Cathryn Newbery, Ciphr 00:01
Hello and welcome to today’s webinar hosted by Cypher. reaping the benefits, why switching to payroll and benefits in kind could be right for you? I’m Katherine and I inside the head of content. I’m joined by my colleague Amanda, who’s payroll sales manager at Cypher. Welcome, Amanda. How are you doing today?
Amanda Barnden, CIPHR 00:18
Yeah, I’m really well, thank you, Katherine. Yeah, I’m Amanda bandhan. I’m the payroll Sales Manager for Cypher, and get really pleased to welcome you all today to the session.
Cathryn Newbery, Ciphr 00:29
Thanks so much, everyone for joining us today. I’m just gonna quickly run through our agenda before I hand over to Amanda. So today, we’re going to look at the growing complexity of the payroll and benefit landscape. Why organisations have been reluctant to move away from using p 11. D, the limitations of using p 11. D is to calculate tax advantages for employees have payroll benefits. And we’re going to be talking a little bit about how Seifer is using that with our suite of benefits, the challenges of moving to payroll, new benefits in kind and how to overcome them. And also look at how cyber HR and Payroll solutions can support your move to payroll benefits in kind. Amanda will also be taking your questions at the end of the broadcast. So if you have any questions, send them in using the control panel on your screen. Remember, if you’re watching live, this is being recorded and the recording will be emailed to you automatically. There’s no further action you need to take to get that. Okay with that I’m going to hand over to Amanda, she’s just going to introduce us to Cypher solution.
Amanda Barnden, CIPHR 01:27
Thank you. So a little bit about Cypher before we begin, Cypher have been a supplier of people solutions for more than 35 years now, from our origins as an HR solutions provider. Our services and products now include recruitment payroll and learning management solutions. With 700 customers across the UK, we support the entire employee lifecycle, as you can see our lovely wheel there, from recruitment and attraction right through to payroll and off boarding.
Cathryn Newbery, Ciphr 01:59
With Amanda, and I’m just going to jump off on auditing. So you’ve got a little bit of a poll to get you going. Are you planning to implement pay rolling of benefits incline? And perhaps not, but you’re interested to know what’s involved? You already payroll benefits. And maybe you’re joining us today to learn a little bit more about that. Or perhaps you’re planning to implement it in April 2023. So Monday, you talked to a range of Cypher customers, and also people who are considering Cypher solutions, if it is something that people are talking to you about more and more.
Amanda Barnden, CIPHR 02:28
Yeah, they are. And you know, and there’s, and we’ll explore that today, of course. But there are always questions about not only the implications for the software and the services that you’re using for HR and payroll, but also how you manage that change. It’s always quite a big transition from P 11. Ds to the payroll and benefits and kind and it’s really important that employees understand what’s going to happen to their pay. So I’m really hoping that we can demystify some of that today as well.
Cathryn Newbery, Ciphr 03:01
Sadly, thanks so much, I’m just going to share the results. So around two thirds of you aren’t planning to implement payroll and benefits and crime that you’ve kind of keen to find out what’s involved, which is great to have you with us. 15% of you already pay rolling benefit, and a further fifth are planning to implement it in April. So that’s where we are at the moment. I’m gonna hand back to Amanda now.
