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A good start to a new tax year?

6th Apr 2018
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With a heavy heart I opened my web browser this morning (6 April 2018) to discover that overnight HMRC have sent me over 150 emails to read - some relevant, some not so, many completely irrelevant.  However the first one that I open seems to have a problem at it's heart and a potential to mislead - (https://www.gov.uk/government/news/employers-need-to-provide-details-for...) - it is headed "Employers need to provide details for all Benefits in Kind - New rules for Optional Remuneration Arrangements take effect today". It then goes on to state that "Employers need to report all Benefits in Kind (BiKs), including those under the Optional Remuneration Arrangements (OpRAs), to HMRC on form P11D from today (6 April 2018), unless they are registered to voluntarily payroll benefits" and ends up pointing out that "The closing date for employers to send P11Ds to HMRC is 6 July 2018".  Now this could lead unsuspecting employers, and perhaps practitioners who have not kept pace with the subtle way that the new rules are being altered, to believe that OpRA benefits - the benefits caught by the salary sacrifice rules introduced without parliamentary debate in Finance Act 2017 - must ALL be reported on the P11D due to be filed in a few months time.  This is not so.  The new rules commenced, it is true, on 6 April 2017 but for the tax year just finished, 2017/18, the only OpRA benefits that need to be reported on form P11D by 6 July 2018 are those which are provided under NEW arrangements entered into from 6 April 2017 onwards - existing OpRA arrangements are affected from today onwards, as the email is trying to communicate, but these will be shown on the form P11D for the current tax year which is 2018/19 and due to be filed by 6 July 2019.

It is true that employers will need to be recording these benefits from today onwards, so that the 2018/19 P11D can be correctly filed, but the implication that these benefits will need to be recorded this year on the 2017/18 P11D is, of course, incorrect.  The email does point out that these benefits do not have to be shown on P11D if they are being payrolled but it is important for employers to realise that to be able to use payrolling of benefits, to avoid filing a form P11D, requires an application to HMRC BEFORE the beginning of the tax year.  It is too late to avoid filing the P11D for 2018/19 by starting to payroll benefits on a voluntary basis now - if this is done the P11D for 2018/19 would still need to be completed but endorsed clearly that the benefits in question have been payrolled.  An application to HMRC to start voluntary payrolling made from today onwards would only be effective to avoid filing a 2019/20 P11D.

It used to be possible, before the new Gov.UK system, to email the originator of the communication within HMRC to point out misleading implications like this but sadly that facility seems to have disappeared.  I am now going to open up the rest of the emails and hope that they are also not potentially misleading!

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