New course - the mandatory payrolling of benefits
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In January the Government announced plans to completely abolish the P11D and make payrolling of benefits mandatory by April 2026 and to have Class 1A NICs processed and paid in real time. Then on 24th May, Rishi Sunak announced that there would be a general election, which the Labour Party has subsequently won with a landslide majority.
So what happens to P11D/payrolling reforms?
The mandatory payrolling of benefits will still go ahead as planned and there are several reasons why.
Firstly, the reforms will lead to reduced costs for HMRC. At the moment, they are responsible for dealing with all tax queries, including tax codes. Most of these queries are generated because HMRC changed a tax payers tax code due to benefits received in a different tax year, potentially from a different employer. Payrolling benefits removes the need to change codes and therefore the amount (and cost) of the administrative burden.
Another very significant reason for proceeding is revenue generation. The Exchequer will receive £8.6 billion of taxes and class 1A NICs in real time time (taken from 2021-2022 tax year), rather than in the following tax year.
UK Training’s payroll expert Jo Marshall said:
"This is a no-brainer for HMRC, the payroll industry has been saying so for the last 8 years. Many other countries have already moved to mandatory payrolling of benefits. HMRC need to clarify what additional information they require via RTI for the processing of these benefits. The real question must be, is a 2026 deadline enough time to make those changes?"
Jo will be delivering the first presentation of our brand-new course Preparing for Mandatory Payrolling of Benefits on 22nd October – see a full course description and book your places here.
In the meantime, you can find out much more about the proposed changes by reading Jo’s excellent article in our News section here.
Written by Paul Murphy
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http://www.uktraining.eu/news-article/new-course-the-mandatory-payrolling-of-benefits/182