Method for reporting employee benefits due to change
The current method of reporting when an employee receives a “benefit in kind” is under discussion in an attempt to ease the administrative burden.
Some benefits to be exempt from tax all together?
Conversations are around abolishing the now £8,500 limit and instead making trivial benefits to employees exempt from tax all together.
Practically, this means that small items like chocolates and flowers could be covered under a statutory exemption and won’t be required for reporting.
The end of the P11D?
In addition, the consultation group is proposing a payroll style tax reporting and payment system to replace the current form P11D. This would not only result in less admin but a situation where reporting and payment occur simultaneously, not at a future date via self-assessment.
What will be the limits?
Questions unanswered at this stage relate to what the monetary limit of the “trivial benefit” could be and if the annual exemption should relate to the overall annual spend or the number of items “gifted” in one year.
This is all part of the Tax Simplification initiatives by HMRC and further news is due to be published in September.
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