Can an employer put taxable benefits through payroll for tax purposes?
• There is no provision in PAYE Regulations for non-cash benefits to be taxed through payroll. HMRC can, by informal agreement, accept such arrangements if HMRC are satisfied the correct tax and either Class 1 or Class 1A NICs is paid and reporting obligations will be fully met (recording the sum and tax paid on the P11D/P9D). • If HMRC agree to such arrangements, the value of the taxable benefit in kind should not only be included in the pay figure shown on the P60/P14. The employer should also tell the employee that their benefits in kind have been included in their gross pay and must provide details of those benefits separately to the employee and HMRC. This is to ensure for example, that employees have the information they need for their SA Return or to claim tax credits (not all benefits in kind count towards income for tax credit purposes). • HMRC expect any request to informally agree such arrangements to include proposals on how the employer plans to provide details of the valu
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