Updated Booklet 480

On 13 September 2017, HMRC published their booklet 480 for the 2017-18 tax year. The booklet is HMRC’s interpretation of the tax legislation as it relates to expenses and benefits and is, essentially, a payroll professional’s ‘Bible’ of expenses and benefits processing. It includes the long-awaited guidance on how to deal with provision under OpRA (Optional Remuneration Arrangements).

Booklet 480 should really be read alongside the CWG2 ‘Employer further guide to PAYE and NICs’ and the CWG5 ‘Class 1A National Insurance contributions on benefits in kind’. These HMRC interpretation documents do not seem to have been updated significantly in respect of OpRA, at least I couldn’t see it.

Literature more relevant to software developers is contained in HMRC’s recently-updated ‘Schema and supporting documents’ that deals with internet submissions of the P11D, P11D(b) and P46(Car).

If you payroll benefits in kind and are looking for guidance, you may have a long search. Currently, the only guidance is contained in Employer Bulletin 67, which contains an article about an HMRC ‘concession’ for 2017-18. This says that we have to calculate the payrolling values as per the updated Income Tax (Earnings and Pensions) Act 2003. The reason for this is that the governing payrolling legislation (the PAYE Regulations 2003) was not updated at the same time as the 2003 act and there seems little desire to update these retrospective to 6 April 2017.

The result is that the 2003 act tells us to calculate the taxable value one way but the 2003 regulations tell us to calculate it another way. To my mind, this ‘concession’ is asking us to payroll benefits as per the 2003 regulations except when it comes to the part about payroll benefits that have been provided under OpRA. Considering that the Employer Bulletin is only HMRC’s guidance/interpretation, I really cannot see that this way of working holds up from a legislative perspective. However, who am I to argue?!