Don't miss the benefit-in-kind payrolling deadline
If an employer provides its employees with benefits-in-kind, it can choose to "payroll" these so the employees can spread the payment of any tax. However, there is a strict deadline to meet to do this. What is it?
Payrolling recap
Employers can do away with the chore of reporting most types of benefit in kind on Form P11D by payrolling them instead. This involves employees paying tax on their benefits through PAYE deductions. As their employer they still need to submit a P11D(b) for any Class 1A NI they owe on the benefits to which payrolling applies.
Prepare for 2021/22
If an employer wants to use benefit payrolling for the first time they must register with HMRC before the start of the tax year for which they want to use it.
To use payrolling for the first time for the 2021/22 tax year, an employer has until 5 April 2021 to complete the registration via HMRC's registration site.
Warning! End to informal payrolling
If the employer uses their own system for payrolling benefits, they will need to register with HMRC before the deadline to use its formal scheme or stop payrolling benefits altogether. HMRC won’t accept informal arrangements for 2021/22 and later years.
Related Articles
-
Personal vs company donation to charity
You’re an owner manager and want to make a £5,000 donation to a local charity. You’ve claimed income tax relief under the gift aid scheme for smaller amounts but could it be more tax efficient to make the donation via the company?
-
Investment bond - undercover tax trap?
Inheritance tax is a hot topic but most couples only need to be concerned if they are worth more than £1m. What you don’t hear about is the income tax charge on investment bonds that’s payable on death. Can you reduce the tax bill before it’s too late?
-
When are staff discounts tax efficient?