8 min Over and above that the control of UK employment tax compliance in Australia has its own set of challenges requiring meticulous timing / knowledge of HMRC rules. For Australian businesses that operate in the UK, late filing penalties can be quite severe and affect your international growth budgets significantly!
Critical Deadline Management: The Foundation of Compliance
UK employment tax duty timescales The UK timeframes to meet your employment tax obligations are very strict and start from when you submit RTI. These are due on or before every pay day so there is ongoing compliance for Australian businesses with UK employees working remotely.
Key annual deadlines include:
- P11D filings: July 6th for benefits reporting
- National Insurance Class 1A: deadline to pay is July 22nd
- Year end RTI processing: Final submission date 19 May
- P60s distributed: May 31 to all employees
The task is even more challenging when you consider Australian businesses are required to work through these requirements in multiple time zones, sometimes needing overnight processing to meet the HMRC deadlines. HMRC figures show late filing penalties are imposed on more than 1.2 million employers every year, which adds up to £400m of unnecessary expense and with no excuse for not filing now, these numbers have been falling.
HMRC Compliance Timeline: Navigating Seasonal Changes
The UK employment tax diary has peaks and troughs, with some months – typically April with new tax year changes – being particularly busy. As well as adjusting the optional National Insurance rates and benefits payrolling changes, there is also a RTI submission update which requires immediate action.
Critical April compliance activities:
- New National Insurance thresholds implementation
- Benefits payrolling system adjustments
- Updated RTI submission parameters
- Communicate With Employees About Tax Code Changes
A significant number of Australian businesses see these remote transitions as much easier to manage than they really are. With a six-hour time difference, HMRC’s urgent interventions are landing in Australia outside the country’s average business day which may prevent vital responses to compliance-related issues.
Minimize Workflow from Home: How to Keep Deadlines on Track Automatically
UK Employment Tax Year now requires a ‘particular’ UK calendar to work with Australian business. Dispute management software removes the danger of a missed embargo and delivers live compliance status updates across time zones.
Essential automation features:
- Built-in calendar scheduling with conversion to Australian time zone.
- UK submission dates Follow the countries you know and love so much. Automatically submit RTI in line with UK payroll date(s).
- Systems and methods of compliance reminders with increasing notifications.
- Cross-border reporting coordination.
The complexity of such systems is evident when you are handling more than one aspect of compliance at a time. Australian businesses work locally in business hours but the process is automated, so UK employment tax compliance continues to tick away without human interference.
Penalty Prevention Strategy: Understanding HMRC Enforcement
In the UK, HMRC penalty mechanisms for breaches of employment tax rules are layered and can very swiftly add up to a significant amount. Late filing fines begin at £100 per month but can progress to 5% of the unpaid tax for prolonged periods of non-compliance.
Penalty escalation timeline:
- 1 day after: £100 statute fixed penalty.
- 3 months overdue: Further £100 fine.
- 6 months late: 5% of the tax unpaid at that date or £300 whichever is greater.
- 1 year late: Plus 5% penalty.Â
The grace period rules provide little relief, allowing few extensions beyond 3-7 days in the case of electronic submissions. Australian companies will not be able to claim they did not receive their mail on time, or it was delivered during the night by post.
Year-End Processing Best Practice: Managing Complexity
The UK employment tax year-end processing requires the coordination of several compliance streams, fully tracked. P60s need to be distributed by 31st May, and for Australian companies this means dealing with UK postal requirements or electronic distribution systems.
Year-end coordination requirements:
- P60 preparation and distribution logistics
- P11D benefit calculation and submission
- Final RTI submission accuracy verification
- Comprehensive audit trail documentation
This is further compounded by year-end processing falling during Australia’s financial year end, resulting in dual compliance pressures which may exhaust internal resources.
Regulatory Change Adaptation: Staying Current with HMRC Updates
The UK employment tax rules are changeable and it is not uncommon for HMRC to issue updates which require immediate system changes. System patches automatically keep your business up to date with changed requirements, however Australian businesses should double check that updates cater for their specific operational needs.
Recent developments in regulatory matters have featured digital record keeping requirements, a greater requirement to report under RTI and changes to the calculation of National Insurance. According to UK Government figures, red tape has soared by 23% in three years with the result that professionally managed becomes ever-more vital.
The Competitive Strength of Professional Management
Controlling UK employment tax compliance remotely from Australia requires much more than a simple payroll service. Expert management from site operations and compliance through to local authority, provider or regulatory monitoring make it easy for international businesses to get on with doing their business.
Such investment in a professional UK employment tax function typically more than pays for itself through penalty mitigation, operational efficiency improvements and the reduction of internal resources assigned to compliance.
Streamline Your UK Compliance Today
Don’t let UK employment tax complexity get in the way of your expansion. Procloz’s complete global compliance services take the hassle out of navigating UK employment tax obligations from Down Under. Our all-in-one employer of record service takes care of the RTI filings, deadline tracking & updates for compliance and with our dedicated payroll services you can be sure that every UK tax-related needs are fully met.
Paired with our first-class global payroll services, Procloz gives you access to the specialist knowledge and system at hand for maintaining perfect UK employment tax compliance while helping your business grow.
Visit Procloz today to discover how our UK compliance expertise can protect your expansion and eliminate costly penalties.
