This guide will help you complete this task when using Basic PAYE Tools (BPT). It contain examples of the screens you will see in BPT and simple to follow instructions.

The National Insurance contributions (NICs) holiday applied to new businesses, in specific locations, that started during the period 22 June 2010 to 5 September 2013. Subject to meeting certain conditions, eligible businesses were able to claim up to £5,000 as a deduction from the employer NICs due for each of the first 10 employees they employed during the holiday period.

Who can apply

Types of business

New businesses that could apply are:

• sole trader, company or partnership that begins to carry on a trade, profession or vocation
• property or investment businesses
• trading charities – whether profit or non profit making

Managed service companies don’t qualify for the holiday. Where an IR35 company met the qualifying criteria, it would:

• have been eligible for holiday on the salary or wage payments they make
• not have been eligible for the holiday on income deemed to be earnings or employment resulting from the IR35 rules

Businesses not considered to be new

Your business wasn’t considered to be new if:

• in the 6 months before the start of the business, you carried on another business and the new business consists, or mostly consists, of the activities of the other business
• you began a business as a result of a transfer of another business and the activities, or most of the activities were carried on in the other business
• before the business started, you agreed to take on part of an existing business at some point during the period of the NICs holiday
• you expanded your business, or set up a new or subsidiary business, alongside an existing one, unless the new business was wholly or mainly different from the existing business
• you were self employed and your business became incorporated, that is became a limited company, unless the activity, or most of the activity is different from the first business
• your businesses were associated businesses and one of the businesses existed before 22 June 2010

Business locations

You could only apply for the NICs holiday if your principal place of business was located within the following areas of the UK at the time your business started:

• Northern Ireland
• Scotland
• Wales
• Regions in England
  • East Midlands
  • North east
  • North west
  • South west
  • West Midlands
  • Yorkshire and Humber

You must be able to demonstrate that your principal place of business was within an included region.

If your business didn’t have an obvious principal place of business, for example if it was internet based or it involved driving from one job to the next, the place where you kept your equipment, retained your business records or carried out the administration of your business, will be considered to have been your principal place of business.

If your business had more than one place of business, your principal place of business was where you carried out the greater part of your business, or if your business was split equally and one place qualified and the other didn’t, the location you used for administration, will have been considered your principal place of business.

If your principal place of business was outside the UK in another EU country, please contact HM Revenue and Customs (HMRC’s) New Employer Helpline.

If you qualified for the holiday and the principal place in which you conducted your business relocated to:

• another of the included countries or regions, your claim could continue
• an excluded region, your eligibility ends at the time that you relocated (on earnings due to be paid on or after relocation)

If you didn’t qualify because your principal place of business was in an excluded region, but you later moved to an included region, you aren’t eligible to claim.

Businesses and state aid

The employer NICs holiday is considered to be a de minimis state aid and those applying to benefit from this scheme are required to comply with certain European Commission regulations.

To come within the state aid de minimis rules, the total aid received by your business must not exceed €200,000 over a continuous period of 3 years.

If your business has:

• had state aid other than de minimis state aid, this must also be included in the limit of €200,000 – if you’ve exceeded this limit you won’t qualify for the NICs holiday
• already had de minimis state aid and the maximum amount of NICs holiday you could benefit from (£50,000) would take you over the state aid limit your business won’t qualify for the NICs holiday

If you realise after making a retrospective claim that you’ve already had state aid and the maximum aid offered to you through the holiday takes you over the limit for your particular business sector, then you must contact HMRC to arrange to pay back any state aid you’ve had as part of the NICs holiday in its entirety – not just the amount of state aid that took you over the limit.

Your business mustn’t have been in one of the following excluded sectors:

• coal sector
• road freight transport sector – where the aid is to be used to acquire road freight transport vehicles
• those involved in export-related activities

Some businesses are entitled to reduced amounts of state aid so you must consider these lower limits when deciding whether you’re eligible to make a late claim:

• road transport – €100,000
• agriculture – €7,500
• fisheries and aquaculture – €30,000

This means new businesses in these sectors may have qualified for de minimis state aid, but weren’t entitled to claim the full £50,000 limit available under the NICs holiday scheme.

If your business falls within the agriculture or fisheries and aquaculture sectors and you’ve had any form of state aid during the 3 previous financial years you won’t qualify for NICs holiday.

Businesses within the agriculture sector won’t be entitled to claim the NICs holiday if:

• they are businesses active in the primary production of agricultural products as listed in Annex 1 to the Treaty establishing a Constitution for Europe (PDF 364KB)
• they are businesses active in the processing and marketing of agricultural products as listed in Annex 1 to the Treaty, in the following cases:
  • when the amount of the aid is fixed on the basis of the price or quantity of products purchased from primary producers or put on the market by the undertakings concerned
  • when the aid is conditional on being partly or entirely passed on to primary producers
  • aid was contingent upon the use of domestic goods over imported goods

There are financial limits to the amount of state aid any business can receive. To be eligible to receive further state aid – and so potentially be able to apply for the NICs holiday – the amount of state aid already received has to be taken into consideration with these limits in mind.

Anti-avoidance rules

NICs holiday won’t be allowed where activities which might have been part of another business are carried out in a new business purely in order to qualify.

