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 Topics
-
What can you learn from HMRC’s input tax toolkit?
You know that penalties can be charged on careless errors and many mistakes relate to input tax being wrongly claimed. How can HMRC’s input tax guidance help your business to claim the right amount?
-
Will new property tax erode tax efficiency?
You recently purchased a new trading premises for your business and plan to charge your company rent. As tax rates on property income are going up in April 2027, is this arrangement likely to be tax efficient?
-
Slash your NI bill by hiring an apprentice
Unless you’ve been living under a rock you will know that there are not enough young people in employment, education or training. The government offers several financial incentives to employers to hire young adults as apprentices. What’s involved and what could you save?