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For the latest New Development, see ND.2740.

Collection of tax on certain benefits in kind may be made through the PAYE system¹ under a formalised agreement with HMRC. Employers are expected to request authorisation from HMRC in order to payroll benefits (see below). Where a benefit in kind is treated in this way, it does not have to be reported on form P11D², although forms P11D(b) are still required³ (this is because, although tax is deducted via payroll, Class 1A rather than Class 1 payroll NIC, remains payable separately). However, there is an obligation for employers to provide details of payrolled benefits to employees before 1 June following the tax year (see below). Note also that all payrolled benefits and expenses need to be included in a Full Payment Submission (see E4.11114).

Payrolling benefits is currently a voluntary process, the default position being that a P11D should be submitted by the employer (see E4.11124) for any taxable sums. However, under what could represent a significant extra employer burden, it is proposed that payrolling of benefits