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 |
