Up to now employers who reimbursed, for example, business expenses to their employees needed to apply to HM Revenue and Customs for a dispensation from having to report these payments on form P11D.  Now there are new rules for Benefits and Kind Forms

If the employer did not obtain a dispensation, then the payments would need to be reported on the P11D form.

From 6 April 2016 this requirement will be removed so P11D dispensations will no longer be necessary.

However, the employers will need to ensure the expenses are wholly, exclusively and necessarily incurred by their employees in the performance of their duties, and expenses must continue to be receipted and authorised.

This may cause issues for owner managed single employee companies as they usually self authorise their own expenses.

There is also the opportunity for employers from 6 April 2016 to process benefits in kind through the payroll. So long as the correct tax and national insurance is collected through the payroll then there may be no need to complete P11Ds for these benefits.

New rules for Benefits and Kind Forms

The benefits in kind that may be processed in this way are restricted to:

• Company cars
• Fuel benefit
• Private medical insurance
• Taxable subscriptions

Employers will need to register online with HMRC and once agreed the benefits will not need to be reported on form P11D for 2016/17.

If you fall within the above rules and you wish to discuss your position, then please do not hesitate to contact me by sending an email to kevin@kwaccounting.com