HMRC consults on company car reporting under PAYE regulations

HMRC has lanched a brief two-week consultation on draft PAYE regulations regarding company car reporting under salary sacrifice schemes, which will allow employers to submit data via real time information (RTI) rather than in a separate end of year return

The Finance Act 2017 removed the tax and national Insurance Contributions (NICs) advantages from salary sacrifice schemes, otherwise known as Optional Remuneration Arrangements. This means that where a benefit in kind (BiK) is provided under salary sacrifice, the taxable amount is now greater than the BiK calculated or the amount of salary sacrificed.

Due to the amount calculated being different in salary sacrifice schemes the draft PAYE regulations clarify the taxable amounts that need to be reported either via RTI, here employers payroll BiKs, or at the end of the year for non-payrolling employers.

Since April 2016, employers have been able to tax most BiKs through payroll however for company cars HMRC still requires employers to provide details on CO2 emissions, fuel type and list type. The PAYE draft regulations will allow employers to submit this information in RTI rather than having to submit a separate return after the end of the year.

The consultation closes on 28 November.

Open consultation - Draft legislation: The Income Tax (Pay As You Earn) Regulations 2017 is available here.

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