Taxable Benefits Calculation Card

As an employer, you must decide and agree with the HMRC the benefits you will process by payroll and which ones you will report on the P11D for your employees.

You can use the Taxable Benefits calculation card to select, by benefit type, whether the benefit is to be processed in payroll. If there's no calculation card present at the TRU-level, the default is P11D reporting. Regardless of whether the benefit is reported on P11D or processed through payroll, you must enter the values for all taxable benefits on this calculation card.

Organization-Level Taxable Benefits Calculation Card

You must indicate all benefits that you want to process through payroll for a tax reporting unit (TRU). To do this, you must create a calculation card using the Legal Reporting Unit Calculation Cards task at the organization-level, and specify whether you want to process the benefit through payroll or P11D reporting. You can do this for all benefits except the ones listed below, which you can report only through P11D reporting as stated by HMRC:

• Qualifying relocation and expenses

• Interest free and low interest loans

The default values apply to all employee in the TRU. You can use the personal calculation card to override these values at the employee-level.

Note: If you don't create a calculation card at the TRU-level, it means that P11D Reporting will be used for all employees in the TRU.

It you set the option for a benefit for the TRU, you can only change it when the tax year changes. If you want to make any change required during the tax year, you must do so at the employee-level.

Taxable Benefits Calculation Card for the Employee

Use the Calculation Cards task under Payroll to create a Taxable Benefits calculation card for the employee. Search for the person and use the Add option to create a calculation card. Select the effective date and the name as Taxable Benefits. Once the calculation card is created, you can create the calculation components for the benefits.

For each benefit you provide to the employee, use the relevant calculation card component to enter the required data. Each component corresponds to different component details with attributes depending on the information required to calculate the cash equivalent for that benefit.

Note: You can create these components anytime during the tax year with an effective date, as required.

You can change the employee's Benefit calculation component option from payroll processing to P11D Reporting any time during the tax year. Once you set it to P11D reporting, or if the TRU option is set to P11D reporting, you can't change it to payroll processing.

Note: You must enter the data for all taxable benefits on the Taxable benefits Calculation Card regardless of whether they are reported on P11D or processed by payroll.

You must enter any benefit that runs across multiple tax years as annual values, for example, Cars, Vans, and Loans. The processing rule determines if it is an annual benefit that needs to be calculated down to a periodic value, or if it must be taxed as the whole amount in one period.