Payroll Benefits in Europe
Updated: Mar 16
The annual P11D return that deals with ancillary employer benefits is being phased out. HMRC introduced the ability for employers to payroll taxable benefits, so instead of paying the tax on the benefits at the end of the tax year using a P11D form, the employees pay the tax in real time in the month the benefit is received.
With any form of compliance it’s important to look for value and it’s strongly worth doing this from an employee wellbeing perspective as it avoids the requirement on employees having to include such items on their personal year end tax return and pay over tax that they are nearly always unlikely to have realised they owe. Also, it greatly reduces the likelihood for employer error in not logging such items or other accidental exclusion which has potentially quite onerous consequences in terms of penalties and fines.
Other tax administrations in different European countries have introduced comparable measures albeit in the context of their own fiscal systems.