Putting employer provided expenses and benefits-in-kind through the payroll – employer/agent volunteers sought for further study

Pre-Budget Report 2008 announced that Ministers had approved HM Revenue & Customs (HMRC) plans to explore further with stakeholders the scope for collecting tax on benefits in kind and expenses through the payroll.

We remain committed to our key objectives for payrolling. These are:

  • reduce administrative burdens and make compliance cost savings for business through simplification of the process
  • provide a better experience for employees, through improved clarity over the tax treatment of their benefits in kind and expense payments
  • increase HMRC processing efficiency
  • remove the uncertainty for employees and HMRC arising from current arrangements

HMRC envisages that this work will involve a study of employers who currently payroll and later the development through experimentation of possible frameworks to offer payrolling to all employers in a way that would not be detrimental to the interests of critical stakeholder groups.

Volunteers sought for further study

HMRC would like to identify volunteer employers and agents, especially smaller employers and agents or bureaux, who currently payroll and who would be willing to participate in a study of how they payroll in practice. We are particularly interested in hearing from and working with employers and agents who question the value of payrolling, particularly universal (ie mandatory for all employers) payrolling. HMRC is willing to consider how employers who incur increased costs from working with us might be compensated and what reassurance employers and agents who participate in the study need regarding their current practices and their rights of privacy and confidentiality. We would like to study this year’s End of Year and next year’s In Year (P45/P46) arrangements.

Further along the line, HMRC will be looking for employers who do not currently payroll to participate in trials of possible frameworks. A further announcement on this will be made in due course.

If you would like to become involved in this study, please email your details to PA Harris by 20 January 2009. If you are an employer it would help us greatly if you could indicate the number of people you employ, the nature of your business and the size and nature of your client base if you are an agent or bureau.