About Payrolling Benefits

From April 2016 employers can choose to account for the tax on benefits in kind (BIKs) they provide to they are employees through PAYE each payday.

If you choose to payroll BIKs then you will need to register before 6 April 2016 to start payrolling for the tax year 2016/2017. Registering with HMRC allows you to payroll tax on benefits without having to submit form P11D after the end of the tax year. The reporting and payment of Class 1A National Insurance on benefits has not changed. If you miss the registration deadline, you cannot payroll benefits for tax year 2016 to 2017. If you have a valid reason for missing the deadline, HMRC may agree that you can informally payroll, but you must still complete form P11D at the end of the tax year and mark each P11D ‘Payrolled’. This prevents HMRC from collecting the tax that has already been deducted from your employees.

You can payroll all benefits apart from:

• vouchers and credit tokens

• employer provided living accommodation

• interest free and low interest (beneficial) loans

Further information on Payrolling Benefits and how to register can be found on the HMRC website.

Please note that IRIS Cascade will not calculate the cash equivalent of BIK’s and this will still need to be completed using your usual P11D software. Alternatively for company car and car fuel you can use the HMRC’s Online Calculator.

There is no guidance as to how ‘Payrolled Benefits’ should be processed on the employee’s payslip, so it is very much up to customer preference. Before implementing a process through the software, you will need to consider your internal reporting requirements as this may impact the way in which you configure this in IRIS Cascade.

This user guide provides two options for payrolling benefits through IRIS Cascade Payroll Web, however, if you require any further information relating to the software functionality please contact either the Service Desk or contact your Account Manager to book training.