Amanda Barnden, CIPHR 03:22
Great, thank you now, it’s really interesting to learn. Thank you, everyone who, who voted there great stuff. So let’s take a look at the different types of rewards and benefits that we can manage as employers, first of all, so I’ve been in the payroll industry for over 30 years now. I know don’t look at the the rewards and benefits area is certainly one of the areas that I’ve seen the role of the payroll manager significantly changed over the years. So obviously having a payroll background and what was going to have a little bit of a payroll slant on this. Obviously, we’re going to have colleagues joining us today from from the HR world. So welcome to everyone for from HR as well. But it’s now 10 years since the introduction of auto enrollment for pensions with there’s been a very changing landscape with salary, salary, sacrifice, elements of pay, and the wider flexible benefit options that are available. The key, of course, is retention of a happy workforce who feel valued, and, of course, every organization’s best asset as their people. The development of the payroll managers role to have a wider understanding of compensation and benefits and the tax implications for those adds to that payroll managers skill set and makes them an essential part of the HR and the finance team. Reward still seems to sit between HR and finance but certainly a bridge between the two teams and also with an eye on compliance that always fit for your company. Somebody If it’s got no tax implications at all. At Seifer, we work with partners like Amber and benefits, who offer things like shopping discounts and reduced price cinema tickets as an example, financial well being and certainly a focus in the current economic situation. So employers can certainly offer different ways to help support their workforce. You can have a look at cyphers partner pages to see more help and advice about the sorts of suppliers. Health benefits like free eye tests and flu vaccines have also played a part in the employee wellbeing policies for most organisations. And these have no impact on payroll or taxable benefits. salary sacrifice schemes or casually named by HMRC, optional pay remuneration arrangements opera, offer non cash benefits and can include cycle to work schemes, car leasing and pensions. Obviously, childcare vouchers are now no longer available, but you may be continuing to operate those for existing recipients. So, salary sacrifice benefits are used to reduce taxable and national insurance will pay by the cash value of the benefit that’s given up, I’m creating a saving for both the employer and the employee. A PSA will allow employers to meet the tax and NICs payable on certain benefits. So on expenses given to their employees, it’s a practical way to reduce the admin that might otherwise be involved. So these can be applied to minor or one off expenses or benefits. The HMRC do helpfully provide quite a long list. It’s a very long list if you have a look on the.gov website for definitions and examples of what counts as a minor, irregular or impractical expense or benefit. So that could include things like incentive awards, present to an employee and hospital staff entertainment, this is actually taken straight from HMRC, for example, a ticket to Wimbledon, that one in use of accompany van gift vouchers and small gifts. Our focus today though, is on payroll and benefits in kind HMRC are keen for employers to transition to this method of taxation. So let’s let’s explore what you’re going to need to know as an employer. So is this the end of p 11? D reporting? Well, possibly, maybe, maybe maybe not nearly. It’s, it was introduced in April 2016. So that’s some time now. And we’re still talking about this transition. So it’s not mandatory. It’s neither is it incentivized. But we can see that at some point, the HMRC will attempt to end p 11 D reporting altogether. This might take some time, the pay rolling process still isn’t a complete process for all benefits. As you can see, there’s a there’s a couple of points on that slide, there are four things that cannot be payroll. So why do HMRC want you to where payroll benefits. Partly this is due to the nature of taxing benefits which have already been received by the employee. So that means that the tax due on those benefits is always in arrears is not a great situation. Because it means that we’re always doing retrospective adjustments to tax codes, or worse, employees are receiving big demands from HMRC for uncollected tax, I was on the receiving end of that myself in my last employer, where I had a company car for nearly a whole year, and then got a really tasty bill for tax and a reduction on my tax code for the following year. It wasn’t nice. So the adjustments made on tax codes in the current year is always a predicted value for how much taxable benefit the HMRC think you’re gonna get this year. So imagine a new starter in May, they’ve joined your health care scheme, you can see that that’s almost a whole year of benefit that they’re not paying that tax a little bit like me and my company car. So the HMRC don’t get to hear about that until the following year. Unless they’ve been really diligent the employees put it on their self assessment, but you know, in advance, you can do that. So the HMRC get to hear about it the following July, which me means there’s back tax you, and they’re going to do the change to the tax code as well. So you can see it can become quite a confusing situation for the employees. Sorry, my iPad is not scrolling my notes up, which is very annoying. Bear with me. So the other reason that the the HMRC want you to payroll benefits, I suspect is to align with the whole making tax, digital and real time information. So it makes sense in 2022 to be taxed on all of your earnings and benefits at the point of receiving them. It’s just it’s just logical. Makes