Benefit in kind from employer?

JCC1234

Hi there

A gift was given by the employer as Christmas gift but I am not sure if this is deemed as employment benefit, though the employer has confirmed that they will take care of any tax /NI arising and that there is no need for the employee to declare.

I am no expert on tax matter though I tried to look for some details...

1. The employer responsible for reporting the tax matter to HMRC  related to the benefits in kind.

2. Depending on the nature of the BIK, the employer may choose to payroll, file via P11D, or by way of a PAYE Settlement Agreement with HMRC.

3. If this is payrolled, it will be reflected on the payslip and P60.

4  If this is via P11D, this will be sent to the HMRC and the employee will be given a copy. This is done after the Financial year.

5. If this is via PSA, the employee would not be notified of, as nothing concerns the employee.

There should be no issue in the case of payrolled, nor is there any under the PSA, from the employee's perspective.

So....my questions are:

1. If there is no P11D reported (and copy or relevant information given to the employee), how can the employee report the employment benefit section under the self-assessment? (or more generally, how should an employee normally report the employment benefits?)

2. How the employer deals with the tax matter is not within the remit of the employee and actually the obligation should not fall on the employee. However, in the event that such benefit is undeclared by the employer for whatever reason, who should take up the responsibility ?

3. In the event of underpaid tax by the employee as a result of the undeclared benefit by the employer, what would normally happen? Will the employee receive a penalty from the the HMRC as a result of the undeclared self-assessment, which, is as a result of no P11D was given to the employee?

The tax, if any, related to the gift should be no more than £100 but I am really confused about the complications of responsibilities here...and the actual steps that would normally be undertaken by the HMRC.

Most grateful if you can share your insights...

Many thanks.

EnPointe

what is the gift and what is the value of the gift ?

[Deleted User]

A very long post but it would appear to me that only the first paragraph is relevant. 

No P11D reporting is necessary as nothing has been received which has not dealt with through payroll.

Is there a reason to dispute employer’s assertion that they will not deal with as confirmed?

JCC1234

Thanks. There is no such assertion but instead it's a bundle of what-ifs, as I would like, and always tend to, know the worst scenario...

Assuming the employee is still obliged to report an one-off benefit even though no P11D was reported by the employer and no such form given to the employee, what action would HMRC take against the employee for an underpaid tax as a result of omission on reporting the same through the employee's self assessment ?

Andy_L

"You don’t have to pay tax on a benefit for your employee if all of the following apply:

• it cost you £50 or less to provide
• it isn’t cash or a cash voucher
• it isn’t a reward for their work or performance
• it isn’t in the terms of their contract

This is known as a ‘trivial benefit’. You don’t need to pay tax or National Insurance or let HM Revenue and Customs (HMRC) know.

You have to pay tax on any benefits that don’t meet all these criteria."

https://www.gov.uk/expenses-and-benefits-christmas-bonuses/what-to-report-and-pay

https://www.gov.uk/expenses-and-benefits-trivial-benefits

[Deleted User]

JCC1234 said:

Thanks. There is no such assertion but instead it's a bundle of what-ifs, as I would like, and always tend to, know the worst scenario...

Assuming the employee is still obliged to report an one-off benefit even though no P11D was reported by the employer and no such form given to the employee, what action would HMRC take against the employee for an underpaid tax as a result of omission on reporting the same through the employee's self assessment ?

None. In that unlikely scenario there would be an underpayment of tax - that’s it!