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03/05/2016

Critical Updates, Issue 78, April 2016

Extending the real time collection of tax on benefits in kind: voluntary payrolling

HMRC have announced that they will amend the Regulations in the summer of 2016 to enable employers to choose to payroll non-cash vouchers and credit tokens from 6 April 2017.
 

 

Forms P11D and S336 claims

The submission of a S336 claim is the responsibility of the individual employee but when this is attached to the original paper P11D and submitted by an employer on behalf of an employee, the S336 claim and the P11D should be sent to: HM Revenue & Customs (NIC&EO), Room BP2101, Tynemouth House, Benton Park View, Longbenton, Newcastle upon Tyne NE98 1ZZ.
 
On receipt, HMRC will keep the S336 claim attached to the P11D to ensure the two are processed together at the same time.
 
Where a S336 claim is submitted separately on a form P87, form P810 or in letter format and is not attached to an original P11D, it should be clearly headed S336 CLAIM and have a copy of the P11D attached if possible (the P11D should be noted as a copy). This will help HMRC to identify these cases as quickly as possible and send them for processing. The S336 claim with the copy of the P11D attached should be sent to: Pay As You Earn and Self-Assessment, HM Revenue & Customs, BX9 1AS.
 
 

Expenses exemption replaces dispensations from 6 April 2016

From April 2016 a change in legislation means dispensations will cease to exist. Employers who wish to pay or reimburse employees' expenses after 5 April 2016 are now able to do so without deducting tax or NICs from those payments, where the expense would qualify for a deduction and meet the conditions for payment.
 

 

Trivial benefits in kind

From 6 April 2016 a new exemption removes liability to income tax for low value Benefits in Kind ('trivial BiKs'). This new exemption is being legislated as part of the Finance Bill 2016 (FB16) and is subject to parliamentary approval. The previous administrative practice where employers could agree with HMRC that certain BiKs could be treated as trivial and did not need to be returned to HMRC at the end of the tax year no longer applies.
 
To qualify as a 'trivial BiK' conditions A-D must be met:
 
Condition A - the BiK must not be cash or a cash-voucher;
Condition B - the BiK must cost £50 or less;
Condition C - the BiK must not be provided as part of a salary sacrifice or other contractual arrangement; and
Condition D - the BiK must not be provided in recognition or services performed by the employee as part of their employment, or in anticipation of such services.
 
There is no limit to the number of trivial BiKs that can be provided to an employee in a tax year where all conditions are met, unless Condition E applies (see below).
 
Close companies
 
Condition E applies an annual £300 cap where a trivial BiK (that meets conditions A-D) is provided by an employer that is a close company to an employee who is a:
 
• director or other office-holder of the close company, or
• member of the family or household of a director or other office-holder of the close company.
 
 

Road fuel scale charges from 1 May 2016

The VAT road fuel scale charges are amended with effect from 1 May 2016. Businesses must use the new scales from the start of the next prescribed accounting period beginning on or after 1 May 2016. See the valuation table at
www.gov.uk/government/publications/vat-road-fuel-scale-charges-table
 

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