Registration for real time benefits in kind payrolling – are employers ready?

07 April 2016

From 6 April 2016, HMRC is introducing a new system to tax employee's benefits and expenses through payroll in real time. This is going ahead despite concerns previously raised by professional bodies that software developers may not have enough time to update employers’ payroll systems.

Employers that intend to payroll benefits and expenses (other than those listed below) must register with HMRC to use the new online Payrolling Benefits in Kind (PBIK) service before the start of the first tax year in which they wish to payroll such benefits and expenses. All current agreements with HMRC to operate an informal payrolling process will end on 5 April 2016 and so employers wishing to continue to payroll benefits will need to register for the new PBIK service. Employers using the new system will not have to report payroll benefits and expenses on P11Ds.

The new real time service will not, however, be available to payroll:

  • vouchers and credit cards;
  • living accommodation; and
  • interest free and low interest (beneficial) loans.

Employers already payrolling the above benefits can continue to do so, but must report them using forms P11D.

For more information on any of these changes, please contact your local RSM advisor.