As we approach the start of the new tax year, it’s essential to ensure that your payroll is set up correctly to payroll benefits, ensuring your employees are taxed in real-time. If you’re an employer who wishes to payroll benefits for the first time in the 2023/24 tax year, you must register with HMRC before April 6th, 2023. The clock is ticking, and time is running out!
Thankfully, seven years ago, HMRC introduced the ability for employers to payroll benefits classified as benefits in kind. This change in the tax system has enabled employers to revolutionise the way employees are taxed on such benefits, with significant advantages that businesses can reap.
The days are gone when employers needed to submit P11D submissions at the end of the tax year to account for taxes on benefits in kind. Now, with pay rolling benefits, employees pay the taxes in real-time in the month/year in which they receive the benefit. This process has several benefits, such as eliminating the need for P11Ds for employees, reducing the risk of errors, and ensuring that employees pay taxes in real-time.
Moreover, payrolling benefits offers further benefits, such as all benefits visible on employees’ payslips, and there are no surprise tax codes issued the following year. It ensures transparency for both employees and employers alike, and employers can keep track of any benefits in kind given to their employees.
While the registration is currently voluntary, employers must sign up before the start of the new tax year, by April 5th, 2023, to ensure that they can start payrolling benefits from the beginning of the new tax year. This process may seem daunting, but Outsourced ACC payroll team can manage the HMRC registration process and help you with the required information to set up your payroll for benefits. Please contact us on 0208 249 6007 for more information, and we will guide you through the process.
In conclusion, it’s essential to keep up to date with the changes in the tax system and ensure that your business is compliant with HMRC regulations. Payrolling benefits is an excellent opportunity for businesses to streamline their payroll process and ensure that their employees are taxed in real-time. Don’t let the registration deadline pass you by; take action today!