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How to report company car benefits to HMRC using the payrolling method
16 March 17 | By: Jas Jhooty
As an employer who uses the payrolling method to report your employees taxable benefits and expenses, you should send the taxable amounts to HM Revenue and Customs (HMRC) using a Full Payment Submission (FPS).
From 6 April 2017 you’ll also be able to send HMRC information about the cars your employees use (if your payroll software has been updated). This method is similar to sending information on form P46 (Car) which is sent by employers who don’t payroll car or car fuel benefit.
Sending information about car data is not mandatory for tax year 2017 to 2018. Employers are still able to use a form P46 (Car) if they prefer. HMRC intends to consult on introducing regulations from 6 April 2018.
Completing the fields
The headings below show you what details to include in each field.
Make and model of car
Enter the make and model of the car provided.
Enter the approved CO2 emissions figure as shown on the Vehicle registration certificate (V5C). The CO2 value does not apply to cars first registered before 1998. This can also be the same for some rare car models imported from overseas. For these cars enter ‘X’ in this field.
Select either ‘D’ for Diesel cars or ‘A’ for all other cars.
This field helps you identify which car you have allocated to an employee, for instance where same models are provided. We recommend you record the car registration number.
Enter the calculated price. The calculated price is the list price of the car added to the price of any accessories. Then subtract any capital contribution paid by the employee. Payments for private use or amounts ‘made good’ aren’t taken into account in this calculation.
Date car available from
Enter the date the car was first made available on the next FPS that the employee is paid. You should enter 6 April in the first FPS if the car was available from that date.
If a new car or another car is made available after sending the last FPS for a tax year. You should use the first FPS of the new tax year and the ‘available from’ date should be completed with a date of 6 April.
To address the tax payable for the period of availability in the previous tax year you should recalculate the taxable amount and the tax due. Then send these through as you would with any amendment to taxable pay in an FPS or an Earlier Year Update (EYU).
Date car available to
Enter the last date that the car is made available. You can’t record a date later than 5 April in an FPS for the same tax year.
If a car is no longer made available after sending the last FPS for a tax year, there is no need to send an amended FPS for car data in the next tax year. An ‘available to’ date prior to 6 April would be rejected. A month 1 FPS can’t be sent as an amendment for car data with 31 March. For example, if the last pay day is 20 March and the car was made unavailable at 31 March.
Payrolling taxable amounts must be amended for the last FPS or included in an EYU to show the revised taxable amount. This is because the employee will have paid the wrong amount of tax based on the availability of the car to the 31 March.
Enter the expected cash equivalent when sending information for the first time.
Date free fuel provided
Enter a date of 6 April if fuel is provided from the start of the tax year, otherwise enter a date during the tax year where you have agreed to provide free fuel.
Cash equivalent of fuel
Enter the expected cash equivalent of fuel when sending information about a car, made available to an employee with fuel.
Date free fuel withdrawn
Enter the date free fuel provision was withdrawn. If free fuel was withdrawn at the end of the previous tax year but is not provided in the new tax year, this field doesn’t require completion.
There is an Amendment indicator that should be marked as a ‘yes’ if a correction is required during the tax year for the any of the above fields.
You should then enter the revised details for one or more of the above fields on the next FPS within the tax year. If you only need to submit a change to car data but not pay and tax details you should:
- leave the pay in period fields blank
- include the latest year to date pay and tax details
In the event where no payment of income is made in the next pay period, you need only report the change of car data. For example, if the employee is paid irregularly.
If the wrong car data is discovered after you send the last FPS, you should send the correct details in the first FPS within the new tax year, if the car is still made available. The amendment indicator should not be used.