From April 2016 employers can use the payrolling benefits and expenses online service to show the collection of tax on benefits and expenses through Pay As You Earn payroll system. If you choose to use the new system you need to register online and before the start of the tax year you want to payroll for, that will be before the 6th of April 2023 for the tax year 6th of April 2023 to the 5th of April 2024. Once the tax year has started, you can only deregister at the end of the tax year.
You should add the cash equivalent of the employees’ benefits to their pay and then tax them through payroll.
If there are employees who are excluded from paroling benefits, P11D still needs to be sent to declare the non-pay rolled benefits for those employees.
Employers can choose which benefits they wish to payroll, although some benefits (i.e. vouchers and credit cards, living accommodation, and interest-free and low-interest beneficial loans) still need to be reported to HMRC via the existing P11d system.
HMRC will make sure the value of the benefit is not included in your employees’ tax codes.
When an employer uses the service it will not need to use form P11D, but still needs to work out the Class 1A National Insurance contributions on benefits and complete form P11D(b).
Employers must still file a P11dB at year-end, regardless of whether they are payrolling benefits or submitting them on forms P11d.
TAKS Limited – Local accountants can take care of the HMRC registration process and guide you through the information required to ensure your payroll is set up to payroll benefits.
Please contact us for more information on 0117 2565052 or email us on info@taks.org.uk
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