How to Treat Certain Expenses and Benefits Provided to Employees During COVID-19 Update
The government have released an updated guidance on how to treat certain expenses and benefits provided to employees during COVID-19. This guidance is about Income Tax treatment only. National Insurance contributions treatment may vary depending on the individual benefit or expense.
Find out about taxable expenses and benefits when they are paid to employees because of coronavirus and how to report them to HMRC. The guidance discusses:
- Volunteer fuel and mileage costs
- Paying or refunding transport costs
- Company car ‘availability’
- Employee Car Ownership Schemes (ECOS)
Covid-19 has impacted everyone’s normal routine and day to day lifestyle, this section covers the following areas:
- Living accommodation
- Free or subsidised meals
- Salary sacrifice
- Employer provided loans
- Employees working from home
How to report to HMRC
Any expenses or benefits which are related to coronavirus can be reported on your PAYE Settlement Agreement.
If you are currently payrolling benefits in kind, you may continue to report expenses and benefits through your payroll as long as you’ve registered with HMRC before the start of the tax year (6 April). You may also continue to report expenses and benefits through P11D returns.
HMRC expects all P11D and P11D(b) returns to be completed online by 6 July 2020 for the tax year 2019-20, paper options are available for employers unable to file online.