So you are already providing your employees with regular monthly benefits or are wanting to do this in the future. What a great employer!
Whilst some of these benefits will not be taxable (see our blog on tax free benefits), some might be.
Great news! If you are on Xero Payroll you can now offer your employees an additional benefit!
Now you and your employees can choose to spread the timing of the employee tax payments associated with the benefit out over the tax year.
This is an alternative to the current methods of:
- the employee paying all of the tax at the end of the tax year (as part of the employees self assessment return)
- you paying the tax on behalf of your employees, as we explained in our blog on PAYE Settlement Agreements
That sounds like a great idea, what do I need to do to get this set up?
The required set up, starting with registering the benefits with HMRC, will need to be done prior to the start of the next tax year (ie. 6 April 2020).
Annual P11D(b) reporting and the calculation and payment of National Insurance will always be required by the company, regardless of how the benefit is paid to the employee (payroll or not through payroll).
Small print alert: The only thing constant in tax is that the rules often change! At the time of publishing all the information is in current UK tax legislation but to be sure, get in touch and we will be happy to keep you up to date.