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Payrolling of benefits: the future of P11D reporting

07 February 2022 / Tim Bridgett
Issue: 4827 / Categories: Comment & Analysis
(Pay)roll with it

Key points

  • HMRC now requests employers to report benefits in kind on individual P11D forms or P11D lists as digital submissions or through ‘payrolling’.
  • Payrolling in its current form is not appropriate for all employers but has many benefits over ‘legacy’ processes.
  • Payrolling allows for income tax due on a benefit to be collected and paid through real time information.
  • There is a mistaken perception by employers and employees that payrolling poses a risk of double taxation of the benefit.
  • Employers need to register for payrolling before 6 April 2022 for it to apply for the 2022-23 tax year.
  • Employers must check with their payroll providers that their software is suitable for payrolling.

From my time as a ‘Schedule E compliance officer’ back in the days of the Inland Revenue the P11D form (and the now forgotten P9D form) have held a special place in my heart. Looking back...

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