From April 2018, it is now mandatory for employers who have opted to payroll some or all of their employees’ benefits to also submit details of new company cars.
HMRC have spent the last two tax years encouraging employers to ‘payroll’ benefits received by their employees. This means that, rather than submitting a P11D at the end of the year for each employee, employers can instead make an adjustment to their payroll each month and report a single figure for all employees at the end of the year.
At present, the payrolling of benefits is still voluntary for employers. But, if an employer has opted to payroll some of their employees’ benefits, they must also now submit details of company cars as well.
Previously, employers who had opted to payroll some or all of their employees’ benefits could choose to either payroll their company car benefits or provide them to HMRC using a ‘P46 Car’ submission.
From April 2018, it is now mandatory for employers who have opted to use the payrolling service for some of their benefits in kind to also provide details of new cars via their monthly Full Payment Submission (FPS). This will be instead of the form P46(Car).
Employers who didn’t register to payroll employees’ taxable benefits and expenses by 6 April must continue to complete form P46 (Car).
What Information is Needed?
The information that needs to be sent to HMRC for company cars via the FPS consists of:
- make and model of car
- carbon dioxide (CO2) emissions
- fuel type
- car identifier
- calculated price
- date car available from
- date car available to
- cash equivalent or relevant amount
- date free fuel provided
- cash equivalent or the earnings foregone for fuel
- date free fuel withdrawn
- amendment indicator
Guidance can be found on the Gov.uk website on how to complete these fields within the FPS at: https://www.gov.uk/guidance/sending-car-data-to-hmrc-payrolling-car-benefit
This is a significant change to the requirements for company cars. Employers need to check their payroll software is compatible with submitting car benefits.
Further information can be found on the Gov.uk website at: https://www.gov.uk/guidance/payrolling-tax-employees-benefits-and-expenses-through-your-payroll