PAYROLL news
Payrolling of benefits in kind (BiKs) to become mandatory HM REVENUE and Customs (HMRC) confirmed, in a policy paper, that it will mandate the reporting and paying of income tax and class 1A National Insurance contributions (NICs) on BiKs via payroll software. This will be introduced from April 2026. The policy paper can be accessed in full here: https://ow.ly/ RqEP50QvPkS. It’s hoped that this move will help to reduce the administrative burden placed upon both employers and HMRC, as the process for reporting and paying tax on employment benefits will be simplified. Ahead of this huge change, HMRC has
confirmed it will engage with stakeholders (your very own CIPP being one of them!) around how it will all work in practice, and will ensure there are no unintended consequences of mandating the payrolling of BiKs, which may not have already been considered. Guidance on the topic will also be published ahead of the changes. Currently, there are two options for reporting BiKs, one being payrolling and the other being via P11D submissions. The P11D submission process (commonly referred to these days as the ‘legacy process’) means that employees’ tax codes are often adjusted mid tax-year and can cause confusion, as the deadline for reporting P11Ds to HMRC isn’t until 6 July in the tax year following the tax year in which the employee received those benefits. This means there can be a substantial amount of time between an employee receiving benefits and paying tax on those benefits. The CIPP wants to address the following issues with HMRC: l we want to ensure the calculation methods for employer-provided living accommodation and beneficial loans are updated and can be processed via payroll software l working sheets must be available to employers and agents, to assist with the calculation of values to be payrolled l there needs to be sufficient time given for changes to be made to payroll systems and for rigorous checks to be carried out l making payments of class 1A NICs in real time should be made possible, to eliminate the need for P11D(b)s. The CIPP’s policy and research team will be asking for your input on this important area in the future, so keep your eyes out for ways to get involved.
Employment tribunal fees to return? THE MINISTRY of Justice has published a consultation which considers whether employment tribunal (ET) and Employment Appeal Tribunal (EAT) fees should be re-introduced. You will be aware of the nature of ET and EAT cases if you read the employment law pages of this magazine. To read the consultation in full, please go here: https:// ow.ly/F4es50QvPUC.
Diary dates
5 March 6 March
Last day of tax month 11 First day of tax month 12
Last day for submitting a real time information employer payment summary to apply to tax month 11 Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by non-electronic method Deadline for payment of PAYE and NICs etc to HMRC’s Accounts Office by electronic method
19 March
22 March
5 April 6 April
Last day of tax month 12
First day of tax month 1 2024/25
| Professional in Payroll, Pensions and Reward | March 2024 | Issue 98 10
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