How to apply

If you’re satisfied that your business qualified for the NICs holiday, please contact New Employer Helpline and request an application form.

The application form must be completed by one of the following:

• the sole owner of the business
• a partner of the business
• the company secretary or director
• the agent/accountant representing the business (where valid form 64-8 is held by HMRC)

HMRC will write to you and tell you the maximum amount of de minimis state aid you can receive under the scheme and the tax year(s) the aid relates to.

If your business is in one of the special sectors mentioned in Businesses and state aid, HMRC will provide you with additional information, to ensure that you can comply with the record keeping requirements under the State Aid Regulations.

You must retain the confirmation letter for 3 financial years. You will need it if you apply for any other form of state aid during that time.

Qualifying periods

The NICs holiday period for eligible businesses was as follows. For businesses that started:

• between 22 June 2010 and 6 September 2012 – the first 12 months after the date the business started
• after 6 September 2012 – from the date the business started, up to and including 5 September 2013

For the purpose of the NICs holiday, the date your business started will be treated as the earlier of the date:

• your business started to trade
• you hired your first employee

If exceptionally, your business started to trade on or after 22 June 2010, but you hired your first employee before that date, your business will be treated as having started on 22 June 2010.

During this time, your first 10 employees were potentially ‘qualifying employees’ and the holiday period for each qualifying employee was a maximum of 12 months from the date they were employed by you to 5 September 2013, when the scheme ended.

The maximum amount of employer NICs you can claim for each qualifying employee is £5,000, even if you paid more employer NICs than this for an employee during that employee’s holiday period.

As the scheme didn’t actually start until 6 September 2010, you can only claim for the employer NICs due on earnings that were:

• paid on or after 6 September 2010
• due to be paid on or before 5 September 2013

If you met the qualifying criteria, your first 10 employees will have included:

• any employee hired before 22 June 2010
• any employee taken on from 22 June 2010, no matter how much you paid them, even if they left your employment before the scheme started on 6 September 2010
• employees with more than one job with your business (they count as one employee from the limit of 10)
• family members if they were employed by your business
• directors (voted amounts qualify provided they were voted in the first year of employment)
• part-time and casual staff
• employees over pension age

If you employed more than 10 employees at the same time, you can chose which employees to count as the first 10.

If a qualifying employee left and was subsequently re-employed by you, the holiday period for that employee is calculated based on when the employee first started to work for your business. The employee counts only once towards your limit of 10.

Time limits for making a claim

A retrospective claim for the NICs Holiday can’t be made after the end of the period of 4 years, beginning with the day on which the last deduction could be made in respect of the qualifying employee.

As the scheme ended on 5 September 2013 the latest possible date that a claim can be made (provided a deduction was due for a qualifying employee on that date) would be 4 September 2017.

The time limit could be earlier depending on both when the business and qualifying employee started.

Examples

Date your business started	Date an employee started	Last date for making the deduction	Last date for making a claim
6 February 2011	6 February 2011	5 February 2012	4 February 2016
6 February 2012	30 April 2012	29 April 2013	28 April 2017
6 February 2013	4 March 2013	5 September 2013	4 September 2017

Calculating your claim

Using your payroll records, calculate the amount of employer NICs you’ve paid and are entitled to claim for each qualifying employee.

The scheme ended on 5 September 2013 and you can’t claim the NICs holiday for any wages or salary that were due to be paid after that date.

Examples

Employee is paid	Payment is due to be made	Answer
Weekly, one week in arrears	On 6 September 2013 for work done week ended 30 August 2013	NICs holiday can’t be claimed as payment was due to be made after 5 September 2013
Weekly on a Saturday	3 weeks wages on 31 August 2013 for that week and following 2 weeks as employer is going on holiday	NICS holiday is only due on the payments due to be paid before 5 September 2013 – the payment due on 31 August 2013, not those due on 7 September or 14 September
On Wednesday following receipt of time sheets due on previous Friday	4 September 2013, but the timesheets were late and employees had 2 weeks pay at the same time on 11 September 2013	NICs holiday can be claimed for the week’s pay of 4 September 2013, as it was due to be paid before 5 September 2013
On the last working day of each month	30 September 2013	NICs holiday can’t be claimed as you can’t split the payment and calculate NICs due for part of the month, as the pay was all due to be paid after 5 September 2013

If your employee was a member of a contracted-out occupational pension scheme, you can claim the amount that was due at the relevant contracted out rate, using the tables detailed below.

Contracted out NICs category	Equivalent not-contracted out NICs category
D (NICs table CA89) F (NICs table CA43)	A
E (NICs table CA39) G (NICs table CA43)	B
L (NICs table CA39) S (NICs table CA 43)	J

Directors and annual earnings review of NICs

A director of their own limited company who qualifies for the NICs holiday as a new business from 1 April 2013 has opted to pay NICs as an employee, rather than by the director’s method. The director has been paying himself £1,000 a month, every month since the end of April 2013. The easement of the rules for directors’ NICs is to allow directors to pay their NICs at regular intervals like other employees, but on the last payment in the tax year, they need to reassess the employee and employers NICs using the annual or pro-rata annual earnings period.