sense. So what does payroll and benefits actually mean? Well, it’s taxable, non deniable. So we don’t get the NIC savings like we do for salary sacrifice. But it’s a no pay item on on the on the payroll. So all we’re doing actually is increasing the taxable pay for employees through the payroll. Sounds easy, right? So how do we set it up? And will it work for you. So I just put that little thing about the Office of tax simplification at the bottom there. It just incidentally, you know, I get geeky about these things. If you join my my webinars regularly. It seems as though the office of tax simplification actually invented the phrase payroll, we can’t find any reference to it before their report. So I think they are responsible for payroll Ling to enter our vocabulary in the HR world. Okay, switching to payroll benefits in kind. Alright, so we’ve got a little checklist here for you. So when So these four things are my best advice for you know, when you’re starting to think about implementing this as a change. So number one, if you are responsible for running your payroll in house, do check that your payroll software can support it. Most should now to be fair, you know, say it’s been around for a few years. So most most payroll software is capable of supporting these calculations for you. But do be aware there could be additional licence fees, there could be implementation costs, there could be training that you need to consider as well. So if you are looking to put a business case forward for this change, then do do consider those, those you know that they could be costs. If you outsource your payroll, so point to have a chat with your bureau manager, or your account manager, find out if your bureau can support you for this. And the changes, I’m going to come on to changes in calculations in a little while as well. So can they help you with the changes that you might need to help you throughout the tax year? Timing is crucial timing is everything. You know, as for everything in payroll so efficiently, you can register at any time before the start of the new tax year. Please, please don’t leave at that late. There’s there’s so much planning to do beforehand. One of the things to bear in mind is that HMRC start working on next year’s tax codes in around November, so around now. So if you are going to make the this, this change, tried to catch them before that routine starts. So that you don’t end up with a whole string of different Pinoy notices or you know, different tax code changes, which could be confusing for your employees and your colleagues. The screenshot that we’ve got here, this is the va.gov page where you would start that process to actually make the election to choose to move to pay rolling benefits and kind, you can only do it for a full tax year. So if you log on through here, you will actually be given a whole list of all of the different benefits that you can choose to be paid, you don’t have to do all of them, you might have different types of benefits. Or you can just choose the ones that you want to put through your payroll for the coming tax year. So yeah, sorry, I couldn’t get any further through there. I’m not an employer so I couldn’t make it go forward. But you could back out you can go in there and back out if you need to. Oops, sorry, Catherine. That Okay, next slide. So communications with your employees will be vital for the success of this transition. And and for any type of change that you’re introducing, which is going to affect their pay. So let’s face it, there’s always going to be employees who don’t understand they’re still going to call you email you or use your online chat. apt to ask you about it anyway, so be prepared for this. Make sure you’ve got plenty of information and documentation to share with them, you know, create FAQs, so that, you know they’ve got easy access to this source of advice. Shameless plug for Cypher HR at this point, employee comms and notifications can be managed through our platform. Of course, company policies and documentation can all be really easily published on our platform. Together with a landing page, we’ve got the screenshot there for announcements, so didn’t make sure everybody knows if you are going to implement what the change means for them. HMRC so you must give written notice by the first of July, and this can be by payslip email or letter, I’d suggest a combination of all of those just keep spamming, you know, because employees again, don’t don’t always read everything that you you send. So an explanatory letter emailed with a copy on the Employee Self Service so that the employee could come back to it at any point will be a definite advantage. So the things that you need to tell them, so you must tell them that their tax code will change, to take out that adjustment for the benefits in kind, if they’re already receiving that benefit. So the impact of that should mean that they go back to regular personal allowances for the tax year that this is implemented. You’ve also got to tell them that you will be putting the adjusted amount through the payroll each pay period, and that they will pay tax on that amount. So that’s two really clear pieces of advice that you must give your employees. So the tax code will change and that you will be pay rolling that benefit. So there is a common misconception that employees will be double taxed in the first year that you apply payroll benefits in kind it’s not true. tax codes, as I’ve mentioned before, are based on a predicted amount of benefits that the HMRC thinks you’re going to receive in this tax year. So if you get those applications in early, you do have the chance that the employee will have a normal tax code for for the first year. The only reason for any adjustment by HMRC will be is if your reported p 11. D values are different to the predicted ones. So but that should only mean that there’s a very