The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
Collecting information about car and car fuel benefit via PAYE reporting 16 December 2016
From April 2017 employers can report the car data through their FPS, if their payroll software facilitates this.
The December 2016 Employer Bulletin, Issue 63 includes the following article regarding the collecting of information about car and fuel benefit via PAYE reporting:
From April 2016, employers have been able to register to payroll car and car fuel benefits, meaning that the tax on the benefit is paid by the employee through their PAYE code in year and accounted for in real time by the employer. Those employers who payroll car and fuel benefits are not required to report information about these benefits on forms P46 (Car) and P11D. We have indicated that we are developing alternative reporting mechanisms which we are planning to introduce from April 2018. From that date these employers will be required to report information about car and fuel benefits in their Full Payment Submission (FPS). The introduction of the new requirements in April 2018 should allow employers the time they need to update their payroll systems and understand the new process to report the car data. In order to ensure a smooth transition to the new reporting requirements, employers can report the car data through their FPS from April 2017 if their payroll software facilitates this. The reporting of car data for the tax year beginning 6 April 2017 is an entirely voluntary option and not a new requirement at this time. Voluntary reporting of the data will allow us to identify and resolve any issues with employers before the introduction of a mandatory reporting requirement. Further information about reporting information on car and fuel benefits will be included in future Employer Bulletins and we will provide links to new guidance to support employers and their representatives who choose to report the information from 6 April 2017.
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Will you be impacted by the introduction of Optional Remuneration Arrangements? 11 January 2017
During December 2016 a significant number of publications appeared on GOV.UK amongst which was the Summary of Responses to the Consultation on salary sacrifice for the provision of benefits in kind.
HMRC also produced a briefing sheet to highlight how the treatment of items provided under a salary sacrifice arrangement would be changing. Included in the briefing sheet was the following:
“If you provide benefits to your employees in exchange for salary sacrifice / salary exchange or have a flexible benefits package where your employee can choose a benefit or cash, or where you provide benefits but offer your employee a cash alternative then you will be affected / need to know about these changes.”
We have highlighted the final section because you may not have been focussing on the detail of the consultation because you do not enter in to Salary Sacrifice arrangements.
The draft Finance Bill 2017 refers to such arrangements (including salary sacrifice) as Optional Remuneration Arrangements, and whilst a technical consultation is ongoing, it is clear that where there is an element of choice between cash or a Benefit in Kind (BiK), it is likely to be captured under the new rules due to begin from 6 April 2016. A common example could be the provision of a company car, but the employer offers a cash allowance in the event the employee chooses to provide their own car for business purposes. Where the cash allowance is taken there will be no impact as a result of the new rules, however once the new rules take effect the taxable value of the benefit will be the higher of the current value of the BiK or the cash foregone.
Guidance is expected to be published by HMRC at the end of January to help us all to understand how these new rules will be applied.
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