To set up a car benefit follow these instructions:
- Navigate to Payroll Settings.
- Select Pay Run Settings
- Then go to Benefit Categories and click on the Add button.
- You can make the following selections:
Year - Select the year that is the start of the tax year you wish the benefit to run for.
Carry benefit forward - This is ticked by default but can be unticked if required. It is used by the carry forward wizard at the end of the year.
Benefit type - Click on the benefit type drop down list and select 'F: Cars and Car Fuel'.
Once you have selected Cars and Car Fuel further options will become available to you:
Underneath the Benefit type you will see there is a 'Payrolling Benefit' tick box. This will be ticked or unticked by default depending on your benefit processing option selected, for more information on payrolling benefits please see this article.
NI treatment - The NI treatment for this benefit is set by default.
Name - You should give your benefit category a name.
Registration number - Enter the registration number of the car you wish to provide as a benefit. You should use the vehicle registration document, or use the link provided, where you can access the DVLA database to print the relevant details for the car you are providing.
Make and model - Enter the make and model of the vehicle
Date first registered - Enter the date the car was first registered as per the V5C.
List price - Enter the list price, plus VAT and any accessories which were purchased at the time of purchasing the vehicle.
Fuel type - Select from the drop down list the fuel type which relates to the car.
Approved CO2 emissions - Enter the value of CO2 emissions this can start from 0. If there is no approved CO2 figure then you should tick the 'No approved CO2 figure' box. DO NOT tick this box if the Approved CO2 emissions value is 0.
Engine size - This field will only be available if there is 'No approved CO2 figure' - select from the drop down list of engine sizes.
Zero emissions mileage - only enabled if if the CO2 emissions are 1-50g/km inclusive.
Click 'Save' to save the benefit category.
The next step is to add the car benefit to an employee.
As one car benefit is linking one car to one employee and there are multiple additional fields to add on the employee side of a car benefit, it is not possible to link an employee from the benefit category linking panel. Vans and P11D loan benefits should also be added from the employee details, they cannot be linked via the linking panel.
You will need to navigate to the employee that the car is to be added to and click on 'Benefits'. Click the 'Add' button. Select the name of the car benefit you set up above.
You will see that a number of the fields are disabled that have been pulled through from the record.
The following fields are not disabled:
Carry benefit forward - This will reflect the setting from the benefit category, if the benefit category is ticked this can be ticked or unticked at employee benefit level. If this is unticked at benefit category level, then this cannot be ticked at employee benefit level.
The next fields will need to be filled in by you:
OpRA Amount foregone - Enter a value here, if the employee has an OpRA (Optional Remuneration Agreement) in place for this car benefit.
Date car was available from - This is a mandatory field - you need to enter a date.
This should be either a date in an earlier tax year or a date within the tax year of the benefit, (if the car was given in-year).
Date car was available to if left blank this is assumed to be to the end of the tax year 5 April - you can enter a date here if the car was withdrawn in the tax year. This date should be a date within the tax year of the benefit.
Number of days car was unavailable - Only enter a value in this field if the car was unavailable for more than a period of 30 consecutive days.
Additional accessories - These are any additional accessories which were added at a date later than when the vehicle was purchased.
Capital contributions - any capital contributions made by the employee towards the cost of the car (limited to £5000.00).
Amount paid by employee for private use of car - An amount which the employee pays towards the private use of the car.
Car is shared - Tick this check box if this car is shared.
Share % - Field shows if the Car is shared check box is ticked. Enter the percentage for this employee's share of the car (there is no system check on whether the overall Share % equals 100 between the employees who share this car, so this validation must be performed manually by you).
Cash equivalent or relevant amount for car - calculated field based on the car information entered.
Calculate benefit from - Defaults to Period 1 (if car benefit is payrolled then this period value is used to divide the Cash equivalent by the number of months specified here, to give the Amount to be payrolled each period). This field is only used until a pay run has been processed, after which time the field is disabled and the calculation will use the actual remaining pay periods.
Amount payrolled to date for car - if car benefit is payrolled and you have moved to the payroll platform during the tax year, you may need to specify the amount of benefit which has already been payrolled to date. Note you will also need to update the opening balances payrolled benefits area with the total of all the payrolled benefits for the employee.
Amount to be payrolled each period for car - if car benefit is payrolled then this is a system calculated field.
Pro-rata in first pay run - If car benefit is payrolled - tick this option if you would like the car benefit to be re-calculated, in the first pay run to account for the number of days the car was available in the first pay period.
Employer provides fuel for private use - Only tick this box if the employer is providing fuel for private use.
If the private use fuel is provided then the following fields are visible.
OpRA Amount foregone - Enter a value here, if the employee has an OpRA agreement in place for this car fuel benefit.
Date free fuel was provided - This can be left blank if the fuel benefit started from the beginning of the tax year, or is the same as the car available from date, enter a date if the fuel benefit started after the start of the tax year or after the date that the car was given.
Date free fuel was withdrawn - can be blank if the fuel benefit was available to the end of the tax year, enter a date if the fuel benefit was withdrawn before the end of the tax year.
Fuel re-instated - this check box is only available if there is a value in the 'Date free fuel was withdrawn' field, only tick this check box if the fuel was re-instated after it was previously withdrawn.
Cash equivalent or amount foregone for car fuel - calculated field based on the car and car fuel information entered.
Save button - once you have verified the calculated values, press the Save button to save any changes and calculated fields
Cancel button - if you have entered incorrect information and need to start again, press the Cancel button.
Any cars which are payrolled will be reported to HMRC via the FPS. Cars for P11D will need to be reported via the P46(Car) report for more info on the P46(Car) report please see this article.
For detailed information on Car and car fuel benefits, please refer to the HMRC guidance.