CWG2 Updated May 2019

HMRC have updated the CWG2“Further Guide to PAYE and NI” on the 8thof May 2019.  This is the guide that tells employers how to operate PAYE for tax and NICs in “some less common situations”.  For example, just in section 1 it covers:
  • Who is an “employee” for the purposes of PAYE and Class 1 National Insurance contributions
  • When to work out National Insurance contributions and PAYE
  • How to work out National Insurance contributions and PAYE for various pay intervals
  • Operation of PAYE and Class 1 National Insurance contributions when the regular date for payment is a non-banking day
  • Change of pay interval
  • Extra payments made on a separate payday from normal pay and
  • Payments in week 53

The update is all to do with section 1.14 “Standard payments made when, or after, an employee leaves”.  This has been amended to read that payments after leaving should be taxed on code 0T week 1 or month 1 but S0T and C0T for Scottish and Welsh taxpayers.

Global Payroll Association Comment

The part about extra payments and tax operation after a P45 has been issued still says use code 0T (week1 or month 1) and it is only the part where the payment is in respect of employment related securities that has been updated.  This seems to be inconsistent with other guidance on which says that payments should be on 0T, S0T or C0T depending on the residence status of the taxpayer. 

We cannot explain this inconsistency.

On another note, the CWG2 is constantly updated in the tax year so we advise professionals to keep an eye out for announcements about the changes which we will always publicise.