If appointed as a director at Companies House from the beginning of the tax year, the employer’s NICs are only due when their cumulative earnings exceed the annual Secondary Threshold (ST) of £7,696. If they have been paid £1,000 per month since April 2013 and their last payment before the scheme ends on 5 September 2013 will be at the end of August, the cumulative pay is £5,000 during the holiday period which is below the annual ST.

When earnings do go above the annual ST, the employer’s NICs holiday scheme will have ended. They will need to amend their records and calculate and pay over all of the employer NICs above the ST in accordance with the annual reconciliation requirement for directors.

For further advice, contact the Employer Helpline.

Completing your NICs holiday end-of-year return

To support your claim, you must submit a completed end-of-year return – forms E92 and E89 – for each tax year that you’re claiming for. These will be sent to you after we have acknowledged your claim.

You don’t have to complete weekly or monthly amounts of employer NICs paid on form E89, the yearly total is sufficient. You may however find it useful to complete the weekly and monthly amounts if your employee was a member of your contracted-out occupational pension scheme.

Form E89

You will be sent one paper form for each tax year that you’re claiming. You must complete all the boxes on the form – incomplete forms will be rejected.

You can print form E89 or photocopy the blank form if you’re claiming for more than one employee.

Form E92

Both sides of this form must be actioned:

• side 1 is information about your business and the amount of NICs holiday you’re claiming for the tax year
• side 2 provides information about what to do after you’ve completed the form

Reviewing your payment record

On receipt of your NICs holiday end-of-year return, HMRC will review your payment position for the relevant tax year, as your retrospective claim may mean that you’ve overpaid.

If you’ve overpaid employer NICs and you reported your payroll in real time for the years that you’re making your claim and have:

• not already submitted an Employer Payment Summary (EPS), you must submit one now showing the amount of NICs holiday for each year of your claim
• previously submitted an EPS, you must submit a further EPS showing the amount of NICs holiday for each year of your claim

You can check your payment position using PAYE Online.

Record keeping

You must retain:

• the acknowledgment letter from HMRC which tells you how much de minimis state aid you’ve been granted
• separate records for each qualifying employee which include:
  • employee name and National Insurance number
  • dates employee started their employment and their holiday period ended (this may be less than one year if the £5,000 limit is reached or when the scheme ended on 5 September 2013 whichever is sooner)
  • amount of holiday for each tax year
  • running total across all tax years, to ensure that the £5,000 limit isn’t exceeded

Records must be kept for no less than 3 years from the date on which the final holiday deduction could be made in respect of each qualifying employee. HMRC may inspect your records at any time to check that the scheme has been operated correctly.

Decisions and appeals

If HMRC decides that a business isn’t entitled to claim, the business can request a review of that decision and ultimately, formally appeal against the decision.

Any appeal will be against whether an employer is:

• or was entitled to make a deduction from their NICs payment and if so, how much they are entitled to deduct
• entitled to a refund and if so, the amount of the refund

This guide will help you complete this task when using Basic PAYE Tools (BPT). It contains examples of the screens you will see in BPT and simple to follow instructions.

As an employer running payroll, you should report your employee’s pay and deductions in a FPS on or before their payday (unless an exception applies).

You should also send an EPS by the 19th of the following tax month for HM Revenue and Customs (HMRC) to apply any reduction (for example, statutory pay) on what you’ll owe from your FPS.

If you’ve not paid any employees in a tax month, send an EPS instead of a FPS.

Employer information

Report these in every FPS and EPS.

Field	Description
HMRC office number	The first part of your employer PAYE reference (3 digits) – this is on the letter HMRC sent you when you registered as an employer. You can also find it on P6 or P9 coding notices
Employer PAYE reference	The second part of your employer PAYE reference (the letters and numbers after the slash)
Accounts Office reference	Format ‘123PA00012345’ – you’ll get this from HMRC after you’ve registered as an employer. It’s also on letter P30B if you pay electronically, or payment booklet P30BC if you don’t
Related tax year	The Income Tax year that this report relates to

Include these if they apply to your business.

Field	Description
Employer’s Contracted Out Number (ECON)	Get this from your contracting-out certificate or pension scheme administrator
SA UTR	Your Unique Taxpayer Reference (UTR) for Self Assessment (SA) if you’re a sole trader, or the partnership UTR if you’re a partnership
COTAX reference	Your Corporation Tax reference, if you’re a limited company. If you have more than one, enter the reference for the company responsible for employment contracts

Employee information

Report this information in a FPS every time you pay an employee.

