Payrolling online service now open for registration

12 October 2015

From 6 April 2016 you will need to use the new Payrolling Benefits in Kind (PBIK) online service if you want to payroll your expenses and benefits. This new service replaces the current informal payrolling process and if used, P11Ds for employees will no longer need to be submitted to HMRC.

You can now register to use the Payrolling Benefits in Kind online service, either to start or continue payrolling in the 2016 to 2017 tax year. Registration for the new service must be completed by 5 April 2016.

The only benefits you can’t payroll using this service are:

  • vouchers and credit cards
  • living accommodation
  • interest free and low interest (beneficial) loans.

If you are already payrolling these benefits you can continue to do so but you must still report them on a P11D.

You will need to align your payroll software and register to payroll using the new service by 5 April 2016. You won’t be able to register after this date for the 2016 to 2017 tax year as HMRC can’t process changes in-year. To avoid being sent multiple tax codes for your employees you need to register before the annual coding process which usually starts around 21 December.

If you don’t register the benefits and expenses you’ll have to report them on a P11D. From the 2016 to 2017 tax year HMRC will no longer accept informal reports of employee benefits, sometimes referred to as lists.

All payrolled benefits and expenses need to be included when you report your payroll information in a Full Payment Submission.

P11D (b) forms must still be completed, including the total benefits and expenses provided, whether or not they’ve been put through your payroll. However, if you payroll car and car fuel benefit you mustn’t complete P46 (Car) forms as you’re deducting the tax due on these benefits at source.

Using the online service

You can:

  • choose which benefits and expenses you want to include in the payroll for the following tax year
  • add or remove benefits and expenses
  • exclude employees who receive benefits or expenses but don’t want them payrolled - for these employees you must continue to report the benefit or expense on a P11D.

Section M on the P11D is used to report other items. For payrolling this needs to be treated with an all or nothing approach - you must either payroll all items that usually fall within Section M or none. Income Tax paid but not deducted from a director’s remuneration needs to be selected and payrolled as a stand-alone benefit within the PBIK service.

When you register HMRC will automatically:

  • identify which of your employees have the selected benefits or expenses in their tax code
  • remove the selected benefit or expense and issue an amended tax code.

You only need to register to payroll each benefit once – unless you remove the benefit your registration will be carried forward every year. Once the tax year has started you must continue to payroll the benefit or expense you’ve registered for the whole tax year or for as long as you provide it.

To use the service you’ll need your Government Gateway ID.

Access to the online service and what to do if you currently use the informal payrolling process can be found on GOV.UK.

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