Payroll Benefits

Question.

I am an employer and have started to pay medical insurance for my employees. How do I report this to HM Revenue & Customs?

Answer.

As you have missed the registration deadline for online reporting for the tax year 2016/17 you will need to complete both Plld & Plld 9(b) for 2016/17, deadline for submission if these forms is 6th July 2017.

 

Form P11D should be prepared for the expenses and benefits you provide to each director or employee earning at a rate of £8,500 or more per year. Form P9D is prepared for employees earning less than the £8,500 rate (including benefits). A copy of the relevant form should be provided to each employee or director.

 

The completed forms P11D and or P9Ds are submitted together with the form P11d(b). The P11D(b) is used to declare the amount of Class 1 A national insurance you are due to pay on any benefits or expenses paid to either employees or directors.

 

The rate at which class 1A National Insurance on the value of all these benefits is charged is 13.8% and is payable to HM Revenue & Customs before 19th July 2017.

 

For the 2017/18 tax year you can choose to report these benefits through the payroll. If you intend to do so then you must register with HM Revenue & Customs using the online service. Before 5th April 2017. You can payroll all benefits with the exception of: Employer provided living accommodation and taxable interest free or low interest loans (beneficial loan).

 

The benefit is still calculated the same way but is added to the employee’s salary evenly throughout the year in which the benefit is received therefore no adjustment to the tax code is required in subsequent years.

 

You will still need to work out the Class 1a NICs on the cash equivalent and complete form Plld (b) in future years.

 

The advice above is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.

 

Email: r.emery@pkffpm.com