IR35 – deemed payments – how to include in RTI to HMRC

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Guidance and advice on the Intermediaries legislation (known as IR35) is beyond the scope of Moneysoft support and you should use the relevant HMRC guidance to determine how this legislation affects you. Links to the relevant pages of HMRC web site are given below. If having consulted the HMRC guidance you have established a need to record a ‘deemed payment’ in Payroll Manager then please follow the steps below. Note: In some circumstances the payment will be treated as ‘Taxable’ and ‘NICable’, in other circumstances the payment may not be subject to tax and NIC. Again, Moneysoft is NOT able to offer support on the tax treatment of specific payments and you should consult HMRC to determine the answer.

IR35: working through an intermediary

Off-payroll working in the public sector: reform of the intermediaries legislation – information for agents

 

A: To enter a payment that IS subject to tax & NIC

In order to do this you need to create a new column on the ‘Additions’ section of the ‘Pay Details’ screen, as below:

  • Select the relevant employee on the ‘Pay Details‘ and click on the ‘Additions‘ tab.
  • Click on any one of the blue ‘Spanner’ symbols that appear in the column headings.
  • Spanner
  • Tick the next available ‘Used‘ box, then enter a suitable description of your choice (e.g. ‘Deemed Payment’)
  • taxable
  • Tick the boxes marked ‘Taxable‘ and ‘NIC-able‘. Un-tick the ‘Pensionable‘ box, then click ‘OK
  • payment
  • Enter the amount of the payment into the column that you have just created.

The deemed payment amount will be included in the FPS for that pay period.

 

B: To enter a payment that IS NOT subject to tax & NIC

In order to do this you need to create a new column on the ‘Additions’ section of the ‘Pay Details’ screen, as below:

  • Select the relevant employee on the ‘Pay Details‘ and click on the ‘Additions‘ tab.
  • Click on any one of the blue ‘Spanner’ symbols that appear in the column headings.
  • Spanner
  • Tick the next available ‘Used‘ box, then enter a suitable description of your choice (e.g. ‘Deemed Payment’)
  • non-taxable
  • Un-tick the boxes marked ‘Taxable‘ and ‘NIC-able‘ and ‘Pensionable‘, then click ‘OK
  • payment
  • Enter the amount of the payment into the column that you have just created.

The deemed payment amount will be included in the FPS for that pay period.

Non-taxable and non-NICable payments are reported to HMRC using ‘data field 58A’ of the FPS, as per HMRC GuidanceĀ Off-payroll working in the public sector: reform of the intermediaries legislation – information for agents

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