Payrolling company car benefits – myth busting
Guidance issued by HMRC has led some directors to believe the payrolling of company cars will be compulsory from April 2018. It will only be compulsory if you have opted to payroll taxable benefits and expenses. What do you need to do to prepare?
The misleading guidance, which was issued through the gov.uk website and to tax agents and employers in HMRC webinars, was amended and re-issued on 13 December 2017. It is now clear that only companies that have registered to payroll employees taxable benefits and expenses must send the taxable amounts to HMRC.
If you’ve not registered to payroll benefits, you don’t have to. You should continue to report the relevant car benefit information on form P46 (Car).
Is your payroll software ready?
Your payroll software will need to be set-up to allow you to record all the same mandatory information that you would normally report on a P46 (Car). This includes:
- make and model of car
- carbon dioxide (CO2) emissions
- fuel type
- car identifier
- calculated price
- date car available from
- date car available to
- cash equivalent or relevant amount
- date free fuel provided
- cash equivalent or the earnings foregone for fuel
- date free fuel withdrawn
- amendment indicator
HMRC provides a list of payroll software that it has tested and recognises. You can be sure that you will be able to use the software on this list to report the information that HMRC needs. The list includes Star Payroll Professional, the system that WMT uses for all its payroll clients.
For more information on payrolling of company cars please contact Susan Elsdon