Payrolling Employee Benefits

December 10, 2017

Where an employer provides one of its employees with a benefit, most common are a company car and or healthcare this benefit is taxable for the employee. In the past employers have prepared form P11D to report which benefits each member of staff received in the given tax year.


In 2017-18 HMRC introduced ‘Payrolling Benefits in Kind.’  It allowed employers who registered for the scheme before 5 April 2017 to apply mid-year adjustments for benefits employees receive, with the exception of job-related accommodation and beneficial loans.  The advantage is that Employer’s will not need to complete Form P11D, but will still be required to complete P11D(b) and calculate the amount of Employers Class 1A National Insurance. This also means that the tax on the benefit the employee is receiving is deducted each month throughout the year, rather than an annual adjustment, especially where you have moved employer and or gain a new benefit.


We understand the scheme has been beneficial to both employers and employees. If you wish to register for the scheme for 2018-19 tax year you will need to before 5 April 2018. You will also need to ensure that your payroll software will be able to calculate the necessary values. You can apply online through your HMRC log in or in writing to: Complex Caseworker Team, National Insurance Contributions and Employer Office, HM Revenue and Customs, BX9 1BX.

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