The Payroll Benefits Team hold responsibility for providing specialist tax information to HMRC, HR, Managers and employees relating to the management of Taxable Benefits, Salary Sacrifice and Debt/Overpayment recovery. They implement all schedules of deduction for Salary Sacrifice in accordance with HMRC legislation, policies, and procedures relevant to a particular Organisation. They will always be available to analyse, investigate & resolve complex verbal and written queries and provide expert assistance and advice.
Each Organisation will have an administrator who will manage the salary sacrifice schemes that they offer. This may be Lease Cars, Bikes, Childcare Schemes or Home Electronic Schemes. Following your order they will liaise with a provider to authorise and process your order.
Payroll become active in the Salary Sacrifice process upon receipt of your goods whether this is a voucher, goods, a bike or a car. We will receive a schedule direct from the provider and will implement the deduction direct from your salary in the first month and continue to manage the deduction until the contract is fulfilled. Following your order and prior to your first deduction, if you have any queries relating to where your order is and when might you receive it, it would be advisable to contact your Organisations administrator or Provider direct.
Salary Sacrifice deductions will be clearly shown on your payslip and please refer to any corresponding messages on the bottom of your payslip which may show you your outstanding balance if appropriate and any taxable benefit charges.
Taxable Benefit for a car will be shown within the message “The taxable value of (GB BIK Car and Car Fuel) is XXXXX. Tax will be charged on this amount at your current tax rate.” This is a cash equivalent charge that is calculated using HMRC legislation and will be clearly shown in your initial car quote. On the whole, a salary sacrifice deduction will remain the same for the duration of the contract however taxable benefit is subject to an increase at the start of each new financial year.
Taxable Benefit for any non-car schemes will be shown within the message “Payrolled benefit of XXX is included”
Both of these elements are added to your taxable pay and any tax due will be included in your PAYE in your salary deduction.
2 ways of Benefit in Kind (BIK)
Collection of tax due for work-related taxable expenses and taxable benefits in kind can be made in one of two ways.
‘Payrolling of Benefits’ (also known as taxing at source) involves directly processing benefits through the payroll in real time and collecting tax deductions to send directly to HMRC throughout the tax year as opposed to waiting until tax year end and submitting P11d’s.
A notional cash equivalent amount of taxable benefit will be added to an employee’s taxable pay each month before the calculation of PAYE(tax). This fulfils the tax liability at source. No P11d will be issued.
Reduction of tax code - HMRC are notified of any change relating to a taxable benefit and that requires an additional payment of tax. HMRC will issue a reduced tax code in order to collect the liability. This is backed up by a P11d issued annually and retrospectively by your employer. The P11d outlines anything which may be considerd a benefit in kind and acts as an ‘aide memoir’ for the revenue to allow them to reconcile the record.
If you have recently left the organisation and wish to make a repayment, please let us know and we will be able to give you any details direct to allow you to progress with a payment. This is also important if you are unable to honour a repayment as we can direct you to the relevant people who may be able to help. Contact at this stage will also allow us to update our records accordingly and may halt any unnecessary escalation or follow up correspondence.
