, SI 2024/306, provide equivalent provisions for NICs purposes.
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