“We believe the recommendations we have made better reflects today’s working practices. Our quick wins will help, but the bigger work will begin to fundamentally change the way benefits and expenses are reported, making it easier for everyone. There is a big target here: the 4.5 million P11Ds completed annually, which we think could be reduced by 90 per cent or more.” The report builds on an interim OTS report published last summer which set out a series of quick wins. These included: streamlining the cycle to work scheme; aligning tax and NIC treatment of mileage rates over 45p; changes to HMRC forms; and, publishing a list of items that automatically qualify for a ‘dispensation’ (meaning no benefit will arise for employees).
The Policy team will be reviewing the ‘91 page' report and will provide a summary on the detail shortly.
Notifying HMRC if you payroll benefits
10 February 2014
If you payroll benefits in kind, a reminder that you should inform HMRC in advance using their online form ‘Notification of Payrolled Benefits’.
With thanks to Mike Nicholas for raising with the policy team that HMRC’s guidance appears to have been updated without notification. The following is what employers should do if they payroll benefits: EMPLOYERS SHOULD inform HMRC in advance if they intend submitting a batch of P11D returns for employees who have had all their expenses and benefits taxed via the payroll. They should do this online using HMRC's online form Notification of Payrolled Benefits. If employers do not do this, their employees will be taxed twice. The entries in the '1A' boxes in the P11D return normally make up the total value of all expenses and benefits liable to Class 1A NICs, which is then entered in the relevant box in P11D(b) return. However, for payrolled expenses and benefits where there is an 'amount made good or from which tax deducted' box, the entries in the '1A' boxes will not provide the correct value on which Class 1A NICs are payable. In these cases the employer will need to recalculate the total value of all expenses and benefits on which they are liable to pay Class 1A NICs, ensuring the actual amount of the expense or benefit included in payroll is used as opposed to the net 'cash equivalent' amount after payrolling has taken place.
There are separate online returns for employer and agent notification of payrolled benefits.
For further information, refer to HMRC guidance .
Beneficial loan arrangements - official rate of interest for 2014-15
13 February 2014
The Official Rate of interest, used to calculate the income tax charge on beneficial loans, has been announced for tax year 2014-15.
The new Official Rate of interest of 3.25% will take effect from 6 April 2014.
You can view the tables of average and actual official rates on HMRC’s website .
No more paper receipt hoarding for UK business
31 March 2014
CIPP Policy News Journal
16/04/2014, Page 149 of 519
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