Employers Get Ahead!
With the Happy New (calendar) Year well under way, employers could take the opportunity to consider the fast approaching end of tax year, and review all the benefits made available to staff over the last 10 months.
Taking time now will ease the reporting process and provide a little more breathing space to consider the many queries this can often arise in this area of tax.
Staff Handbooks/Expenses Policies
Handbooks, policies and employment contracts are the bedrock on which benefits and expenses are provided, calculated and reported. A quick review to see if they are up to date and clear to use shouldn’t take long and will help avoid problems arising from common mistakes such as what is business mileage or reimbursements of personal mobile phone costs being assumed as business costs or exempt.
Even where policies are clear, errors can arise with new staff or where existing staff change roles.
How strict are you about receipts, particularly if you are recovering VAT on subsistence costs?
Are you still reporting as if you have a dispensation in place, when dispensations were removed three years ago in April?
P11Ds and PAYE Settlement Agreements (PSAs)
Comparing last year’s P11Ds and PSA agreement if you have one, with benefits provided and expenses reimbursed this year should highlight any changes you might want to advise staff about before any tax charges arrive.
Take care that any salary sacrifice items still around are being reported correctly. After the reduction in benefits that can be included in an optional remuneration arrangement, might you consider changing your benefits offerings to take advantage of current tax exemptions, or perhaps include more into a PSA.
Where you have a PSA in place already, check whether any of the benefits previously included have continued to be provided after April 2018. You should also check that any new PSA items might be difficult to present as one of the acceptable categories of minor, irregular or impracticable.
Trivial Gift Exemption and other animals….
Tax savings have been significant relating to items previously reported on P11Ds or PSAs which then met the criteria for the “new” trivial gift exemption. As always, care must be exercised on assuming that all three of the criteria for this exemption are met.
If Christmas parties were provided, did the total costs fall below the annual party threshold? Were there any other annual parties in the year which need to be added to the total cost over the tax year? Did these parties meet the required criteria for this exemption?
Have you considered whether any other exempt benefits could be offered to keep staff happy whilst reducing your reporting requirement and associated tax and NIC bills? Workplace parking, long service awards, health screening being some of the exemptions still available.
Good luck with meeting the various deadlines involved, and may all your returns be accurate ones!
If you would like to discuss this blog in more detail please email Carol Watters or call us on 01772 821 021.