small change, maybe a little bit of change. Unless of course you didn’t introduce a brand new benefit in the previous year. As you may know, there is a 50% tax, maximum tax limit that anybody can pay on their earnings. So for example, if your pay is 1000 pounds, you can’t pay more than 500 pounds tax to ensure that you’ve got enough to live on. So that limit is there. So if the impact of applying payrolling benefits is to bust through that limit, there are two options available to you. For management of that excess tax. Option one just removed the payroll and benefits in kind for that employee and p 11. D the benefits instead. So you see this p 11. D thing is still with us. Option two is that you can carry forward the shortfall to the following month. If there’s still any underpaid tax, by the tax year end, the HMRC will write to the employee to where to recover that and to to collect that shortfall. New employees, so if you have a new employee and you’re going to be payrolling their benefits, you must tell them how their benefit will be taxed. This loops quite nicely back to those two really vital pieces of information that we started off on this slide with that you you must tell your employees so you must tell them that their tax code may be amended to adjust any benefits from a previous employment. And that the new benefit will not be included in their tax code, you’re gonna take it through the payroll for levers, we’ve kind of got the reverse thing going on. So the likelihood is that their benefits so if we think of something like a health benefits or a car ownership, the benefit is likely to end on their last day of service or their last day of employment with you. Some benefits may be deducted in whole months. So do check your company policies for the treatment of benefits in that situation. So the benefit will need to be prorated and the balance adjusted on their last pay on their final pay. So if you had late notice As of the lever, we know this happens, then the you’ve you’ve already done their final pay, but there’s a shortfall in the tax, the tax will benefit, you must notify HMRC either as taxable pay on the FPS, or you guessed it on a p 11. D, do you see, you see, we’re not really moving away from P 11. D is when, you know, unusual things happen. So, so for all of their sort of, so this all becomes part of the employee communications, and you can probably get the majority of that information in one communication, and make that freely available to work to all of your employees and kind of a an FAQ sort of approach. company cars, I mentioned cars there, we’ve actually seen a decline across our customers for sure. And the use of company cars, the majority of employers are moving across to car allowances, or they’re paying HMRC rates or perhaps enhanced mileage rates for the use of private cars for for business journeys. However, there are still employers for whom that the provision of a car is essential. And some of our customers do indeed still have large fleets, the P 11. D process can be time consuming, cumbersome, especially if the changes are reviewed at tax year end. And maybe some of those changes haven’t been tracked or recorded properly, it can be a little bit of an administrative nightmare, a bit of a headache to get those done. So you can see if there’s particularly if there’s a fleet system that we can extract data from actually being able to monitor those changes all the way through the year is going to be really useful. There are a lot of fields that you’re going to need to hold on your system on your payroll system or your your your payroll service for the payrolling of company cars, tempted to list them here and then completely changed my mind about that deleted it all off, it would have made a really boring slide, to be honest anyway, but there’s quite a lot of information that you need. I can provide that to you if you want to see it. But the because of all of that information, the best news is that P 46. Car will no longer need to be done. That’s the quarterly return that you would have to normally make to HMRC for new car users and change to car ownership. So that’s a great thing. So that’s a big tick, you will need to make sure that you’ve got a good line of communication with whoever in your business is responsible for the car ownership. Clearly, any changes are best made during the the month of the change on your payroll. My iPad is stuck again. Sorry. So yeah, so in in our own software in syphons payroll software, we create a database of the cars with all the appropriate fields and the tables so that we calculate the benefit value, then the cars are allocated to the employees with the available from and to dates. This pro rates the the taxable value between those dates using calendar days of ownership. So that leads us nicely into the next slide, which is all about the calculations themselves. So how do we calculate the taxable pay for the uplift to the payroll. The calculations themselves actually are reasonably logical and easy to understand. This, again is helpful when you’re for your employee comes when you’re discussing this with employees so that they can understand the changes to their their pay and the implementation of those values. So essentially, you’re taking the reportable value, dividing it by the number of pay periods and that is the amount to increase the taxable pay for So say your employee receives 1200 pounds in medical benefit each year and their monthly paid. We divide that by 12 and we’re entering 100 pounds uplift to the taxable pay through the payroll with a nice clear pay slip description as well so that the employee can very very clearly see exactly what that changes on their pay slip. Your payroll software or service will be configured as well to make the correct reporting to the HMRC using your FPS submissions. So the full payment summary of course being the