The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
For 2017-18 HMRC is updating the software requirements for car data for those voluntarily payrolling benefits. These new requirements collect information about the car’s details, such as CO 2 emissions and the list price.
I am using an intermediary / payroll bureau / agent to do my payroll, what do I need to do?
You need to make sure that they are aware that your employees are using salary sacrifice and that they use the correct taxable values as described above.
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Class 1 NICs liability disregard for certain trivial benefits in kind 16 December 2016
Regulations were brought in to effect from 28 November 2016 to disregard from earnings any exempt trivial BiKs that attract a Class 1 NICs liability, such as certain non-cash vouchers.
The disregard will only apply to qualifying trivial BIKs provided on or after the 28 November 2016 and will not be retrospective.
Background
6 April 2016 saw a new exemption brought in that removed liability to income tax for low value ‘trivial’ benefits in kind (BiKs). Prior to this date, an administrative practice was needed for employers to reach agreement with HMRC that certain BiKs could be treated as trivial and so would not need to be reported to HMRC at the end of the tax year. This was replaced by the statutory exemption replaces administrative practice.
Guidance on the new exemption can be found in Employment Income Manual 21860 .
General conditions
To qualify as a ‘trivial BiK’ conditions A-D must be met: Condition A – the BiK must not be cash or a cash-voucher; Condition B – the BiK must cost £50 or less; Condition C – the BiK must not be provided as part of a salary sacrifice or other contractual arrangement; and Condition D – the BiK must not be provided in recognition of services performed by the employee as part of their employment, or in anticipation of such services.
There is no limit to the number of trivial BiKs that can be provided to an employee in a tax year where all conditions are met, unless Condition E applies.
Close companies
Condition E applies an annual £300 cap where a trivial BiK (that meets conditions A to D) is provided by an employer that is a close company to an employee who is a director or other office-holder of the close company or member of the family or household of a director or other office-holder of the close company.
Former employees
Changes have been made to the ‘Employer-Financed Retirement Benefits’ (Excluded Benefits for Tax Purposes) Regulations 2007 (‘the EFRBS Regulations’). The regulations came into force from 1 December 2016 and have effect from 6 April 2016. This ensures qualifying trivial BiKs provided to former employees, or to members of their family or household, also benefit from the exemption and are subject to the close company cap.
Further guidance can be found in the Employment Income Manual 15033 .
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