Benefits in Kind / Company Cars

From the start of the 2016/17 tax year employers could choose to account for the tax on benefits in kind through PAYE each payday.   For more details review the HMRC website at: https://www.gov.uk/guidance/paying-your-employees-expenses-and-benefits-through-your-payroll

In summary this option increases the employees ‘taxable pay’ to include the benefit in kind rather than the HMRC reducing the employees tax code and avoids the need, in some circumstances, to submit a P11D.

From 17/18 you now have the option to record company car details against a nominated benefit in kind. Recording these details is optional currently, even if you have chosen to payroll Benefits in Kind, though is likely to become mandatory in the future.

Employee Maintenance– either when adding new employees or via the Switches maintenance screen.  When an employee is confirmed as using the Company Car BiK switch a pop-up screen will allow recording of the company car details.

Details prompted will be familiar to those used to recording these details on line via the HMRC website. If a car is withdrawn / replaced during the tax year you should update the withdrawal dates and create a new entry for the new car – up to four changes of car are supported for the employee within the tax year.

Installation

Payroll System Profiles

Within the Payroll System Profiles Payment and Deduction Table you can flag an extra payment switch as being a Benefit in Kind.

if you have a Benefit in Kind switch which is used for Company Car’s note the letter (number) and then set this