Field	Description
National Insurance number	The employee’s National Insurance number. Leave blank if you don’t know it, but make sure you enter their address
Title
Surname or family name
Forename or given name
Second forename or given name
Initials	Only needed if you don’t know their full forename(s)
Date of birth
Gender
Address	Enter their address if they’re a new employee, you don’t know their National Insurance number or the employee’s address has changed
UK postcode
Foreign country	Only enter their country of residence if they live outside the UK, Channel Islands or Isle of Man. Also complete the ‘Address’ field
Payroll ID	You can assign payroll IDs to your employees. The ID must be unique. Use a different one if you re-employ someone (if you do this within the same tax year restart their year-to-date information from ‘£0.00’) or have an employee who has more than one job in the same PAYE scheme. If you reuse a previous payroll ID you’ll create a duplicate record and report payroll incorrectly
Payroll ID changed indicator	Only set the payroll ID changed indicator when reporting payroll ID changes and ensure both the ‘OLD’ and ‘NEW’ payroll ID is entered. You should not include the original start date. Don’t put ‘Yes’ if you used a different payroll ID when you re-employed someone who left in the same tax year
Old payroll ID for this employment	Only enter their old ID if it’s changed since your last FPS. You mustn’t complete this if you are re-employing someone. If you don’t supply it, and they have more than one job in your PAYE scheme, your PAYE bill may be calculated incorrectly
Irregular payment pattern indicator	Only put ‘Yes’ if the employee isn’t being paid regularly (for example, they’re a casual employee or on long-term sick leave) or if you’re not going to pay them for 3 months or more

Pay and deductions

Report information about each employee’s pay and deductions in a FPS.

Pay and deductions made this period

Field	Description
Taxable pay	The total pay to the employee that is taxable (even if tax is not due) in this period, including any benefits in kind which you have taxed via the payroll
Tax deducted or refunded
Student Loan deductions recovered
Pay after statutory deductions	Their net pay after you’ve deducted tax, National Insurance contributions (NICs) and Student Loan repayments. Don’t include payments you’re including in ‘Non-tax or NIC payment’
Deductions from net pay	Any other deductions you’ve taken for example, child maintenance payments (don’t include tax, NICs and Student Loan repayments)
On strike	Only put ‘Yes’ if you reduced your employee’s pay because they were on strike
Non-tax or NIC payment	Any payment made to the employee that is not subject to PAYE tax or NICs that has been sent with the ‘salary’ payment for this period

Year to date totals

Field name	Description
Taxable pay to date	The total taxable pay to date in this employment only, including any benefits that have been taxed through the payroll, including this payment
Total tax to date
Total Student Loan repayment recovered to date

If you’ve employed the same person more than once in a tax year, report for their current employment only.

Pension deductions

Field	Description
Employee pension contributions paid under ‘net pay arrangements’	Pension contributions paid under ‘net pay arrangements’ in this pay period
Employee pension contributions not paid under a ‘net pay arrangement’	Contributions taken from their pay after deducting tax and NICs in this period
Employee pension contributions paid under ‘net pay arrangements’ year to date	The amount of pension contributions your employee paid under the ‘net pay arrangements’, to date, in this employment, within the tax year
Employee pension contributions not paid under a ‘net pay arrangement’ year to date	The amount of pension contributions that are not paid under the ‘net pay arrangements’, to date, in this employment, within the tax year

Statutory maternity, paternity, adoption and shared parental pay

Field	Description
Statutory Maternity Pay (SMP) year to date
Statutory Paternity Pay (SPP) year to date
Statutory Adoption Pay (SAP) year to date
Statutory Shared Parental Pay (ShPP) year to date
ShPP: Partner surname or family name	Only put this when you report ShPP for the first time for this employee
ShPP: Partner forename or given name	Only put this when you report ShPP for the first time for this employee
ShPP: Partner second forename or given name	Only put this when you report ShPP for the first time for this employee
ShPP: Partner National Insurance number	Only put this when you report ShPP for the first time for this employee

If you pay benefits through payroll

Enter this information if you’ve agreed with HMRC to tax benefits through payroll, instead of reporting in the normal way.

Field	Description
Items subject to Class 1 National Insurance only
Benefits this period taxed via payroll	Also include this in ‘Taxable pay in this period’
Benefits taxed via payroll year to date

Employee pay information

Report details of each payment you make an employee in a FPS.

Field name	Description
Employee tax code
Employee tax code: Week 1/Month 1 indicator	Only put ‘Yes’ if their tax code has ‘W1’ or ‘M1’ at the end
Employee hours normally worked	Put ‘A’ if less than 16 hours, ‘B’ if 16 to 23.99 hours, ‘C’ if 24 to 29.99 hours, or ‘D’ if 30 hours or more. Put ‘E’ if you don’t pay your employee regularly or you pay them a workplace pension or annuity
Pay frequency	Put ‘W1’ if weekly, ‘W2’ if fortnightly, ‘W4’ if every 4 weeks, ‘M1’ if monthly, ‘M3’ if quarterly, ‘M6’ if twice a year, ‘MA’ if annually, ‘IO’ if a one-off payment, or ‘IR’ if you pay your employee irregularly
Payment date	The date you paid them, not the date you run your payroll. Use the normal payday if it falls on a non-banking day
Tax week number	The week you paid them if you pay them weekly, fortnightly or every 4 weeks
Tax month number	The month you paid them if you pay them monthly, quarterly, twice a year or annually
Number of earnings periods covered by payment
Bacs hash code	Only put this if you’re paying them through Bacs using your own Service User Number (SUN)
Aggregated earnings indicator	Only put ‘Yes’ if you’ve added the earnings from more than one job to work out their National Insurance

Late reporting reason

If you send a FPS after your employee’s payday, let HMRC know why in the ‘Late reporting reason’ field.

