Payrolling: tax employees' benefits and expenses through your payroll
How to report expenses and benefits you provide to employees or directors.
Official website: gov.uk00
How to use the service
You work out the cash equivalent of a benefit for payrolling in the same way as you do for a benefit that you report on a form P11D. If you’re not sure what the value of the benefit is at the start of the tax year, you can make an estimate of the cash equivalent of the benefit. You can then adjust it later in the year when you know the exact value. To work out the cash equivalent of the benefits you provide, you can use: HMRC ’s online company car and car fuel benefit calculator , or your own payroll software for company cars and car fuel special cases for employees in the motor industry guidance company vans and fuel guidance other expenses and benefits
Fees
Employers may agree to employees making a payment towards the cost of a benefit, this is known as ‘making good’. When employees do this, the cash equivalent of the benefit is reduced. If the full cost of the benefit is made good, there’s no taxable benefit as the employee has paid for it. Any amounts made good after 6 July will not affect the cash equivalent, meaning the benefit will still be taxable and liable for National Insurance contributions and cannot be adjusted by the employer. For benefits which are payrolled, the guidance below explains what to do in different circumstances.
Official source
Payrolling: tax employees' benefits and expenses through your payroll
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