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Payrolling Benefits

It is now possible to include your employee benefits on the payroll rather than completing a separate P11D. It can make benefit in kind taxes easier to understand as well as offering a more efficient way of collecting the correct amount of tax in real time. Employers are required to register to use the payrolling benefits service before the start of the tax year so to register for 2019/20 you will need to do so online with HMRC prior to April 2019.

The benefits which can be included in payroll are the following:

  • Cars
  • Car fuel
  • Medical insurance
  • Subscriptions

These benefits will need to be included when you report your payroll information in your full payment submission.

You are unable to report the following benefits through payroll:

  • Vouchers
  • Credit Cards
  • Living Accommodation
  • Interest free loans

Once you have registered to use the service, HMRC will issue your employees with a revised tax code which removes the benefits.

Currently you are unable to report your Class 1A NICs due so you are still required to submit the form P11Db to report these on an annual basis.

The content of this article is for general information only and does not constitute tax advice. It should not be relied upon and action which could affect your business should not be taken without appropriate professional advice.

Written by Alice Gay ACCA ACIPP


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