04 April 2024
As employers consider registering to payroll their benefits and expenses before the start of the tax year, the advisory team are receiving queries on the details that must be reported to HM Revenue and Customs (HMRC) when payrolling car benefit. Here are the reporting requirements and points for employers to consider.
An employer must register to payroll expenses and benefits by 5 April for the following tax year. Since April 2018, if an employer payrolls car benefits the details of the car(s) must be reported to HMRC on the Full Payment Submission (FPS). As the car details will be reported in real time employers are no longer required to complete a P46 (Car) form. When payrolling car benefit the first FPS submitted should include the following information:
- make and model of car
- date first registered
- carbon dioxide (CO2) emissions
- zero emission mileage
- fuel type
- car identifier
- calculated price
- date car available from
- date car available to
- cash equivalent or relevant amount
- date free fuel provided
- cash equivalent or the earnings foregone for fuel
- date free fuel withdrawn.
Details of how to complete each field can be found in the guidance here. Employers will need to check with their software provider if they can facilitate payrolling car benefit.
For employees who have received payrolled benefits, employers must provide details of every payrolled benefit received during the year and the cash equivalent. Any amount payrolled that has been provided through an Optional Remuneration Arrangement (OpRA) should also be included. There is no specified format for producing this information, it may be included on a payslip or annual statement but must be given to employees by 1 June following the end of each tax year.
When payrolling expenses and benefits the Class 1A National Insurance liability and reporting is still completed annually. The P11D(b) return must be submitted by 6 July following the end of the tax year and the Class 1A National Insurance is due by 19 July, if paid by cheque, or 22 July if paid electronically. The full guidance for payrolling expenses and benefits can be found here.
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