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Posted Fri, 08 Mar 2024 10:22:42 GMT by RV_2024
Hello, The connected companies total combined pay bill YTD March 2024 (YTD tax month 12) reached the total of £3,000,000 for 12 month. The total combined bill before tax month 12 was always below £3,000,000, it became more than £3,000,000 at the end of the tax year 2023-2024. My question is - do we start reporting and paying the levy from the next tax year 2024-2025 or we need to report and pay the levy for YTD tax month 12 2023-2024 and that was the month the combined bill became more than £3,000,000? Also, we have 5 companies connected in a group and we will need to split the annual allowance of £15,000 between the companies, but if we use the percentages for the split based on the total pay bill for 2023-2024 it could be different percentage for 2024-2025. My question is - can we split the annual allowance between the 5 companies each month based on the real pay bill YTD in 2024-2025? Can we use and report different annual allowance each tax month based on the percentages each month that could be different each month. Or we need to make a decision on the split of £15,000 between the 5 companies at the start of the tax year (tax month 1 2024-2025) and won't be able to to change the annual allowance during the tax year? Thank you for your help!
Posted Mon, 11 Mar 2024 16:58:30 GMT by HMRC Admin 19

The levy is technically paid by everyone, it's just that everyone gets a £15000 allowance before they pay. If your pay bill is below £3000000 then you will not use the full £15000 and so will not pay it. However if you split the allowance between connected companies, this reduces the allowance for individual companies which may mean that company paid the levy before others.

If the companies were connected at the start of the tax year, they would have paid the levy once they have used the allowance, If they were not connected then they are not treated as connected.

With regards to spliting the annual allowance you should decide the split at the start of the tax year and then leave it as that until the end of the tax year.

Due to the technical nature of your query, if you need any further clarification you will need to contact our Employers team for advice.

Employers: general enquiries

Thank you.

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