“Where an employer has agreed a rate other than that set out in the Benchmark scale rate Regulations in respect of its employees within the 5 years preceding the introduction of the exemption on 6th April 2016, transitional arrangements are in place to allow the employer to continue to use that rate until the expiry of that 5 year period. Agreement to allow an employer to continue to use their previously agreed rate will be subject to the employer making a simple application to HMRC. Employers will also need to show that they have a system in place for checking that employees are incurring and paying amounts in respect of expenses, and that a deduction would be allowed in respect of those expenses.
An application to continue to use a previously agreed rate should be made in writing and will need to detail:
the rate agreed
the date of the agreement
the conditions under which the employer makes any payments the checking system that they have in place to ensure that payments are only made on occasions where employees are in fact incurring and paying expenses of the kind reimbursed that a deduction would (ignoring the exemption) be allowed under Chapter 2 or 5 of Part 5 ITEPA 2003 in respect of those amounts. See EIM30270.
Applications to continue to use a previously agreed rate will need to be made in sufficient time to allow an approval notice to be issued prior to 6 April 2016.
If an employer fails to reach agreement with HMRC for the continuing use of a bespoke rate prior to 6 April 2016, and continues to pay that rate, any amount in excess of the benchmark scale rates will be treated as a round sum allowance and chargeable to tax and NICs as earnings from the employment.” CIPP comment If you need to apply for approval then sooner rather than later is the key message as it will need to be in place by 6 April 2016. The new application form is available on GOV.UK and can be used for both new applications and for existing bespoke scale rates.
Payrolling Benefits - PBiK portal 17 February 2016
One of our members queried with HMRC some unusual functionality when registering existing payrolled benefits using the new PBiK portal.
In particular a message was being displayed when the member excluded employees on ‘Section F – Cars’. After reporting the issue HMRC confirmed that this had been fixed and registration could then be completed, this has also affected all other Sections of BIKs and has now been fixed so the error message will not continue going forward. Essentially the problem was that when an employer went to exclude an employee from a list of BiKs, when the employer pressed exclude the system was excluding everyone. So if members saw the message below at any stage on the portal when looking to exclude an employee from having a BIK payrolled, it will be worth revisiting those cases now to exclude the employees again.
Employee already excluded
This person is already excluded from having this benefit taxed through their payroll.
Exclude another employee Back to your payrolled benefits and expenses
The correct functionality identifies employees via NINO which go into a list controllable by the employer on the PBiK portal in steps 3 and 4 of 4 in that chain.
With thanks to member Paul Swarbrick for thinking of other members and alerting us to this issue.
CIPP Policy News Journal
25/04/2016, Page 154 of 453
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