Benefits in Kind – Payrolling online service now open for registration

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Clik here to view.  The new Payrolling Benefits in Kind (PBIK) online service becomes active on 6 April 2016 and you will need to use this service if you want to payroll your BIKs and expenses. This is a replacement of the current voluntary arrangements that some companies have in place. What this means is that for some employees P11Ds will not have to be submitted to HMRC as not all BIKs will be covered by this new service.

Benefits that cannot be payrolled are:

• vouchers and credit cards
• living accommodation
• interest free and low interest (beneficial) loans.

If these benefits are currently being put through your payroll then you may continue to do so, however you will still be required to report them on a P11D.

It is not just a simple case of starting to use this process from April 2016 you will need to register, it is possible to start registering your interest for Payrolling Benefits in Kind online service. This registration is to indicate that you either wish to start or continue for the 2016/2017 tax year. 5 April 2016 is the date by which registration for this new service must be complete and you will need to align your payroll. It is advisable to be registered by 21 December 2015 this date is prior to when the annual coding process starts. Registration for this service in the 2016/2017 tax year will not be permitted after 5 April 2016 as HMRC cannot process in-year changes.

Clearly if you do not register for this service then you will have to continue to report all BIKs on a P11D.

Please note that HMRC will not be accepting informal reports of employee benefits, often referred to as lists effective 2016/2017 tax year.

The Full Payment Submission will have to have included all payrolled expenses and benefits.

It is also worth noting that P11D (b) forms will still have to be completed. You will have to include the total of the expenses and benefits provided regardless of whether or not they have been payrolled. Further, if car and fuel benefit is payrolled P46 (Car) forms must not be completed as the tax on these benefits is being deducted at source.

When using the online service

You can:

• choose which benefits and expenses you want to include in the payroll for the following tax year
• add or remove benefits and expenses

exclude employees who receive benefits or expenses but don’t want them payrolled – for these employees you must continue to report the benefit or expense on a P11D.

As you register HMRC will automatically:

• identify which of your employees have the selected benefits or expenses in their tax code
• remove the selected benefit or expense and issue an amended tax code.

There is only a need to register to payroll each benefit once that is unless you remove the benefit otherwise your registration will be carried forward year on year. The payrolling of expenses and benefits you have registered continues for the whole year once it has started or for as long as you provide the benefit.

You will need your Government Gateway ID to use this service.

Access to the online service and what to do if you currently use the informal payrolling process can be found on GOV.UK.

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In the early stages of registration and ensuring that you have all the benefits and expenses covered by the various pay elements you may well have to introduce this system should save time for those who manually write out their P11Ds. However, you will need to speak with your payroll software providers to ensure that your systems will be able to cope with the change from April 2016.

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