MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Payrolling benefits Q: We payroll benefits and have submitted the P11D(b) online using HM Revenue and Customs’ (HMRC’s) Government Gateway. Do I also need to send a paper version of the form P11Db to HMRC? A: As you payroll your benefits, there’s no requirement for P11Ds to be completed and so your online submission of P11D(b) is all that’s required. Can you report agency worker costs on a pay as you earn (PAYE) settlement agreement (PSA)? Q: Our business invited agency workers to a staff event. We report these costs in our PSA. Can we include the agency workers (who aren’t employees) in the PSA calculation? A: The employer organising the PSA for direct staff may want to also include
third-party employees in the PSA, for example, where they’re invited with direct staff to a function not covered by the exemption at Section 264 of the Income Tax (Earnings and Pensions) Act (ITEPA) (see Employment Income Manual (EIM) 21690). No objection should be raised if the employer includes these third-party employees in the PSA being made for direct staff. So, yes, an employer may include non-employees within their PSA computation if they so wish. Please see here for clarification: https://ow.ly/ uPes50Pu7nT. Employees who pay no tax and PSAs Q: Please could you advise whether expenses and benefits (staff entertainment and gifts) for employees earning below the personal tax allowance must be reported in the PSA submission? A: HMRC guidance states, “Where an employee pays no tax with the employer, they should be included as being liable at their first chargeable rate of tax, the basic rate if England, Northern Ireland, and Wales, and starter rate if resident in Scotland, for the PAYE Settlement Agreement calculation purposes. For example, if an employee in England pays no tax on their earnings with an employer — because their earnings are lower than
How should the reimbursement of eye tests and glasses be treated for payroll purposes?
their personal allowance, and they have a benefit included in a PAYE Settlement Agreement — the rate applied would be the basic rate (20% in 2022 to 2023).” Please see the guidance here: https:// ow.ly/14H950PvYQJ. Exceeding HMRC’s approved mileage rates (AMRs) Q: We have a situation where a staff member has claimed their mileage at the incorrect rate for their company car, resulting in an overpayment. How should I report the excess payment above HMRC’s mileage rates? A: If you haven’t agreed with HMRC to pay above the AMRs, you won’t hold an exemption, so the amounts exceeding the AMRs are treated as cash earnings. Therefore, they must be processed via
Do you include expenses and benefits for employees earning below the personal tax allowance on a PSA?
| Professional in Payroll, Pensions and Reward | September 2023 | Issue 93 12
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