The Chartered Institute of Payroll Professionals
News On Line
We realise that payroll professionals are exceptionally busy at the current time, but the Quick Poll should take less than a minute to respond to, and will feed into research on the important topic of AE. Thank you in advance for your responses.
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The CIPP’s Payrolling of Benefits survey 24 June 2021
The CIPP’s Policy team regularly carries out research on the topics that are impacting the work of payroll professionals the most. We are currently looking for your feedback and views on the topic of the payrolling of benefits, and there is still time for you to respond to our survey. We are currently working in conjunction with HMRC to assess how widespread the practice of payrolling benefits is. Do businesses use this method of reporting taxable benefits, or do they still use the ‘legacy’ P11D process? It could be the case that a business utilises a combination of the two methods. The survey on the payrolling of benefits also explores the reasons behind why businesses use the process or processes that they do. We want to understand how widely deadline dates are known, and to establish how useful the guidance on the payrolling of benefits is, or if individuals are even aware that it exists! We know that payroll professionals are extremely busy, but we would really appreciate you taking the time to respond to this survey. It should only take three minutes to complete, and you have until 30 June 2021 to do so. Thank you in advance for all of your input.
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Clarification: NI treatment of payrolled benefits in kind 29 June 2021
In the June 2021 edition of the CIPP’s Professional magazine, an article discussing Payrolling of Benefits in Kind stated*:
“employee benefits are reported in real time, and tax and class 1A NICS applied to them at the same time they are received.”
The CIPP recognises that this statement could be misleading and apologise for any confusion caused. For clarity, when benefits are processed through the payroll, they are subject to tax but not class 1A NI. However, by payrolling BIKS employers could (and maybe s hould) calculate, charge and accrue in the organisation’s financial accounts a cost/liability for the amount of class 1A NICs due. The only pay subject to Class 1A NICs from the employer in real time are termination payments that exceed £30,000 and sporting testimonials of more than £100,000. Class 1A NICs on all benefits in kind are, payable on 19 th or 22 nd July (depending on the payment method) in the year following the tax year the benefits were provided in.
CIPP comment
Whilst Class 1A NICs are not currently payable on benefits in kind in real time, is this something that could change going forward? The ability to pay Class 1 A NICs in real time has been proven with the amendments to termination payments and sporting testimonials. This could encourage more businesses to start payrolling benefits by removing the requirement to submit a P11D(b) each year.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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