HMRC's Payroll Benefits in Kind Service

If you are not using HM Revenue & Customs’ (HMRC) payrolling benefits in kind service for 2016/17, you need to register online before 5 April 2017 if you want to use it for 2017/18.

It is advisable to register as soon as possible as you will not be able to register after the start of the tax year.

You can choose which benefits to payroll, but once the tax year has started you will have to continue to payroll those benefits for the whole of the year – unless you stop providing them. HMRC will amend the tax codes for those employees receiving payrolled benefits. Any employee who does not want their benefits to be payrolled can be excluded.

Three-day grace period

HMRC can charge you penalties on a monthly basis if your real time PAYE submissions are late. There is no penalty for the first month in a tax year for which you make a late submission, but after that there may be a monthly late filing penalty depending on how many employees you have. This ranges from £100, for one to nine employees, to £400 if you have 250 or more employees.

HMRC has until now given you an extra three days to make submissions before applying a penalty. However, this three-day grace period is a concession and is due to end on 5 April 2017. Although HMRC has been reviewing its approach to charging penalties, you will need to take care that you file next year’s returns on time.

Automatic enrolment penalties

The Pensions Regulator has reported a huge ruse in the number of fines for not complying with automatic enrolment requirements. That is perhaps not surprising given that it is now the turn of smaller employers. Most employers with fewer than 50 employees have to automatically enrol them by 1 April 2017. Penalties can be substantial, with even the very smallest of employers facing a daily penalty of £50 if they ignore a 28-day warning notice. If you have between 5 and 49 employees, the daily penalty is £500.

Auto-enrolment is not something you can leave to the last minute. There are some key dates for completing various tasks. Illness or being short-staffed are not accepted as reasonable excuses for non-compliance.

We can help with any queries.