HMRC code	Situation	When to report
G	You have a reasonable excuse	As soon as possible
H	You correct an earlier payroll report	On your next regular FPS, or an additional FPS, report the correct payment details. Send by the 19th of the tax month after your original FPS for HMRC to show the correction in that month’s PAYE bill
F	You have an employee who’s either paid less than £112 a week or has worked with you for less than a week	Within 7 days of paying your employee
D	You pay your employee an expense or benefit where you must pay NICs, but not Income Tax, through payroll. This depends on the benefit	Within 14 days of the end of the tax month
F	You pay your employee based on their work on the day (for example, harvest workers paid based on how much they pick)	Within 7 days of paying your employee
A	You’re an overseas employer paying an expat employee, or you pay them through a third party	By the 19th of the tax month after making the payment
B	You pay your employee in shares at less than market value	Usually by the 19th of the tax month of giving them the shares – contact HMRC for complex situations
C	You make any other non-cash payment (for example, vouchers or credit tokens) to your employee	By the 19th of the tax month after making the payment

If HMRC disagrees or you don’t send a FPS or EPS, they may send you a filing notice through PAYE Online or your commercial payroll software package. Penalties for late reporting started from 6 October 2014.

National Insurance

Include information about National Insurance in your FPS when you pay an employee £112 or more a week.

For employees paid less, you only need to include this information if you’re not required to report their earnings for tax (for example, you’re an overseas employer that doesn’t need to pay tax in the UK).

Field	Description
National Insurance category letter	Your employee’s National Insurance category letter. You can use up to 4 for each payment
Gross earnings for NICs in this period	The total pay that’s subject to NICs this period – usually all payments £112 a week or over. Also include pay below this if you’re not required to report it for tax
Gross earnings for NICs year to date	The total pay subject to NICs this tax year
Earnings at the Lower Earnings Limit (LEL) year to date	The total pay at £112 a week (£486 a month) or over. Don’t include any smaller payments, even if you’re not required to report it for tax
Earnings above LEL up to and including the Primary Threshold (PT) year to date	The total pay between £112 and £155 a week (or £486 and £672 a month)
Earnings above the PT, up to and including the Upper Accrual Point (UAP) year to date	The total pay between £156 and £770 a week (or £676 and £3,337 a month)
Earnings above the UAP, up to and including the Upper Earnings Limit (UEL) year to date	The total pay between £770 and £815 a week (or £3,337 and £3,532 a month)
Employee contributions payable this period	The primary contributions (employee’s NICs) deducted from your employee’s pay this period. If you don’t pay an employee in a pay period enter 0.00
Employee contributions payable year to date	The total primary contributions (employee’s NICs) deducted from your employee’s pay. If you don’t pay an employee in a pay period put the same figure as on your last FPS
Total of employer’s contributions payable in this pay period	The secondary contributions (employer’s NICs) you need to pay this period. If you don’t pay an employee in a pay period enter 0.00
Total of employer’s contributions payable year to date	The total secondary contributions (employer’s NICs). If you don’t pay an employee in a pay period put the same figure as on your last FPS
Scheme Contracted Out Number (SCON)	Only put this if you run a contracted-out workplace pension scheme and your employee’s National Insurance category letter is D, E, I, K, L, N, O or V. You can find your SCON on your contracting-out certificate or from your pension provider

Report this National Insurance information when you pay a director.

Field	Description
Director’s NIC calculation method	Put ‘AN’ if you’re using the standard annual method of work out the director’s NICs, or ‘AL’ if you’re using the alternative method
Week of director’s appointment	Put the tax week the director was appointed

EPS: what to report

Send an EPS by the 19th to claim any reduction on what you’ll owe HMRC (for example, statutory pay) from your FPS sent the previous tax month. If you’ve not paid any employees in a tax month, send an EPS instead of an FPS.

Include your employer information as well as the below.

Reclaiming statutory pay for parents and Construction Industry Scheme deductions

Fill in these fields in your EPS if you:

• reclaim statutory maternity, paternity, adoption and shared parental pay – you can reclaim 92%, or 103% if your business qualifies for Small Employers’ Relief
• made Construction Industry Scheme (CIS) deductions

If you run more than one payroll under the same PAYE employer reference, include the total amount of reductions for all those payrolls.

Field	Description
Tax month	Put which tax month the EPS credit is for
Statutory Maternity Pay (SMP) reclaimed this tax year	Put how much statutory maternity payment you’ve claimed
Statutory Maternity Pay NIC compensation recovered this tax year	Put how much NICs compensation you’ve recovered through Small Employers’ Relief
Statutory Paternity Pay (SPP) reclaimed this tax year	Put how much statutory paternity payment you’ve reclaimed
Statutory Paternity Pay NIC compensation recovered this tax year	Put how much compensation you’ve recovered through Small Employers’ Relief
Statutory Adoption Pay (SAP) reclaimed this tax year	Put how much statutory adoption payment you’ve reclaimed
Statutory Adoption Pay NIC compensation recovered this tax year	Put how much NICs compensation you’ve reclaimed through Small Employers’ Relief
Statutory Shared Parental Pay (ShPP) reclaimed this tax year	Put how much Statutory Shared Parental Pay (ShPP) you’ve reclaimed this tax year
Statutory Shared Parental Pay (ShPP) recovered this tax year’	Put how much NICs compensation you’ve recovered through Small Employers’ Relief
CIS deductions suffered	If you’re a limited company that has had CIS deductions made from payments received for work in the construction industry, enter the total amount of CIS deductions suffered year to date

Bank details

Include details of the bank you want HMRC to pay into if you’re overpaid or you’ve reclaimed any statutory maternity, paternity or adoption pay or CIS deductions.

