Organisation response to be submitted to: HM Revenue & Customs. Date of submission: 4 October Author: Helen Hargreaves.

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1 Page 1 Formal consultation response from the Chartered Institute of Payroll Professionals in respect of: Alignment of dates for making good on benefits-in-kind Organisation response to be submitted to: HM Revenue & Customs Date of submission: 4 October 2016 Author: Helen Hargreaves

2 Dear Sirs Introduction By Page 2 The Chartered Institute of Payroll Professionals (CIPP) is grateful to have the opportunity to comment on the consultation for the alignment of dates for making good on benefits-in-kind. We are pleased to be able to feed into the policy and operational changes that arise from this consultation, and hope that this written response will form the basis of an ongoing relationship with HM Revenue & Customs (HMRC). The CIPP gives permission for you to include us in the list of organisations involved in the consultation exercise. Company information about the CIPP and its role in representing employers can be found at the end of this response. Purpose of response The purpose of this response is to inform HMRC about payroll professionals attitudes towards the alignment of dates for making good on benefits-in-kind. Summary of key findings An electronic survey was issued to CIPP members and 17 replies were received which form the basis of this response. The full results are shown on page four of this document however the key findings are as follows: 83% of respondents agreed that the date for making good for company cars, company vans and the other benefits-in-kind set out in the consultation document should be the end of the tax year. 90% agreed with the suggested date of 1 June following the end of the tax year as the making good date for car and van fuel benefit, credit tokens and beneficial loans. 88% of respondents agreed that interest paid after the benefit-in-kind has become final and conclusive should be taken into account for employer-provided loans. Should you require clarification of any of the points that have been made in this response, please do not hesitate to contact me or another member of the Policy and Research Team. Yours faithfully Helen Hargreaves MSc FCIPPdip Associate Director of Policy & Research

3 Contact details: Associate Director of Policy & Research Page 3 Senior Policy & Research Officer Samantha.mann@cipp.org.uk Senior Policy Liaison Officer Diana.bruce@cipp.org.uk

4 Full survey results Question 1 83% of respondents agreed that the date for making good for company cars, company vans and the other benefits-in-kind set out in the consultation document should be the end of the tax year with one respondent commenting: Page 4 I agree that it should all be aligned; this would maintain tax codes in real time without having under or overpayment of tax to adjust each year. Feedback from staff is that the tax adjustments are confusing and not broken down enough when advised of new tax code or any adjustments. However, when asked if there were any practical difficulties in making good by the end of the tax year for these benefits one respondent cited the following issue: If an employee gets a new car, gives one back or changes the vehicle in March and up to 5th April we won't be informed until after both our final payroll and tax year end routines have both run. Given that we payroll the benefit, an adjustment of some nature to the value that went through in that tax year is required. Common sense would say that this should be done at the earliest available opportunity in the next tax year, ideally in Month1, and no adjustments via EYU should be necessary. Question 2 When considering the making good date for car and van fuel benefit, credit tokens and beneficial loans, 90% agreed with the suggested date of 1 June following the end of the tax year. Though the majority could not think of any practical difficulties this would cause, there were two comments which are worthy of consideration: It's bad enough trying to be accurate in filing RTI by the on or before date - I can only imagine the chaos. With the P11Ds, it does give time to ensure the information is accurate from my clients and I can highlight one in particular! The tax year is to the 5th April however most monthly payrolls will pay employees to the 31st March therefore the full value of fuel used would not be available for calculation until mid-april. Question 3 88% of respondents agreed that interest paid after the benefit-in-kind has become final and conclusive should be taken into account for employer-provided loans, with one respondent commenting: If the interest is within the same tax period it should be accounted for. Good audit practice. Question 4 There was less certainty over the issue of making good within the earnings period for non-cash vouchers and credit tokens in order to remove the NICs liability, summed up by the following comments: These items are dealt with by another department so they are generally dealt with a month in arrears. If this can be defined as the Earnings Period then there's no problem. Possibly at tax year end, but through the remainder of the tax year, I don't see any particular problems.

5 Company Information The Chartered Institute of Payroll Professionals (CIPP) was established as an official industry body in 1985 when the Institute of British Payroll Managers (IBPM) was formed. In 1998, the IBPM merged with the Association of Pensions and Superannuation Administrators (APSA) to form the Institute of Payroll and Pensions Management (CIPPM), which became the Institute of Payroll Professionals in September 2006 and was granted Chartered Status in November The CIPP is the Chartered Institute for payroll professionals in the UK and currently has in excess of 10,000 members enjoying a range of benefits. In addition, the CIPP is the UK s leading provider of education for payroll, and has established the friends of automatic enrolment which is responsible for bringing together and educating all of those responsible for implementing automatic enrolment for pensions. Page 5 The mission statement of the CIPP is: Leading payroll and pension professionals through Representation The views of the Chartered Institute are sought and valued by Government departments and other organisations, as witnessed by its representation on bodies ranging from HMRC, and other external Employer Consultation Groups. The Institute, through its Policy team headed up by Helen Hargreaves, has been responding to consultation documents and attending consultation meetings for more than 17 years. As a result of this sustained effort, we have created sound working relationships with the DWP, HMRC, BEIS and other Government departments. The Chartered Institute operates an Advisory Service staffed by professionals able to provide accurate and authoritative advice on a wide range of topics. It also runs national forums which allow members direct contact with representatives from HMRC and other relevant bodies and also provides a forum for members to input and feedback on the CIPP s policies. Education The Institute validates and controls a wide range of professional qualifications in both the payroll and public sector pensions sectors, from Foundation Degree level to Masters level. CIPP Education, a wholly owned subsidiary of the CIPP, delivers the qualifications and provides tutors at officially recognised standards. CIPP Education also runs a comprehensive range of short training courses throughout the UK. Events The CIPP also runs a series of conferences throughout the year, culminating in the Annual Payroll & Pensions Conference and Awards Ceremony.