News added on 17.02.2017

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Benefits in kind

Payrolling benefits reminder

HMRC has issued a reminder that the deadline for enrolling for the payrolling of benefits is fast approaching. When and how do you need to notify HMRC?

Payrolling benefits. Since 6 April 2016 employers have the statutory option to tax benefits in kind through the payroll. The main advantage of opting for this is that it saves you from the tedious task of completing P11Ds for employees and, if your company payrolls car benefits, there is no need to file a Form P46(car). Payrolling benefits also avoids the need for the benefits to be included on the employee’s tax code - HMRC will remove the benefit from employees’ tax codes once you start to payroll the benefits.

Registration deadline. If your company would like to payroll benefits from April 2017, you will need to register with HMRC using its online payrolling benefits in kind service. As HMRC doesn’t have the ability to process changes in-year, the deadline for registering for the 2017/18 tax year is 5 April 2017. Unfortunately, there’s still no facility for agents to register on their clients’ behalf.

Tip 1. Although the official registration deadline is 5 April 2017, to avoid being sent multiple tax code notices for employees, it’s worth registering as soon as possible.

Tip 2. If you have been payrolling benefits since April 2016, then there’s no need to notify HMRC that you intend to continue doing so for the 2017/18 tax year.

Tip 3. There’s a free HMRC webinar on payrolling benefits on 21 February at 9.00am.

If you want to payroll benefits in the 2017/18 tax year, you need to register using HMRC’s online payrolling service by 5 April 2017. However, the sooner you do it, the less chance you have of being sent multiple tax code notices.

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