P11Ds: Annual expenses and benefits update
As one tax year ends and another one starts, 2012 sees the last time that many employers will have to complete a large part of the end of year process, explains Diana Bruce of the CIPP.
Last month the successful roll out of the Real Time Information (RTI) pilot started, and under the new regulations submitting P14s and P35s will be a thing of the past come 2013/14. However the same cannot be said for benefits in kind as these are not included under the RTI regulations, so employers will still be required to submit forms P9D, P11D and P11D(b) following the end of the tax year.
Without doubt RTI would be the ideal solution for payrolling. This is where employers process benefits and expenses through the payroll as cash equivalent amounts, resulting in employees being taxed in real time (the whole point of RTI?) which would remove the requirement for a large element of year end reporting. However, although not on the RTI remit, consultation on the integration of the tax and NI processes is underway. One of the areas being reviewed is misalignments between tax and NICs, so the complex benefits in kind legislation will most certainly be covered. Simplification is the aim of these reviews so surely payrolling will be part of the solution but we will have to wait and see what findings and recommendations are published later this year.
The version of this article available to logged-in AccountingWEB members provides fuller details on the following aspects of annual employee benefits reporting:
- Which forms you need to complete and when.
- Dispensations/PAYE Settlement Agreements (PSAs)
- Common filing errors and how to avoid them
- Revised guidance on smartphones
- Further information and guidance available via official links.
Diana Bruce is the senior policy liaison officer for the Chartered Institute of Payroll Professionals (CIPP).