Expenses and Benefits – Questionnaires of payrolling benefitsWednesday, June 17th, 2009
HMRC is continuing to gather information about the tax and NICs issues raised by the proposals to process the provision of benefits-in-kind through the payroll rather than by P11D/P9D reporting.
To learn about the experiences of employers who already use this method of taxing benefits under informal arrangements with their tax offices, HMRC has produced two questionnaires, one aimed at employers and another at agents and bureaux. HMRC provides assurances that the information collected will only be used for research, i.e. not for compliance purposes.
The questionnaires reveal many of the potential issues and problem areas with payrolling of benefits, such as:
- expenses and benefits that are, and are not, taxed through the payroll, and why
- whether some employee or employee groups are excluded, and why
- situations where estimates of value have to be made
- whether there is any special treatment for ex-pats
- what is reported, if anything, at the year end
- how Class 1 and 1A NICs are calculated and accounted for
- how changes to benefits are handled if they occur early in the year, mid-year, or late in the year
- whether any lower limit to take-home pay is operated
- how employees entitled to P9D reporting are identified
- how staffing levels would be affected if P9Ds/P11Ds were completed instead
- how long it took to introduce payrolling initially
- how much time is spent handling employee enquiries
- what information is given to employees at the start of, during and at the end of the year, and when they leave
- what information has been asked for by employees in connection with tax credit claims.
Expenses and benefits: payrolling policy review questionnaires
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