Did you know that businesses can include employees’ benefits in their pay? This is called payrolling and means most benefits can be taxed through your payroll instead of your employees’ tax code. It could save time as there will be no need to send a form P11D after the end of the tax year for the payrolled benefits. If you plan to include payroll benefits received by your employees in their payroll, you must register online before the start of the new tax year – 6th April 2019. You can do so here. If you use the payrolling service you: will not need to use form P11D still need to work out the Class 1A National Insurance contributions on benefits and complete form P11D(b). You can exclude employees from payrolling once you’re registered, but you will need to send a P11D to declare the non-payrolled benefits. Once the tax year has started, you will have to payroll the benefits for the whole of the tax year, or until you stop providing them. Don’t forget that you’ll also need to tell HMRC about and pay any Class 1A National Insurance contributions due on any expenses and benefits your employees received during 2018-19 (including the payrolled ones if you have already registered). If you did register online on or before 5 April 2018, and you are using the Payrolling Benefits in Kind process you’ll need to send; A P11D for any benefits you’ve not payrolled A P11D(b) to report Class 1A National Insurance contributions on the cash equivalent, or relevant amount for OpRA (Optional Remuneration Arrangements) including the payrolled ones. You’ll also need to give your employee a letter telling them which benefits were payrolled and tell them the amount of the benefit. If you didn’t register online on or before 5 April 2018 to payroll benefits in kind, then you’ll need to send; A P11D for all benefits A P11D(b) to report Class 1A National Insurance contributions on the cash equivalent, or relevant amount for OpRA If you’ve payrolled informally (without registering online) then you’ll need to put a note on the P11Ds to show which benefits have been payrolled. You need to write on each P11D, not just on one or on the P11D(b). You can register online on or before 5 April 2019 to payroll benefits for 2019-20 Payrolling Employees: Taxable Benefits and Expenses. If you do this, you won’t need to file a P11D for 2019-20.
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