Register with HMRC before the end of this tax year if you want to process Benefits in Kind through the payroll in 2018.
Benefits in Kind
Benefits in Kind (BIKs) traditionally have to be reported via a P11D. These are benefits an employee receives outside of the payroll but usually needs to pay tax for, such as a company car. There is also a National Insurance liability for the employer.
Benefits in Kind and Payroll
The main advantage for the company of using payroll to report Benefits in Kind is that there is no longer a requirement to submit the P11D forms. You currently will still need to submit the form P11D(b) to report the Class 1A NICs liability, but this is far less onerous than multiple P11Ds.
Not all BiKs can go through the payroll, but if you have benefits such as medical or health insurance these are really straightforward to manage in this way.
To report Benefits in Kind through the payroll you must register your intention with HMRC before the start of the tax year. If you ask to register mid-tax year HMRC may be able allow this, but you would still need to produce P11Ds but mark them as ‘payrolled’.
We reported this development last year, but as the deadline is rapidly approaching thought a reminder might be useful if you still intend to register. This does not replacement PAYE Settlement Agreements, but these are changing slightly from April too.
28th February 2018