Minor errors in the EXB and FPS Schemas for company cars
12 March 2018
Following a publication about minor drafting errors in the EXB Schema for 2017-18 and the FPS Schema for 2018-19, members contacted the policy team with concerns about the legislative irregularity.
The CIPP arranged a conference call between representatives of HMRC and the CIPP, summarised as follows:
HMRC confirmed that its guidance to return a negative P11D value in the particular circumstances involving capital contributions would stand and will apply for the 2017-18 and 2018-19 tax years. Where the company car benefit is being payrolled then the payrolled benefit will be a negative value resulting in the employee’s taxable pay being reduced.
HMRC further confirmed that an affected employee’s tax code would be increased (as opposed to the decrease that usually results from a P11D submission) and that employers would be able to reduce the amount on which Class 1A NICs are calculated by the negative P11D / payrolled value.
HMRC were pressed as to why 2019/20 would be the earliest point at which a more satisfactory resolution of the problem could be reached. HMRC stated that primary legislation, not secondary legislation, was required to resolve the matter. This being a taxation issue, the necessary primary legislation is a Finance Bill/Act.
This is yet another prime example of how important it is that consultation with stakeholders happens well in advance of an implementation date. And if primary legislative changes are required then this should be identified early in the consultation process. The CIPP continue to request at least an 18 month lead time from HMRC, primarily to ensure that payroll software developers can update their products in a timely manner.