Do you provide your employees with company benefits? If so, have your employees advised the tax office to ensure their tax codes are amended accordingly? By doing this as soon as a benefit is made available, the employee will suffer a consistent (and more manageable) tax deduction on their payslip.
If the tax office are not advised at all, shortly after 6 April each year a form P11D confirms to them who has earned benefits. Tax codes are then issued to collect the unpaid tax from the previous year, as well as the current period’s tax, which often leads to employees suffering a far higher deduction on their payslip until they have caught up. This can cause employees problems when budgeting their personal finances.
If you provide your employees with a company car benefit, it is the employer’s obligation to advise the tax office of this. This is done using a P46 car form, which must be submitted electronically. The same implications listed above apply if this form is completed late and considering car benefits usually carry a higher value than other benefits, late completion of this form can result in a significant deduction in your employees’ payslips until all tax is up to date.
With this in mind, we recommend you act quickly when providing employees with benefits. Don’t forget, we are here to help, so if you’d like to discuss this matter with us, give us a call on 01733 371180 and we’ll be delighted to help.