regular reporting that goes off for all of the the pay tax and then I at the end on or before each pay day. So that calculation follows for other pay periods, your weeklies, obviously, you divide that figure by 52 for two weeklies divided by 26, and so on. So what if your employee is paid by a regular pay periods. So these are payments of employment income, which have no set pattern. To work out the taxable amount of benefit gets a little bit trickier. You take the cash equivalent of the annual benefit value again, so we’re starting with the same value. But this time, we’re using calendar day method to divide by 365. And then multiplied by the number of calendar days in the tax year. So for example, if you had one that was payable today, you would calculate from the sixth of November, sorry, from the sixth of April to the second of November, for example. So you need to multiply up by the number of days in the pay period. And that’s your, that’s your taxable benefit value. For each subsequent payment, you have to take it from the pay period that you’re paying back to that to that date. So again, maybe it’s second or third of November, in my example. So this method with calendar days has always been used for p 11. D. So actually, there’s no change there. If you do need any help on on that, you know, please do give me a call or drop me a line, you know, we can do q&a on that. Those are regular pay periods, you know, for casual or maybe zero hours workers, it can still be applied to them, they can still benefit from payroll and benefits and kind, you’ve just got to do this calendar day calculation each time for each time they are paid. So yeah, making changes. So, in payroll, we live in the real world where there are changes, sometimes we’re not always the first to know that something has changed. And we could be in a situation where there are retrospective retrospective changes to make. So we need to make sure that we’ve got the processes and the mechanisms to deal with these efficiently and effectively so that we get an accurate calculation. Again, this is a good thing to make sure employees know in advance to help any confusion if there are back backdated changes to make. So if the back of our value of the benefit changes mid year, this is the the method that must be used to recalculate the value for the taxable pay. Bear with me, I did try to create a formula, I was going to try and show you a calculation sort of formula for how to put this together, it’s just too much the workflow seems to work quite well, though. So we’re using calendar day calculations again. So to work out a revised taxable amount, you need to do that calculation that we were talking about just now for the past year. So calendar days up to the date of change on the old value calendar days on the new value up to the fifth of April. So we’ve got these two figures, add those together, that’s your taxable amount for the whole year. Take away the amount on which the benefit has already been paid. That will give you a remainder. And say you’ve got five more monthly pay days to the end of the year, divide it by five, that’s your new taxable amount for the rest of the year. Did you follow that? Was that all right. So it does take a little bit of fiddling about. But I have to say you would still need to do that calculation, if you were reporting on P 11 ds. So actually, there’s no change there. So if you’ve made your final FPS where it’s actually around and you didn’t know about that change, then the change can’t go through on the payroll then the value can be carried forward to the first pay day of the following tax year. And that includes any negative values. So if if there was a reduction, of course that that could generate a reduction in tax or a tax refund in that that first payment of the new year.
Amanda Barnden, CIPHR 29:37
that the class one a calculations can’t be carried forward. So so that reportable benefits for the year, the class one a still has to be paid on that by 19th of July. After the tax year and changing the number of pay days we’ve got a similar approach to this Same formula, the same approach to the calculation, you might need to change the number of tax, you might need to change the number of pay days that somebody moves from weekly to monthly payroll, for example. So to recalculate the amount, do this calculation that we’ve got here again, but then the remainder, that balance, you need to divide by the number of remaining paydays for the rest of the year. So again, that’s going to make sure that we get an accurate value by the end of that tax year for that employee. Tax your end. So what are your obligations for tax year end reporting? Well, you must still report anything on P 11. D for benefits that aren’t payrolls. And we covered that earlier, there are some benefits which cannot yet be payrolls. So you know, the employer provided living accommodation for so long. For example, the same process will then apply for calculation and reporting to HMRC and the provision of self assessment copies to the employees. But as covered earlier, also, any excess benefits which couldn’t be recovered through the payroll will need to be reported on P 11. D, for example, those employees whose income tax exceeded the 50% limit. All benefits must be consolidated for reporting on P 11. dB. So your p 11. dB is the summary for all reportable benefits and the values for your organisation through the year. So that is the figure that you need to calculate as an employer for payments over of your class one a calculations. Class One A is a funny figure, I thought I’ve made a note of it. But it is a funny figure this year, because of course, we’ve had an increase, and then a decrease mid year. So it’s not the straight percentage. I will look that up for you. It’s something like 13.84 It’s not it’s not a good number. I’ll check that for you. So So yeah, that that