The Income Tax (Pay As You Earn) (Amendment No. 2) Regulations

02 January 2018

The regulations make provisions for the calculation and reporting of a Benefit in Kind (BiKs) where the benefit is chosen instead of a cash payment under an Optional Remuneration Arrangement (OpRA) which might include a salary sacrifice or some other form of cash exchanged in return for a BiK.

The amendments to the PAYE Regulations seek to clarify the taxable amounts that need to be reported either via Real Time Information (RTI), where employers are payrolling BiKs, or at the end of the year for non-payrolling employers.

The summary of impact on employers as identified in the tax information and impact note (TIIN) suggests that employer one-off costs and ongoing costs  ‘are expected to be negligible.’ HMRC will keep under review this measure through communication with affected taxpayer groups.

The amendments which will have effect from 6 April 2018 also include provisions that introduce a requirement for employers to report car and car fuel data where they provide car BiK to their employees. The changes state what information employers are required to report and how they will submit it to HMRC via RTI processes.

The summary of impacts as identified in the TIIN estimates that employer one-off burdens will arise from familiarisation with the change in rules and are expected to be negligible. Anticipated ongoing burdens arise from affected employers being required to report details of company cars on the first payment submission in the tax year and in subsequent payment submissions where there is a change to the company car benefit provided (for example it ceases, or a new car is provided). HMRC anticipates ongoing costs to employers will amount to £1.3 million per annum.