Voluntary payrolling of benefits in kind

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

Payrolling of benefits is the collection of tax due on the benefit by the employee through payroll in real time. The legislative framework for voluntary payrolling of benefits in kind can be found in ITEPA 2003 and the PAYE Regulations.

Payrolling benefits ― pros and cons

Payrolling of benefits is currently voluntary, so employers can choose whether they wish to payroll a benefit and which benefits to payroll with the exception of two particular benefits which are specifically excluded from the legislation (see below). The difference between payrolling a benefit and reporting it the standard way via a P11D is as follows (this assumes it is a benefit to which both tax and Class 1A NIC applies; treatment of the benefit will vary.

In what is expected to be a significant development, in January 2024 the Government confirmed it was intending to make the payrolling of benefits mandatory from April 2026. The positioning of this new potential employer obligation as a Simplification update would seem to be ‘optimistic’; especially if the new measure were implemented

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Trusts and Inheritance Tax

Transfer of assets to beneficiaries ― legal, administration and tax issues

Transfer of assets to beneficiaries ― legal, administration and tax issuesThis guidance note outlines how assets are transferred to beneficiaries and the tax consequences that flow from the transfer. Whether a payment is income or capital is discussed in the Payments to trust beneficiaries guidance

14 Jul 2020 13:52 | Produced by Tolley Read more

Personal Tax

VAT on property disposals

VAT on property disposalsThis guidance note provides an overview of the VAT treatment of selling property that is located in the UK. The UK includes Great Britain, Northern Ireland and the territorial sea of the UK. The sale of any land or building located outside the UK is outside the scope of UK

14 Jul 2020 13:57 | Produced by Tolley Read more

Employment Tax

Subsistence expenses

Subsistence expensesIntroductionSubsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel which is not to a permanent workplace. See the Travel

14 Jul 2020 13:43 | Produced by Tolley in association with Philip Rutherford Read more

��Ƶ