tax year end and the class one a you still need to do the P 11. dB and the class one a you’ve still got that obligation. So why aren’t people move it? Why aren’t employees generally moving over to to pay rolling benefits in kind? For them majority who have implemented according to a CIP survey, the new service has been received with remarkably few complaints from employees, people accept it, it’s been simple to roll out and simple to maintain. So it has been a success for the employees who have done it. So why has there been this resistance to moving over? Why are we still stuck with p 11. Ds, for? For so many people still. So strangely, at Cypher, we’ve actually experienced an increase in customers asking for our P 11. D services. It’s great for us, we love to look after people and provide these services. But it is a curious trend, where trend where you know, for six years now, this method has been available. So I think there is a perception that payroll and benefits in kind is complicated to process. So we have been through some of those calculations, just now, you know, hoping that I’ve been able to show you that actually, the calculations of the benefits do is the same as you would have to do for a p 11. D. You know, obviously, it’s great for employees to be taxed at the point of receiving a benefit. And at Cypher, our products and services and Customer Success teams are all here to help you. We’re all here to support you, if you’ve got any questions and provide advice wherever we can. So but I’ve listed here some of the maybe some of the challenges some of the barriers that you could experience. So that top one there, the charging class one NICs on the benefit value, you can’t do that. So class one, A is payable by the employer, but the employee does not pay national insurance on the benefit value. So it’s really important that it’s just the taxable pay, that’s increased when you’re doing this, not the national insurance bill and not the pensionable pay either. Okay, so be aware of that. You must register with HMRC. Some employers apparently aren’t doing this without registering. That creates all sorts of problems for the employee, because then they are being double taxed. Please note also that a payroll Bureau cannot do this for you, even if they are registered as your agents. You have to do that. You Know that screenshot that we had to look at it a little bit earlier for the.gov page that you need to go through. So please make sure that you do that. You do have to do it for a full tax year. And you do need to make sure that everybody knows what the change is that it’s absolutely vital for the success until your payroll team, so you know, if it’s something that you’re discussing in HR, again, make sure you’ve got that that cross team discussion going on, so that everybody’s contributing to the success and the transition of the rollout of this sort of change. So as promised, a little look at what we do at Cypher. So here at Cypher, our HR team are constantly reviewing ways to improve the benefits and reward packages for our employees. So the average cost of employers National Insurance is around four to 5000 pounds a year per employee. So it’s a lot. So anything that we can do to help reduce the the impact of that with salary sacrifice schemes, is obviously going to make good business sense. Our pension scheme at Cypher is a salary sacrifice scheme. And also our employer savings, we do add back to the employer to the employee, so that they get further benefit for that as well. recruiting new employees is is an expensive process, we are a growing organisation, and we’re always looking to, you know, find new talent to join us here at Cypher advertising and recruitment, you know, that could cost at least 3000 pounds much more if you’re using agencies even more if you’re using headhunters. So having a healthy benefit package is a really good attraction and retention tool in a pretty tough recruitment market. So our just chatting with our our payroll and rewards manager and our HR team. They’ve said that payroll on benefits has actually reduced the number of queries coming through to the team about understanding tax changes to tax codes, employees being confused about payslips. And those last p 60. And last p 11. D queries that you always get a flurry for when it comes to self assessment time. So it’s it the admin, the admin, once you’ve rolled it out, the administration just becomes a lot simpler and a lot smoother. We are delighted to say that Cypher has been voted top 35 in the most loved workplace rankings for 2022. So that’s a really great endorsement for our employee satisfaction, and happiness. And this, this surely is a part of that. So to summarise, so p 11. Ds. And again, it might be the responsibility of your tax department, your finance team, or even your accountant or your accountant, it might not be something that you have to deal with at the moment. So the thought of bringing into payroll actually doesn’t agree with you at all, that’s fine. But actually bringing the process into the payroll team, although it might increase the responsibilities of that team is a really cost effective way to manage reportable benefits. Particularly if p 11. D is a paid service or you know, you’ve got a separate software package that you’re having to pay for to put those through. So it’s an excellent benefit to the employees as well, of course making income tax much much easier for them to understand. Seifer supports customers, both with our so Cypher payroll software solution and our bureau service as well. So whatever your needs, we will help you to ensure your accuracy and compliance. And we’ve we’ve got good experience of implementing this in our customers. So any questions that you’ve got, then you’ll be in really good hands with our team. So yeah, so that’s that’s the end of the presentation today. Back over to Kathryn.
