Policy hub
all trust the company to update records more quickly than tax codes were updated for car changes in the past – [which] caused numerous under/overpayments for our staff and much unhappiness especially when it happened around year end as it took them far too long to resolve.” ● “I sent out clear information to all the employees who had company cars, and made sure they understood how it would change their code. Most of them are delighted that this year they will be able to do their tax returns early and not have to wait until July for a P11D.” ● “The switch to payrolling was comprehensively communicated to employees and all questions were addressed before the change.” ● “After initial change, cars/fuel queries reduced to nil”. ● “We need to be informed early that someone has changed their car.” ● “Some of the spreadsheets/processes required some ‘fine-tuning’ in order to ensure complete reliability of the data being fed though to payroll. Also, timing issues with mid-month leavers and pro-rata calculations of private medical insurance.” ● “Voluntary payrolling is more time- consuming when non-payroll staff are calculating the amounts to be payrolled as they are not used to working to payroll timetables. We are still refining the calculation system.” ● “Registered on line with HMRC, informed staff I would be payrolling their benefits in 2016/2017 and updated my spreadsheet with the increased amounts for 2016/2017 tax bands. I worked out what the tax codes for the employees should be with the car benefit removed and new personal allowances for the new tax year and asked them to check with me when they received their amended codes. The majority of the codes were correct; any that did not match mine were further
investigated with the employee and HMRC and duly corrected. As people have changed their cars I have recalculated their car benefit and changed the payroll to suit. I am running my P11D software also this year as a double check and to make sure the Class 1A [NICs are] correct.” ● “At the moment it does not save me any time, but the employees are happy that they are being taxed in real time. I have set up a spreadsheet to calculate the [NICs] and will discontinue using P11D software after this year, [which] will be a cost saving and I will also free up time by not having to produce and hand out P11Ds.” ...still early days, and a complete cycle of tax year Reasons for not taking up voluntary payrolling mainly comprise caution, tradition, lack of time/resource as illustrated by the following comments: ● “We did not [payroll] as an informal practice and did not want to test it in the first year, therefore we would be looking at payroll benefits for the next tax year.” ● “I wanted to see the change bed in and make sure that the process and HMRC did not change things post roll out…” ● “The team leader before preferred the P11D approach.” ● “I am also in a sole role with no resources available and need to find the capacity and time to implement this.” ● “Due to workload we have not yet moved to PBIK. We do intend to do so by April 2018.” ● “Too late for this year to register, but will look at changing this for next.” ● “Resourcing issues have stopped us doing this, but we are planning on doing it has yet to be concluded...
within six months.” ● “There were too many other things happening.” Beneficial loans Looking ahead to April 2017, amending regulations will result in the extension of the range of BIKs covered by the voluntary payrolling framework to include non-cash vouchers and credit-tokens. However, what about beneficial loans? In September, a roundtable of CIPP members met together with HMRC to discuss the challenges or otherwise of incorporating beneficial loans under the voluntary payrolling framework. Previously it had been discounted as being too challenging and too difficult. The roundtable was in agreement that given the right adjustment to payroll software (where needed) and to internal procedures, it would be possible to incorporate the precise method of calculation. The usual concerns about the timing of payroll deadlines and the efficiency (or otherwise) of internal communications, where the data might come from another department, was an issue that raised concerns and questions about whether the existing ‘late reporting reasons’ would be sufficient. When a plan comes together This year all sources of data on the subject of voluntary payrolling came together: straw polls matched quick polls, and the survey that drilled down for data added matching depth of information. Don’t you just love it when a plan comes together? But it is still early days, and a complete cycle of tax year has yet to be concluded, including the processing of the Class 1A NICs declaration – the P11D(b) return. And looking ahead there is the introduction of the company car and fuel data reporting requirements that will be introduced in to the full payment submission from April 2017. n Thank you to everyone who took the time to share their views and experiences in our survey, and also to AccountingWeb and the AAT for supporting the survey. Another survey to be held in 2017 will obtain the views and opinions of those intrepid folk who are taking the plunge now or are planning to embrace voluntary payrolling from April 2017.
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Issue 26 | December 2016/January 2017
| Professional in Payroll, Pensions and Reward |
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