Field	Description
Name of account holder
Account number
Branch sort code
Building society reference	If applicable

You didn’t pay any employees in a period

Send an EPS with the following information by the 19th after the tax month you didn’t pay any employees. The tax month starts on the 6th. Don’t send an FPS.

Field	Description
No payment for period	Put ‘Yes’ to tell HMRC you didn’t pay any employees
No payment dates from	Put the 6th of the first month where you didn’t pay any employees
No payment dates to	Put the 5th of the last month where you didn’t pay any employees
Period of inactivity from	Tell HMRC in advance if you won’t be paying any employees for a minimum period of one month, and a maximum of 12 months. Put the 6th of the first month where you won’t pay employees – you can only notify from the beginning of the next tax month
Period of inactivity to	Put the 5th of the last month where you won’t pay any employees

Claim Employment Allowance

You could get up to £3,000 a year off your National Insurance if you claim Employment Allowance.

Field	Description
Employment Allowance indicator	Put ‘Yes’ to automatically claim the allowance each year. Only put ‘No’ if you are ineligible to claim, see further guidance to know when to stop your claim. There is no need to put ‘No’ if you have reached your full allowance entitlement.

Report Apprenticeship Levy

From April 2017, employers who have an annual pay bill greater than £3 million, or who are connected to other employers by virtue of the connected companies or connected charities rules, which in total have an annual pay bill of more than £3 million, need to tell HMRC about their Apprenticeship Levy.

Field	Description
Tax year	Put the tax year to which the return of the Apprenticeship Levy relates
Employer’s HMRC office number
Employer‘s PAYE reference	Put the PAYE reference to which the return of the Apprenticeship Levy relates
Employer’s accounts office reference
Annual Apprenticeship Levy Allowance Amount	Amount of annual Apprenticeship Levy Allowance the employer is allocating to the employer’s PAYE reference
Apprenticeship Levy due year to date	Amount of Apprenticeship Levy liability due to date which the employer has calculated
Tax month	Put the tax month to which the return of Apprenticeship Levy relates

New employees

When an employee starts working for you, register them with HMRC by including this information in your FPS the first time you pay them.

Field	Description
Start date	Only fill this in the first time you pay a new employee
Starter declaration	Put the starter declaration that you’ve worked out. Don’t put anything for new pensioners, or employees seconded from abroad
Student Loan indicator	Put ‘Yes’ if your employee needs you to make Student Loan deductions
Address
UK postcode
Foreign country	Only put their country of residence if they live outside the UK, Channel Islands or Isle of Man
Passport number	Include this if you reviewed your employee’s passport to check they can work in the UK

There are special rules for what to fill in if you:

• pay a workplace pension
• take on an employee seconded from abroad

When an employee leaves

Report this information when an employee leaves or if you close your PAYE scheme.

Field	Description
Date of leaving
Payment after leaving indicator	Put ‘Yes’ if you pay an employee after you’ve sent an FPS with their leaving date (for example, you’re paying them after giving them a P45)

Workplace pensions

Report this information when you’re paying a workplace pension or annuity.

Field	Description
Occupational pension indicator	Put ‘Yes’ if you make occupational pension payments
Annual amount of occupational pension	Only put this the first time you pay someone from an HMRC-registered workplace pension scheme. Otherwise leave this field blank (don’t enter £0.00)
Employee receiving occupational pension because they’re a recently bereaved spouse/civil partner	Put ‘Yes’ if this applies
Trivial commutation payment type	If you’re paying a lump sum – put ‘A’ for a trivial commutation lump sum (TCLS), ‘B’ if it’s from a personal pension scheme, or ‘C’ if it’s from a workplace or public service pension scheme
Trivial commutation payment	The lump sum paid. Also fill in the ‘Taxable pay to date’ and ‘Taxable pay in this period’ fields, and put any non-taxable amount in the ‘Non-tax or NIC payment’ field
Payment to a non-individual	Put ‘Yes’ if you make payments to a personal representative, trustee or corporate organisation etc

End-of-year or final reports

You’ll need to complete certain annual reports and tasks to prepare for the next tax year, which starts on 6 April.

Report this information in your final FPS or EPS of the tax year. You should also fill in the relevant fields if it’s your last report because you’re closing your PAYE scheme.

Field	Description new
Final submission for year	Put ‘Yes’ to tell HMRC this is your final payroll report of the tax year
Ceased indicator	Put ‘Yes’ if this is the last report because you’re closing your PAYE scheme. Also enter ‘Date scheme ceased’ and the ‘Date of leaving’ for all your employees. Don’t fill in ‘Final submission for year’
Date scheme ceased
Forms P11D and P11D(b) due	Put ‘Yes’ if you’ve given any employees expenses or benefits this year that you’ll need to report
Employees pay to third party	Only put ‘Yes’ if you’ve paid your employee’s salary or wages to anyone else this year (excluding any payments related to child maintenance or salary sacrifice)
Employees out of UK	Only put ‘Yes’ if anyone employed abroad also worked for you in the UK for more than 29 days this year
Free of tax payments	Only put ‘Yes’ if you paid any of your employees’ tax for them this year
Service company	Only put ‘Yes’ if you’re a service company that’s operated IR35 this year
Expenses and benefits	Only put ‘Yes’ if anyone else paid expenses or benefits to any of your employees while they were employed by you this year

Use form TC689 if you want an intermediary, such as Citizens Advice, to act on your behalf for your tax credits or Child Benefit.

