The measure is hoped to reduce the reporting burden on employers as the obligation to submit P11D forms will be reduced or removed for many employers.
The Finance Act 2015 introduced legislation giving HMRC new powers to make regulations allowing employers to voluntarily payroll some benefits in kind (BIKs) for tax from the 6 April 2016. Non-cash vouchers and credit tokens were excluded from the payrolling of benefits in kind legislation in Finance Act 2015.
The Payrolling of non-cash vouchers and credit tokens provides an opportunity to reduce employers’ reporting obligations to HMRC. The collection of tax in real time will create efficiencies for employers and a simplified system should prove easier for employees to understand. Payrolling will help to reduce the likelihood of an over or underpayment of tax.