HMRC’s Employer Bulletin for October 2017 has now been published.
Forms P11D and P46(car) for BiK provided under OpRA
Where there is an optional remuneration arrangement (OpRA), the taxable value is now usually the higher of the cash foregone or the taxable value under the normal benefit in kind (BiK) rules. This applies to all BiKs, including those which are currently exempt. HMRC’s Employment Income Manual provides further information. Arrangements entered into before 6 April 2017 retain their old treatment, but arrangements entered into since 6 April 2017, or arrangements which have been varied or renewed are taxed under the new rules.
To accommodate the new rules, HMRC is making some changes to the data that employers must submit, which means that payroll software needs to be updated before 6 April 2018.
Some of the descriptions on the form P11D data that employers submit will change:
The making good field title will not change.
For example, employers providing a BiK which costs £280 to provide where there is a salary sacrifice of £300 previously entered ‘£280’ in the cost to you and ‘£280’ in the cash equivalent fields. This will now be ‘£300’ and £300’. A new version of the P11D will be available to view shortly. There are no additional boxes. The online version will be available from 6 April 2018.
The P46 (Car) will have a new field ‘cash forgone’. This is the cash foregone for the car only (excluding fuel, maintenance or any other attributable service). This should be completed whenever there is an OpRA. A new version of the P46 (Car) will be available to view shortly.
As to reporting PAYE data in real time, HMRC will not be asking for any cash foregone figures for OpRA cases in the RTI submission.
On car data reporting, HMRC intends to publish a short technical consultation paper containing draft amendments to the PAYE Regulations soon. The amendments will explain what information employers who have registered for voluntary payrolling of car benefits are required to report and how it should be submitted to HMRC. The amendments will also clarify the taxable amounts that need to be reported under OpRA. The consultation will remain open for a period of 4 weeks. ICAEW Tax Faculty will be responding to this so do please send your comments to firstname.lastname@example.org once the consultation document is available.
Changes to Business Tax Account for employers
HMRC is rolling out changes to the Business Tax Account (BTA) to improve the accuracy and design of employer PAYE liabilities and payments information. Changes in September and October included new monthly and annual statement pages and the apprenticeship levy now being viewable within the BTA monthly breakdown.
HMRC has received a range of feedback and made changes based on comments received. These include the addition of payments information and looking into how interest is displayed. HMRC would welcome continuing feedback through the links on the BTA pages so the department can ensure that future changes work for users.
Data matters – payroll submissions
The RTI payroll data that employers submit plays a critical role in keeping their employees’ tax and NIC records up to date. Accurate information, sent on time, helps HMRC match payroll submissions to the correct record.
Data should always be submitted to HMRC on or before payday. Submissions filed after payday for employees receiving Universal Credit may result in those employees not receiving the right amount of universal credit, potentially causing cash-flow difficulties for them.
Payroll errors and late payroll can lead to increased and unnecessary contact with employers from government departments and employees. Employers can help avoid this issues by taking the following steps:
This month’s bulletin also contains articles on:
Finally, it is now possible to sign up on the government alert service to be informed that the latest edition of Employer Bulletin is available without having to cite a PAYE scheme reference number.