Don’t use form TC689 to authorise a paid agent such as an accountant or other professional adviser to act on your behalf. You should use form 64-8 instead.

Before you start

If you are using an older browser, eg Internet Explorer 8, you’ll need to update it or use a different browser. Find out more about browsers.

You’ll need to fill in the form fully before you can print it. You can’t save a partly completed form so we suggest you gather all your information together before you begin to fill it in.

Related forms and guidance

Claiming and dealing with tax credits for someone else
Guidance on how to deal with the Tax Credit Office for someone else.

Form 64-8
Use form 64-8 to authorise HM Revenue and Customs to communicate with an accountant, tax agent or adviser acting on your behalf.

Who’s affected by IR35

IR35 is also known as ‘intermediaries legislation’. It’s a set of rules that affect your tax and National Insurance contributions if you’re contracted to work for a client through an intermediary. You may need to follow IR35 if you work for a client through an intermediary.

The intermediary can be:

• your own limited company
• a service or personal service company
• a partnership

If IR35 applies then the intermediary has to operate PAYE and National Insurance contributions on any salary or wages it pays to you during the tax year.

The rules are designed to make sure that the right rate of tax and National Insurance is paid for you.

IR35 may also apply if you’re working through an intermediary and you:

• or your intermediary, or client are abroad
• work in the construction industry
• are an office-holder
• work with your partner or spouse
• are working, through an intermediary, for a charitable organisation

IR35 doesn’t apply if you work for a client through a Managed Service Company (MSC) or agency, for example an employment agency.

There’s more detailed information about the IR35 conditions of liability in the Employment Status manual.

Find out what you need to do if IR35 applies to you.

Penalties for not following IR35 rules

The intermediary is always responsible for complying with IR35 legislation when it applies. If you’re a director of your limited company or a member of your partnership, you must make sure all relevant legislation is followed, and take responsibility for deciding if it applies for each of your engagements or not.

If IR35 legislation applied to previous contracts that you worked on but wasn’t complied with, you should tell HM Revenue and Customs (HMRC) immediately. If you make a voluntary disclosure it may reduce any penalties you have to pay. Contact the IR35 Helpline for advice on making a disclosure.

There can be significant consequences if you, your intermediary, or client ignore IR35 legislation. Interest and penalties can be charged on any extra tax and National Insurance contributions that are owed. Penalties can be more severe if it can be proved that IR35 rules or legislation have been deliberately ignored.

Working out the worker and client relationship

When you’re deciding if IR35 applies to a contract it’s important to establish what the underlying relationship (your employment status) is between you (the worker) and the client for each contract or engagement.

There’s usually a contract between your intermediary and the client, either directly or through another party such as:

• a staffing agency
• a recruitment agency
• an employment business.

You have to use the facts of each contract or engagement to decide if IR35 applies, and not any label, description, or job title.

Work out your employment status for each contract by considering what that relationship would be if there wasn’t an intermediary involved.

Do this for each individual contract, and make sure you consider them again if they change.

Remember that there can be more than one agency in the chain to supply your services to a client.

If you use your own intermediary to provide a service

If you’re engaged by a client through your own intermediary, it’s the client’s responsibility to consider your employment status and make sure they meet their own tax and National Insurance liabilities.

There’s usually a contract between your intermediary and the client, either directly or through another party such as a staffing agency, a recruitment agency or an employment business. There can be more than one agency in the chain to supply your services to a client.

If all of the following apply then you need to follow IR35 legislation:

• you work for a client as a self-employed contractor, sole trader, freelancer, or consultant
• you could be considered an employee if the intermediary didn’t exist
• you pay yourself through your own limited company or partnership (sometimes called an ‘intermediary’ or ‘personal service company’) or you have a material interest in that company

There are some circumstances where the client may be responsible for operating your PAYE, such as if:

• the contract or working arrangement shows that you’re engaged directly by the client as an office-holder or employee, then the client will be responsible for operating PAYE for you
• a client contracts directly with you – the client will always be responsible for operating PAYE for you, even if payment for your services is made to your intermediary

There may be penalties if the client doesn’t operate PAYE where needed.

Using an agency or MSC to provide a service to a client

There’s different legislation to follow if you provide services to an employer or end client through a third party agency or MSC.

You have to comply with agency legislation rather than IR35 if you provide services to an employer through a third party agency and technically, you’re not a direct employee of either.

If the agency is based outside the UK the client may be liable to operate PAYE and make the appropriate deductions, returns and payments of tax and National Insurance contributions instead.

You need to follow MSC legislation rather than IR35 if you provide your services to end clients through an intermediary company which is controlled and run by a third party service provider.

