Often referred to as “perks”, they include the likes of company cars, travel expenses and private medical insurance. The recent introduction of the Payrolling Benefits in Kind online service is one that has come with much confusion, below you will find a simplified guide to the change in PAYE legislation.(1) In order to start payrolling or continue payrolling BiKs in the 2016 to 2017 tax year, employers must have registered with HMRC’s online Payrolling Benefits in Kind service before 6 April 2016. This is accessed through the employers Government Gateway account. Employers, who intend to payroll benefits and expenses but have not registered, must now wait and register before the 2017 to 2018 tax year begins as HMRC need to amend employees’ tax codes in advance to remove any BiKs previously included. (2) This is a completely voluntary service; employers are not required by law to introduce this service, but where an employer was previously taxing their benefits through the payroll under an informal arrangement they are required to register them with HM Revenue and Customs (HMRC). If an employer chooses to introduce this service, they will no longer have to report benefits and expenses on a P11D. It is also important to note that HMRC no longer accept informal reports of employee benefits which are often referred to as lists. Read more about auto-enrolment:
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- Living accommodation;
- Non-cash vouchers and credit tokens; and
- Interest free and low interest (beneficial) loans.
- There is insufficient income to cover the tax on the BiK;
- If you stop providing BiK to your employee;
- You make a mistake in registering and don’t realise until after the start of the tax year. Also note, your registration is continuous, you do not have to inform HMRC that you want to payroll BiKs in the next tax year. You can however choose to deregister from payrolling BiKs, if you decide to stop before the start of a new tax year, and you can deregister via the online payrolling BiK service.
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