Cathryn Newbery, Ciphr 39:30
Thanks so much, Amanda. I’m just gonna talk for a second to give you a bit of a break though. Thank you. Thank you so much about payroll and benefits income and hopefully that been interesting and relevant to what you are hoping to find out from today’s broadcast. We have some time now for Amanda to answer your question. So if you have any questions than the menus in the control panel on your screen now and we’ll do our best to answer them as best we can. I just I just start off with one Amanda you said not to leave it too late like don’t even to the end of the tax year to make this switch and actually start thinking about it now, do you have an estimate of how long it can take a typical organisation to make the move away from P 11 days to pay rolling benefits the client actually getting that all set up and communicated?
Amanda Barnden, CIPHR 40:16
That’s a really great question, I can say my best advice is to say we’re looking at April 23. Now, so you’re gonna need the spring easily, I would say a good two or three months to make sure that, firstly, that if you if you’re running your payroll in house, or if you’re working with a payroll Bureau service provider, that they have time to review the types of benefits that you want to pay roll, set up new wage types. So you’re going to need those set up on your your Payroll solution, to go through a little bit of testing. And make sure that you’re getting the reporting, you’re getting that you know, summaries that will be available so that you’ve got your class one a. So but then also time for that communication with your employees. So that I’d give it three months easily. Just to make sure that you know, if there are any questions coming back from your employees as well, that you’re able to maybe adjust your comps, but also to make sure everyone has the information they need.
Cathryn Newbery, Ciphr 41:25
Sure, and the people who are joining us and they’re using our Cypher HR solution, but not so big as Payroll Solution is there reporting available info for HR, so they can share that data with their existing payroll Bureau to help get set up with payroll and benefits.
Amanda Barnden, CIPHR 41:42
There’s a couple of different areas in the cypher HR platform that you would be able to maintain those sorts of records. So firstly, you’ve got your allowances area. So in the allowances area, you will be able to create an allowance for that pay rolling benefit in kind. So you can just created that in your code tables. So that that value is there, that value can also come through to your total rewards statements as well, if you’re using those, but then we’ve also got the Additional Information area. Now additional information is an area within your Cypher HR system where you can create whole new pages with multi tabs. And you can create your own sort of date fields, note fields, values, tax fields, and so on so that you can build out a lot more information about that benefit. We can integrate to any of that data. If you’re using a benefits platform provider like benefits or amber. We can we can have that integration. But then anything that you create there, of course you can, it will then be available to your report writer. So you’d be able to create your own reporting, or an export of that data to your payroll provider, whoever you’re using.
Cathryn Newbery, Ciphr 43:00
Okay, great. And if our customers needed a bit of help we can setting those out. That’s something we can help with your customer success team.
Amanda Barnden, CIPHR 43:08
Yeah, definitely. Yeah, so please do approach your customer success manager. And we’ve just launched a new service desk platform as well using Zendesk. And that’s got a lot of FAQs. And so we’re starting to build that out as well. So that will become a really great place for you to be able to run the live videos or screens, screenshots and stuff. Also, the cypher Academy is gonna have a lot of help for our customers. So if you’d like to self serve, and go and find out things for yourself, of course, then we’ve got lots of different media and platforms for you to find that but yeah, just email or phone, your your customer success manager, and there’ll be able to help you.
Cathryn Newbery, Ciphr 43:54
We have one question. You said you mentioned that you need to start paying running benefits at the beginning of the tax year. Is there any way we can start payrolling a benefit midway through the tax year? They are looking to implement electric vehicles to salary sacrifice, can they start it now? Or will they need to p 11. D for these now a payroll from April.
Amanda Barnden, CIPHR 44:11
Pay level two can only be full tax years. So you will need to wait until the following tax year. Okay,
Cathryn Newbery, Ciphr 44:19
that’s great. Another question here. Is there still a responsibility to share the PLM and d values to employees at the end of the tax year by a payslip or a different form for example?
Amanda Barnden, CIPHR 44:31
Yes, there is, provided there’s sufficient information on the payslip then that’s absolutely fine. There is that requirement to make sure that employees receive that information by the first of June. So whether you’re doing that by the payslip or a letter or email or you know, some kind of communication, that yes, you must do that, that that is a part of your tax Rand obligations.
Cathryn Newbery, Ciphr 45:00
Thank you. i This organisation and new joiner this year has a ban and feel benefit which will be reported on P 11. D next year, there’s a choose to payroll this benefit from April 23. Is there a risk of them paying double tax next year? The employee?
