We’re really pleased that you can now use Xero Payroll to set up company car benefits, assign them to employees and file PAYE tax on the benefit – as part of your Real Time Information(RTI) submissions to HMRC.
Also, Xero Payroll now calculates a company van’s cash equivalent value for you and takes into account factors that will reduce the employee’s tax on the benefit – such as whether the van is shared.
This is another time-saving feature introduced to Xero Payroll which already caters to other employee benefits – such as private medical and dental insurance.
By reducing the administrative burden associated with employee benefits, the new Xero Payroll feature will save you precious time so you can get back to business.
More benefits include:
- Automatic calculations – making manual calculations are a thing of the past
- Real-time HMRC submissions – including tax due in every pay run
- No more P11D form – another task that’s automated to save you time
- Cost effective – the feature caters to all payrolled benefits in kind, so you can now reduce the need for third-party software.
If you registered for car benefits with HMRC before April 6 2019, you can payroll car benefits in Xero from launch.
If you haven’t registered for car benefits with HMRC by April 6 2019, you will still see the new feature (option to create the new pay items) in Xero, but you should not payroll car benefits in Xero until the next tax year. Don’t forget to register with HMRC for car benefits by April 6 2020 as it will help you manage payroll faster and more effectively next year.
Once you’ve added the benefits for each employee, just process your pay run as usual, and Xero will automatically calculate the correct benefit charges and deductions for the pay period.
You’ll see the benefits and relevant tax as you process your pay run. Your employees will see a breakdown of their benefits on their payslip.
To find out more on how to set up a benefit in Xero Payroll, see our Xero Central guide.
When Interest free/low interest loans and accommodations are supported through RTI by HMRC in the future, Xero will make this available in the product.
If you’ve yet to try Xero, you can easily sign up for a free 30 day trial. And if you’re a current Xero user but need some more assistance with your accounts, get in touch with the team. You can email us at email@example.com or call the office on 01858 289189.
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