Benefits In Kind HMRC Guidance Update
HMRC have issued a Benefits in Kind HMRC guidance update. PAYE legislation is changing. If you’re intending to or already payroll benefits and expenses you must register them with HMRC. This is done using the online Payrolling Benefits in Kind (PBIK) service.
The guidance on Payrolling Benefits in Kind issued in June 2015 has been revised and updated by HMRC from 2nd November 2015 and can be found here.
The new payrolling Benefits in Kind (PBIK) service has now officially launched. It is available for registration for those intending to start or continue payrolling benefits and expenses in the 2016-17 tax year when new regulations come into effect.
Using the PBIK service will negate the need to report benefits and expenses on a P11D. This is with the exception of vouchers and credit cards, living accommodation and interest-free and low-interest (beneficial) loans. Those who have previously payrolled these benefits informally can continue to do so but must still report them on a P11D.
If you’re intending to or already payroll benefits and expenses you must register them with HM Revenue and Customs (HMRC). This can be done by using the online Payrolling Benefits in Kind (PBIK) service. If you use this service and payroll benefits and expenses you won’t have to report them on a P11D.
If you use this service the only benefits you won’t be able to payroll are:-
- vouchers and credit cards.
- living accommodation.
- interest free and low interest (beneficial) loans.
If you’ve previously been payrolling these benefits informally you can continue to do so but you must still report them on a P11D.
Before using the PBIK service you’ll need to ensure your payroll software allows you to collect the right amount of tax on benefits and expenses.
Our software at Highland Payroll Services will allow you to do so.
You need to align your payroll software and register to payroll using the new service by 5 April 2016. You won’t be able to register after this date for the 2016 to 2017 tax year as HMRC can’t process changes in-year.
To avoid being sent multiple tax codes for your employees you should register before the annual coding process which usually starts around 21 December.
You can’t use this service if you use HMRC’s Basic PAYE Tools as they don’t support payrolling.
If you don’t register the benefits and expenses you intend to payroll you’ll have to report them on a P11D. From the 2016 to 2017 tax year HMRC will no longer accept informal reports of employee benefits, sometimes referred to as lists.
All payrolled benefits and expenses need to be included when you report your payroll information in a Full Payment Submission. P11D (b) forms must still be completed, including the total benefits and expenses provided, whether or not they’ve been put through your payroll.
If you payroll car and car fuel benefit you mustn’t complete P46 (Car) forms. The tax is deducted on these benefits at source. If you use a contracted out company car provider you must notify them of your decision to payroll and ensure they don’t submit P46 (Car) forms for payrolled benefits.
For full details of the Benefits in Kind HMRC guidance update click here.