If you work in the construction industry

Both the IR35 legislation and the Construction Industry Scheme (CIS) can apply if you’re a subcontractor working in the construction industry through a limited company or partnership.

For example, this can happen if you’d be considered as an employee of the client if there wasn’t a limited company or partnership acting as an intermediary.

To stop tax and National Insurance contributions being paid twice on the same earnings within the CIS and IR35 schemes special rules have to be applied.

IR35 if you, the intermediary, or client is abroad

The limited company or partnership is incorporated or resident abroad

Under IR35, when a worker living in the UK does work for a client in the UK, the intermediary is treated as having a place of business in the UK even if it’s incorporated or resident outside the UK.

If an offshore intermediary fails to deduct and account for tax and National Insurance due under IR35 legislation, liability to pay this can be transferred to the:

• worker
• onshore agency
• end client

Action to recover employer’s National Insurance contributions not paid by an offshore intermediary could also include action against any of its assets located in the UK.

HMRC has powers to obtain details of payments to offshore intermediaries from the records of clients and agencies.

If the client is non-UK resident

Deciding if IR35 applies depends on:

• the tax residence status of the worker and client
• where the duties of the contract are carried out

Foreign nationals

If you’re a foreign national who provides your services through an intermediary you may be affected by the IR35 legislation.

Further HMRC services to help you find out if IR35 legislation applies

IR35 Helpline

If you need help understanding and applying IR35, contact the IR35 Helpline. It’s confidential and any information you give won’t be shared with HMRC compliance teams. You don’t need to reveal your identity to use the helpline.

The Contract Review Service

If you want to be certain about your position you can use HMRC’s Contract Review Service. They will review a written contract for you, and if they decide that IR35 doesn’t apply to your contract, they’ll give you a confirmation letter with a unique reference number that will be valid for 3 years. If, later on, HMRC open an IR35 review, you can give them this number and they’ll suspend the review while they consider all the information. HMRC will close the IR35 review if:

• the contract reviewed is typical of your engagement terms and conditions
• the information provided is accurate
• evidence shows that circumstances haven’t changed

Contact the IR35 Helpline to get in touch with the Contract Review Service.

What the Contract Review Service can do

The Contract Review Service can only give advice on existing contracts. HMRC won’t usually give opinions to companies or partnerships on contracts for a particular tax year unless they have all the information they need before the 5 April of that tax year.

They will review the:

• facts, including looking at the relationship between the worker and client
• contract or contracts which establish the relationship

They may also want to talk to you and to others, including the client.

Information the Contract Review Service will need

If you don’t or can’t provide all the information, it may not be possible for HMRC to form an opinion.

HMRC will need to see copies of any contracts involved in the relationship. You should send copies of these contracts to the IR35 Customer Service Unit together with any other relevant information, such as:

• written statements from the worker and the client about their views of the working terms and conditions, with particular emphasis on what happens in practice
• details of how the engagement was obtained and the recruitment procedure, together with a copy of any adverts for the work in question
• a description of the nature of the services to be performed, together with any job or work specifications for the contract
• copies of any tenders made by the intermediary
• details of any additional contractual terms not included within the written contracts, whether oral, written, or implied
• details of how and who allocates the work and the role the worker plays in the client’s organisation any other documentation relating to the working terms and conditions
• other relevant information from the worker or intermediary – for example this might include:
  • the number of engagements held during the year
  • the number of different engagers
  • expenditure on equipment necessary for the performance of the contract

You should also provide the:

• worker’s National Insurance number
• company’s HMRC reference number
• company’s postcode

If you can’t get a copy of a written contract, for example a contract between an agency and the client, it’s essential that there’s some evidence from the client about the terms and conditions of work. HMRC can help you if you have a problem obtaining contracts.

In some cases HMRC may not have enough information to give an opinion and in others their opinion may have to be heavily qualified. But you can rely on it so long as you’ve supplied all the relevant information and there’s evidence that the terms of the engagement don’t change part way through.

For advice on using the Contract Review Service contact the IR35 Helpline.

If you disagree with HMRC’s opinion

If you don’t agree with an opinion of the IR35 Contract Review Service and it can’t be resolved quickly, it will be passed to the local HMRC IR35 inspector. This will only be done with your full permission. They’ll reconsider the opinion given and, where necessary, seek additional evidence from the worker and/or the client.

If there’s enough evidence to support an opinion and you disagree with that opinion, you have a right of appeal and can ask for an appealable decision.

Internet filing enabled software and online forms are available from HM Revenue and Customs (HMRC) and commercial software suppliers. These can be used to file charities repayment claims online.

HMRC accepts repayments claims filed using any of the products listed in this document.

Technical support for charities software developers

Anti-Dumping Duty (ADD) is an import duty charged in addition to normal Customs Duty and is applied across the whole European Union (EU). It’s designed to allow the EU to take action against goods that are sold at less than their normal value – that being defined as the price for ‘like goods’ sold in the exporter’s home market.

You can find earlier ADD measures on the National Archives.

This notice cancels and replaces Notice 700/60 (April 2012). Details of any changes to the previous version can be found in paragraph 1.2 of this notice.

This notice cancels and replaces Notice CCL1/2 October 2013.