If you want to avoid completing forms P11D for benefits provided to your employees for 2017/18, you will need to apply to do so before 5 April 2017.
Since 6 April 2016, you have had the option to process benefits in kind through the payroll. So long as the relevant tax is collected through the payroll, there will be no need to complete P11Ds for these benefits, although a P11D(b) will still be required to account for the Class 1A National Insurance contributions.
If you intend to payroll any benefits, you must register them with HMRC using the payrolling employees taxable benefits and expenses service (https://www.gov.uk/guidance/paying-your-employees-expenses-and-benefits-through-your-payroll). This must be done before the start of the tax year i.e., before 6 April 2017. You must be registered with HMRC’s PAYE online service before you can enrol.
registration is continuous, so if you have registered for 2016/17, this will continue into 2017/18 unless you deregister.
The tax codes for all employees receiving payrolled benefits will be amended by HMRC so that they are not taxed twice on the same benefit.
Once you have registered to payroll benfits, you must provide your employees with a letter explaining the position and what it means for them. Template letters are available on HMRC PAYE online once you have registered for payrolling benefits.
You must also provide employees with the following information by 1 June following the end of the tax year:
- Details of the benefits that have been payrolled
- The cash equivalent of each benefit that has been payrolled
- Separate details of any benefits that haven’t been payrolled.
The information can be provided on employees’ payslips or a separate not or statement.
If you have any queries please contact Sue Stephens or one of our payroll team.