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12199: Overview of PAYE changes for 2019-20

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Article ID 12199
Article Name Overview of PAYE changes for 2019-20
Created Date 28 Feb 2019 00:00:00
Product IRIS PAYE-Master, IRIS Payroll Business, IRIS Bureau Payroll, IRIS GP Payroll, IRIS Payroll Professional, Earnie, Earnie IQ, P11D, IRIS Bookkeeping, IRIS HR Manager, IRIS GP Accounts
Codes: GGLEARNIE GGLENIEIQ GGLBKKP GGLBURPAY GGLGPACCS GGLGPPAYROLL GGLHRM GGLPAYEMST GGLPAYBUS GGLPAYPRO GGLPELEVD
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A brief summary of some of the PAYE changes being made in the 2019/2020 tax year.


For a printable guide to the PAYE legislation changes for 19/20 click here.


For a quick reference factcard of PAYE rates and thresholds for 19/20 click here.

Resolution

Introduction of Welsh tax codes


From April 2019, the National Assembly for Wales will be able to vary the rates of income tax paid by Welsh taxpayers. HMRC will collect the tax as normal.


The Welsh Rate of Income Tax applies for the full tax year and is based on the employee’s main place of residence. A Welsh taxpayer is someone who is resident in the UK for tax purposes and:


• Has their main place of residence in Wales for the greater part of the tax year, or (if they cannot identify a main place of residence)
• Spends more days in Wales than in the rest of the UK in the tax year, or
• Is a Welsh Parliamentarian


HMRC will identify Welsh taxpayers with a Welsh Tax Regime indicator; a tax code with a prefix letter ‘C.’


• New starters will default to a ‘rest of the UK’ tax code when no P45 is supplied
• There will be no specific Welsh emergency tax code
• There is no Welsh equivalent of tax code NT


Postgraduate Student Loan


From April 2019, Postgraduate Loans (PGL) are due for repayment via PAYE. The repayment threshold is set at £21,000 with repayments at a rate of 6%. The deductions will be based on NIable gross pay and rounding rules will follow that of existing Student Loans.


A borrower could be liable to repay a Student Loan and Postgraduate Loan concurrently, as they are separate loan products. This means that, where applicable, employers must deduct both Postgraduate and Student Loan deductions.


Year to Date Amendments for Earlier Tax Year Payroll Data


Previously, when you identified an inaccuracy in payroll data after the end of the Tax Year, and you did not correct it before the 19 April, HMRC required you to submit an Earlier Year Update (EYU).


From April 2019, HMRC will allow you to report revised Year to Date (YTD) information via the Full Payment Submission (FPS). You can do this after the current deadline of the 19th April following the end of the Tax Year, effectively removing that deadline.


• For 2018/2019, you can submit amendments to the Tax Year via EYU or FPS with no 19th April deadline
• From 20 April 2020, amendments to the 2019/2020 Tax Year (and future years) should be made by FPS
• Amendments to Tax Years 2017/2018 and earlier should be made by EYU

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