| HMRC have published a
consultation document on payrolling
benefits in kind. The idea is that
payrolling benefits in kind would remove
the need for employers to complete P11Ds.
Whilst this may seem like a good idea,
particularly to HMRC, who would save
massive administrative costs, there are
many potential problems.
For example, how would a business which
provides a company car to an employee
cope, when the P11D calculations and
reporting is currently done by their
adviser after the year end? If the
calculation is done at the beginning of
the year, how will any changes to the
company car be revised? How will
reimbursed expenses be dealt with,
particularly where an employee is able to
claim tax relief personally?
The annual P11D/P9D/P11D(b) returns,
together with the associated procedures,
and the P46(CAR) could be abolished.
Instead employers would be required to
record on form P11 and report details of
the value of the benefits and expenses
they provide on a modified P14/P60, with a
summary of the Class 1A NICs due being
provided on the P35. There would be no
need to report details of new company cars
or changes in-year on P46 (CAR).
However, this system would involve
information being reported earlier and tax
due would need to be paid over sooner. For
employees the most noticeable change would
be in relation to the timing of payment of
the tax due on their benefits and
expenses.
As part of the proposals HMRC are also
looking to abolish the £8,500 threshold,
thus bringing all employees within the
charge to tax on all benefits!
Whilst the plans to abolish P11Ds are
not intended to take place until 2011, the
removal of the £8,500 threshold is
expected to take place before that.
Of course, we will keep you informed of
any developments.
Internet link:
Consultation document |
