Mentioned before we believe but a reminder that if you have an informal agreement to payroll benefits in kind, you need to reapply before 6 April 2016 to do so for the year commencing 6 April 2016. Employers will not be able to payroll vouchers and credit cards, living accommodation and interest free and low interest (beneficial) loans.
The payrolled expenses will still need to be included on form P11D(b), regardless of whether they are included in the payroll. P46(car) will not need to be completed if car and car fuel benefits are payrolled.
Only PAYE tax will be paid in the appropriate fiscal month as class 1A NIC will still be accounted for through the form P11D(b) with the payment date of 22 July (electronic) or 19 July (post).
The employer needs to calculate the cash equivalent of the benefit in kind in the same way as they would have done preparing form P11Ds and then divide this by the number of payroll payments to be made in the year. This is the amount added to salary.
If payrolling of benefits is adopted it is essential that restrictions in employees’ tax codes for those benefits are removed otherwise double taxation will occur. It will remove the P11d requirement of reporting those payrolled benefits and hopefully avoid the need for repeated adjustments to an employee’s tax code.