Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
What do HMRC need to know?
If you are an employer who covers any personal bills for your employees, with regard to goods or services, you will need to report these to HMRC and there may be additional tax and National Insurance to pay.
What needs to be reported and paid all depends on who arranges for the goods and services to be supplied and how they are paid for. The following HMRC rules apply:
- If you arrange the goods or services and pay the supplier directly, you need to report this cost to HMRC on your P11D form and pay Class 1A National Insurance on the value of the benefit you provide.
- If your employee arranges for the supply of the goods or services but you pay the supplier directly, you need to report the cost to HMRC on your P11D. You then need to add the full cost of these goods or services on to your employee’s other earnings and deduct Class 1 National Insurance through your payroll on these additional earnings. You won’t need to deduct any PAYE tax though.
- If your employee arranges for the supply or the goods or services and pays for them, with you reimbursing the employee later, you need to add the amount you reimburse to their other earnings and deduct and pay PAYE tax and Class 1 National Insurance through payroll. As far as HMRC is concerned, these count as earnings and needed to be treated as such.
- If these costs form part of a salary sacrifice arrangement and the amount of salary given up is less than the cost of the personal bills being covered, you need to report the salary amount to HMRC instead. This only applies to salary sacrifice arrangements made after 6th April 2017.
How can DSR Tax Claims help?
We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
This page was last updated on 07/11/2018.