Voluntary Payrolling of Benefits in Kind

From April 2016 employers will be able to include taxable benefits as part of an employee’s pay and thus account for PAYE on the benefits. In order to payroll benefits, employers will have to register with HMRC for the service via the Government Gateway before the start of the new tax year. Unfortunately agents are currently not able to complete this registration on the employer’s behalf. Once registered, employers will no longer be required to include the payrolled benefits on forms P11D, but will still need to complete a form P11D(b) and pay the employer Class 1A NICs due.

As an agent we are unable to complete registration on behalf of our clients. Neither will we have any way of knowing who has registered. Therefore we are not proposing to start this when it becomes available in April 2016. However if we currently take care of your payroll and you intend to register for this service yourself, it is essential that you let us know. Although registration is voluntary, once registered it is compulsory until the subsequent tax year. You will need to let us know which of your employees are affected and by which benefits. You will also need to inform us if there are any changes to the benefit being provided.

We will be writing to all of our payroll clients towards the end of 2016 advising what you need to do to start this process for the 2017/2018 tax year.  In the meantime, if you have any questions about this or any other payroll related issue, please get in touch.

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