Aligning the dates for ‘making good’ on BiKs | KPMG | UK
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Aligning the dates for ‘making good’ on BiKs

Aligning the dates for ‘making good’ on BiKs

As promised at Budget 2016, a consultation on aligning the dates for when employees need to ‘make good’ on BiKs has been published by HMRC.


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Presently there exists a range of dates by which an employee must ‘make good’ on a benefit in kind (BiK). For some BiKs there is more than one date specified in the legislation (depending on whether the employer reports using RTI or not) and for others there is no statutory date. Different dates exist for NIC purposes and, for some benefits HMRC’s guidance is that payments should be made without unreasonable delay even though that does not accord with the statutory rule.

As such, to bring some order to this area of the law, the Government is proposing to align the dates for ‘making good’ on all BiKs (payroll or otherwise) as follows:

  • The default rule is that ‘making good’ should take place before the end of the tax year; but,
  • Specifically identified benefits where there are practical difficulties will have a deadline of 1 June following the tax year end.

The benefits which the Government is proposing should be subject to the 1 June deadline are:

  • Car and Van Fuel benefit;
  • Credit Tokens; and
  • Beneficial Loans.

The added advantage of having a 1 June deadline is that it will ensure that any ‘making good’ will also be effective for Class 1A NIC purposes as these new proposed deadlines will pre-date Form P11D deadlines in July, meaning that employers will have time to ensure that they can be prepared accurately.

However, it still remains that other benefits including medical insurance and living accommodation will be required to be ‘made good’ by 5 April to remove the need to complete Forms P11D and mitigate any BiK Class 1A NIC charge that will be payable by 19 July following the end of the tax year. Furthermore, any benefits that attract Class 1 NIC (not Class 1A NIC) (e.g. Non-cash vouchers) will need to be made good within the relevant earnings period for no NIC charge to arise.

The impact assessment for the Exchequer is listed as negligible meaning HMRC expect this to be purely an administrative change and not a revenue raising measure, although the consultation does note that HMRC have encountered instances of the current rules being manipulated.

Employers should also continue to consider voluntary payrolling of benefits to reduce the administration of completing Forms P11D following the end of the tax year. A previous article on voluntary payrolling of benefits can be found here.

Responses to the consultation have been requested by 4 October 2016. KPMG welcomes this consultation and your views. If you would like to discuss this consultation or any of the reform options further, please do get in touch with your normal KPMG contact.


For further information please contact :

Mike Lavan

Ian Goodwin

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