Amanda Barnden, CIPHR 45:17
So they will so the Yes, so you’re going to be reporting that first year on P 11. D, and they’ve paid no tax on it at all. So there will be back tax payable on that. So the HMRC are going to send them a bill for it. So they can clear that they can just pay it if they’re saving. If they if they’ve got an idea of how much tax liability they’re building up. So they could just pay it off, or the HMRC are going to adjust their tax year for the 2324 year.
Cathryn Newbery, Ciphr 45:48
And what happens if you register with HMRC? But then it comes down to it, you’re not ready to implement it from the new tax year?
Amanda Barnden, CIPHR 45:56
Oh, gosh, I don’t know. I’ll find out. I’ll find out. We’ll follow that one up.
Cathryn Newbery, Ciphr 46:01
Okay. Thanks, Michelle, for your question. We’ve got that noted down. So we’ll look into that and come back to you. And maybe there’s a benefit. It’s like an allowance, you enter the full allowance at the start and edit to what was actually spent at the end of the year. Would you only tax the full amount? Whether or not it’s spent in full? Oh, that one.
Amanda Barnden, CIPHR 46:22
So run that one by me again. So she knows it.
Cathryn Newbery, Ciphr 46:26
And then they don’t spend the full allowance. How do you? How do you figure that out? Given that they may have already spent the 50% of it?
Amanda Barnden, CIPHR 46:34
It’s nothing to do with spending it they’re actually receiving a taxable benefit. So for example, the employer is paying your your Bupa membership. So it’s it’s already been spent, essentially, seven not quite following that one. If that’s an example, then please do send that through to us. That’s fine. I’ll be happy to tell you
Cathryn Newbery, Ciphr 46:58
a little bit confusing that when if you send us more information, we can pick that up on offline afterwards and look into it for you. Sorry, it as always with things payroll and tax, it’s a bit tricky to cover every single scenario on a call because we don’t have everything else. Okay, and I think that’s all of our questions for today. Amanda, you’re Oh, no, we’ve got one more out there that say you’re off the hook. But how do you said that organisation has changed employees company cards in May this year, would you suggest waiting until April 24 to start payroll in the benefiting point.
Amanda Barnden, CIPHR 47:37
So I think this comes back to making the election for payroll and benefits and kind again, so. So if a car is available this year to an employee, then that’s still going to be P 11. D reportable. But if it was an existing car, there’s already going to be an adjustment in their tax code for this year on that. So there’s no reason why you can’t stop and pay rolling benefits from APR 23. For those cars. Okay, from great from, as I understand the question, if I’m understanding the question, right, yeah,
Cathryn Newbery, Ciphr 48:13
lovely. Thanks very much. Okay, I’m gonna close the q&a, though. If you have any further questions, you can get ahold of us after the broadcast, you can email us at email@example.com. And we’ll get those across to Amanda. And if you’re watching live this email, this recording will be emailed to you tomorrow, so you can revisit any information that we’ve covered or share it with a colleague. If you’d like to learn more about cybers payroll solutions or an HR offering, you can opt in using the exit form on your screen after the broadcast. And that form also asks you for a bit Are you back about today, podcast and ideas for topics that you might want to see from us in future webinars. So we’re always grateful if you take the two minutes to fill that in. And our next webinar is actually about health and while being going the extra mile to help your employees. And I’ll be joined from experts from a couple of our partners, one of them we refer to today as Amber’s employee benefits provider. And we’ll also be joined by employee safety technology provider people say for that one on the eighth of December. And so if you’re interested in joining us, then please register at bit.ly/cyber health. And it sets to be a really good way to kind of set us up with ideas for supporting employees well being going into the new year, which is already the time when lots of people like to start healthcare. So it’s a great time to be talking about it. And thank you so much for joining us today. Amanda, thank you as always, for all your payroll expertise and building a question. I really appreciate it. And we hope to see you at another webinar again soon. Otherwise, take care. Have a good day. Bye bye. Thank you, bye bye
About this webinar
This informative webinar from Ciphr – leading UK providers of integrated HR and payroll solutions – demystifies the BIK payrolling process, and explain the pros and cons of switching from P11Ds to payrolling of benefits.