New rules surrounding Optional Remuneration Arrangements take effect this month, meaning employers will need to update their payroll systems to reflect the change.
From 6 April 2018, employers must report all Benefits in Kind (BiKs), including those which fall under the umbrella of Optional Remuneration Arrangements (OpRAs), to HM Revenue & Customs (HMRC) on form p11D – unless they are registered to voluntarily payroll benefits.
The new rules will include any benefit received as part of a salary, such as a company car or private health insurance.
However, pensions, pension advice, childcare, cycle-to-work schemes and cars with emissions of 75g CO2/km or less are not affected by the rules.
HMRC has urged employers to make these changes and complete their P11D accurately, including all details of cars and loans provided.
It says the most common errors in P11Ds include inaccurate recording of car emissions, time apportionment and free use of fuel, and the incorrect classification of “making good”.
The new rules follow an announcement made in April 2017 that the Government would clamp down on salary sacrifice schemes which reduced employer’s and employee’s tax and national insurance bills.
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