When you payroll benefits, you account for the tax on benefits provided to employees through the PAYE system by adding notional pay to the employees’ taxable income.
The benefits you payroll are benefits in kind (BIK).
If intending to payrolling benefits including vehicle BIK, register your intention to do so with HMRC before the start of the new tax year.
Give your employees a letter explaining that you’re payrolling benefits, and what it means for them.
Payrolling benefits and expenses remove the need to submit a form P11D.
You need to work out the class 1A national insurance contributions on the cash equivalent notional value and return a form P11D(b).
If you choose to payroll company car benefits, you don't need to submit a form P46(Car). The PeopleXD system doesn't currently support the production of a P46 car return.
You can payroll all benefits except:
Employer provided living accommodation.
Interest-free and low-interest beneficial loans.
📌 Note: You need to report these benefits on a P11D, even if you’re payrolling other benefits for the same employees.