Payroll Changes 2016

2016 is the year where the government has finally seen sense and changed the expenses dispensation regime. Previously if an employee had been reimbursed for a business expense such as a train ticket this should have been reported on a P11d even if there was no tax implication. To avoid this a dispensation could have been agreed with HMRC and there was a form P11dx to agree standard dispensations with HMRC.

From April 2016 this is no longer the case. Dispensations are abolished and certain expense reimbursements will just be treated as exempt from PAYE and NIC. Employers will be responsible for checking that the expense is an exempt expense and that the employee has actually incurred the expenditure. This means the P11dx is now history and the system works how many people would have imagined it already works!

There was a little used form P9d for employees who were paid under £8500. This has now been abolished too.

There is a new trivial benefit exemption of up to £50 an employee per benefit that does not need to be reported.

Lastly there is a resonably significant change in that most benefits (for example health insurance) will now be able to be put through the payroll removing the need to submit P11ds entirely for many employers.

Full details of the current regime is available here: https://www.gov.uk/government/publications/480-expenses-and-benefits-a-tax-guide

If you would like any help with employee benefits or payroll please do not hesitate to give us a call.