BUSINESS CLINIC

Cornwall Payroll MD Tim Wilkins, asks if Payrolling Benefits in Kind (PBIK) is right for your company. ONE TO CONSIDER?

WHAT IS IT?

Payrolling Benefits in Kind (PBIK) was introduced in 2016 as an alternative to P11D’s, as a way to tax employees on benefits provided by their employer. Company benefits are becoming increasingly popular as employers look for new ways to recruit and retain staff in the current labour market. forms at the end of every tax year, saving the company time and administration, or the cost of additional accountancy fees if they are completed externally. As employees are taxed on the benefit throughout the year, they will not owe HMRC tax at the end of the tax year, which is then normally recovered by a change in tax code/lowered personal allowance in the following year.

HOW DOES IT WORK?

Employees are taxed on their benefit each pay period via payroll, rather than using the end of year P11D method. The amount of the benefit is displayed on their payslip and they are subsequently taxed on this amount.

WHY SHOULD I CONSIDER IT?

PBIK removes the need to complete P11D

WHAT TYPES OF BENEFITS CAN I PAYROLL?

Most benefits can be payrolled with the exception of interest free/low interest employee loans and employer provided accommodation. Benefits include private A5 Landscape Ad 2.pdf 1 23/08/2022 12:51 medical insurance, company cars and voucher schemes.

WHAT DO I NEED TO DO?

You will need register for PBIK with HMRC using your Government Gateway account. It is important to note that you need to register before the start of the tax year. So, to use PBIK next tax year you will need to register by 5th April 2023 at the latest. For more information contact Cornwall Payroll on 01872 306412 or email info@cornwallpayroll.co.uk