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Payrolling Benefits and Agents
"its is understood that Agents cannot register on behalf of a client" two thoughts come to mind
1) Why is that do you think?
2) Says it all I suppose.
I might add
HMRC don't really like us do they.
Tony Margaritelli - Chair ICPA
Why do HMRC seek to prevent professionals from doing their job?
It is understood that agents cannot register on behalf of a client
This is quite insane. I can understand that HMRC may have temporary difficulties in allowing agents to perform certain tasks that have already been hard-baked into existing taxpayer-facing systems (at least until AOSS is expanded to all taxes), but the payrolling of BiK is a completely new process and should have been designed with agents in mind from the start.
What's next? Will doctors be prevented by the Dept of Health from administering their diabetic patients' insulin injections? Will solicitors be prevented from applying for property searches on their clients' new homes?
Why?
I don't deal with much payroll so excuse me if the following is either obvious or misunderstood.
In the industry I work in, Financial services, almost all of the staff have P11d type benefits, myself included. Each year, when HMRC send me my tax code notification for the upcoming tax year, it includes an adjustment for the P11d benefits based on the last P11d received. This is adjusted, usually in August, when the next P11d is received to allow for any over or under payment from the previous tax year. I get a copy of the P11d too.
How is this different from the proposed Payrolling benefits other than it can eliminate the need to issue P11d to employees if all benefits are payrolled ?
Timing and PAYE deduction accuracy
I don't deal with much payroll so excuse me if the following is either obvious or misunderstood.
In the industry I work in, Financial services, almost all of the staff have P11d type benefits, myself included. Each year, when HMRC send me my tax code notification for the upcoming tax year, it includes an adjustment for the P11d benefits based on the last P11d received. This is adjusted, usually in August, when the next P11d is received to allow for any over or under payment from the previous tax year. I get a copy of the P11d too.
How is this different from the proposed Payrolling benefits other than it can eliminate the need to issue P11d to employees if all benefits are payrolled ?
In year payrolling of benefits in kind (BIK) reduces the chance of tax under or overpayments for employees, because BIK will be correctly taxed continuously through the year without the need for a year end P11D stating different higher or lower BIKs.
And pigs will fly
I don't deal with much payroll so excuse me if the following is either obvious or misunderstood.
In the industry I work in, Financial services, almost all of the staff have P11d type benefits, myself included. Each year, when HMRC send me my tax code notification for the upcoming tax year, it includes an adjustment for the P11d benefits based on the last P11d received. This is adjusted, usually in August, when the next P11d is received to allow for any over or under payment from the previous tax year. I get a copy of the P11d too.
How is this different from the proposed Payrolling benefits other than it can eliminate the need to issue P11d to employees if all benefits are payrolled ?
In year payrolling of benefits in kind (BIK) reduces the chance of tax under or overpayments for employees, because BIK will be correctly taxed continuously through the year without the need for a year end P11D stating different higher or lower BIKs.
Only in the very largest organisations with good HR depts and excellent payroll staff is there any chance that in year payrolling of BIKs will result in month by month accuracy.
The only reason this is happening is it's another way for HMRC to get some other mugs to do their job for them.
Payrolling can be great at times.
My wife works for the NHS, she gets paid a mileage rate that is more that what HMRC allows. (Due to the rate covering the cost of business car insurance for people that do a little work mileage, people that drive more get a lower rate.)
The expenses are paid as part of the payrole and shown on the payslip, but she gets a P11D for £10 or £20 pounds of benefits each year.
ALL the information to do payroling is already in the software.
I agree that for small employers payroling may be very hard, but for LOTS of employees of large employers it can completely avoid the need for P11Ds.
Employers are required to write to employees explaining the payrolling move. A sample letter is provided within the guidance that can be used.
I have been unable to locate the sample letter mentioned. Does anyone have he link available please?