It is likely that your business provides benefits to, or pays expenses to, directors and employees. Some benefits and expenses payments are taxable; others are not. We can guide you through the minefield, ensure all tax liabilities are reported correctly, and advise what benefits can be provided to staff without incurring a tax charge.
Taxable benefits such as company cars, medical benefits and beneficial loans must be reported on P11D forms which need to be submitted to HMRC by 6 July following the tax year. Your employees will pay income tax on the benefit received.
PAYE Settlement Agreement - PSA
Often, when benefits such as a staff Christmas party, or a staff away day, are provided, employers do not want their employees to suffer an income tax liability on the value of the benefit received. To get round this, an employer can enter into a PSA with HMRC which enables the company to report the benefit to HMRC and to pay the tax liabilities on behalf of employees. This ensures the employee is not financially disadvantaged.
Reporting benefits on a PSA means that the benefit does not need to be reported on a P11D form.
As an alternative to reporting benefits on P11D forms, the employer can process most types of benefits through the payroll. This means the taxable value of the benefit in kind is charged to tax via the payroll during the tax year.
How can HURST help?
Our specialists can help your business meet all its employee benefit reporting and compliance requirements and help you put a PSA arrangement in place with HMRC, leaving you to get on with running your business.