Don’t forget the payrolling of benefits deadline

18 February 2022

Although we are still only in February, that 6 April new tax year date will soon be here.

Within the latest edition of the Employer Bulletin, Her Majesty’s Revenue and Customs (HMRC) discusses the deadline for payrolling benefits for tax year 2022-23. Organisations wishing to use this process must register online by 5 April 2022. 

Most benefits can be payrolled, apart from living accommodation and interest-free or low interest loans. 
HMRC recommends payrolling benefits in kind for several reasons:

•    It’s less time consuming and less complex
•    Employers are no longer required to submit P11D and P46(car) forms to HMRC
•    HR and payroll teams are likely to receive fewer tax queries from employees due to simpler tax codes, and tax codes changing less frequently
•    Tax deductions taken through monthly payroll will be more accurate
•    There are fewer forms for employers to fill out at year-end.

Organisations will still be required to submit P11Ds for any benefits that haven’t been payrolled. They will also need to submit a P11D(b) to advise HMRC about the employer class 1A National Insurance contributions (NICs) due on all benefits (inclusive of the payrolled ones). The class 1A NICs due will need to be paid by 22 July 2022 (if paying electronically).

Employers will need to advise employees which benefits are payrolled, and the amount of those benefits.

Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.