Get ready for payroll changes

PAYE legislation is changing from 5 April 2016. Employers who intend to or are already payrolling benefits and expenses must register with HMRC using the new online Payrolling Benefits in Kind (PBIK) service. In addition, from next April, employers who use the service and already payroll benefits and expenses won’t have to report them on a P11D.

Employers must align their payroll software and register to payroll using the new service by 5 April 2016. They will not be able to register after this date for the 2016/2017 tax year as HMRC is unable to process changes in-year.

HMRC adds that all payroll benefits and expenses need to be included when employers report their payroll information in a Full Payment Submission (FPS). In addition, P11D (b) forms must still be completed, including the total benefits and expenses provided, whether or not they have been put through the payroll. However, if employers payroll car and fuel benefits, they must not complete P46 (Car) forms as they are deducting the tax at source that is due on these benefits.

All of these changes coming in from next April can be very confusing so we would suggest that if you’re unsure, you seek professional advice.