HMRC is encouraging employers to consider payrolling the expenses and benefits they pay to staff.
The advantages of payrolling expenses and benefits are that employers will no longer need to submit multiple P11Ds, and employees will be more likely to pay the correct tax due on their benefits during the tax year.
Employers still need to work out Class 1A National Insurance contributions on benefits and complete a single P11D(b) form for the year.
Employers can payroll benefits and expenses as long as they’ve registered with HMRC before the start of the tax year. To use this method for the 2022 to 2023 tax year, they will need to register online before 6th April 2022.
Go online for more information
If unable to payroll expenses and benefits and still submitting P11D and P11D(b) forms on paper, employers should consider submitting these online.
Filing online is considered to be faster and more efficient, more secure, and less likely to get lost than submitting a paper form in the post. It also means HMRC can process information quicker and update employees’ tax codes and records sooner.