1. Improving the P11D Process
Paul Rains MIPP
Transact HR Ltd
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Agenda
A typical process for Benefit in Kind Administration.
Case Study – PAS, P11D Organiser
Improving the benefit in Kind administration and P11D reporting process
Benefit Strategies.
Future Considerations.
Green Travel Initiatives.
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Is this your P11D Process?
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A Typical P11D Process
Involves the collection of data from various sources in various formats from.
Payroll
Accounts Payable
Fleet HR
Personal Assistant’s / Legal
Only carried out once a year
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Typical Process Flow
Private Medical
HR system
Company Car /
Vans
- Fleet System
Fuel Cards
/ Telephone
Accounts
Business
Mileage, Loans
Contributions
to cars
Payroll System
P11D system
Accounting
System
HMR&C
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Typical Issues
There is no single source responsible for all benefit in kind data. It has to be captured from various sources
Managers / Employees do not alert the fleet company / team when Company Cars are returned at the end of the lease.
Employees swap company cars without the employers knowledge.
Medical cover levels are not changed due to lifestyle changes not being captured.
Pool Cars are used but no one is told.
Fuel cards are supplied but not recorded.
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P11D systems
Best of Breed
P11D Organiser from PAS
ERP systems
Oracle
SAP
Integrated Solutions
Team Spirit
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Case Study
RAC Motoring Services
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9. How did PAS Ltd help the RAC?
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RAC Benefit Profile
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P11D Query Analysis
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12. P11D Queries by Benefit Type
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Reasons for BIK Issues
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14. Reasons for Issues by Benefit Type
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15. Issues that needed addressing
All BIK Data and people movements were only captured at yearly intervals. Issues that arose were often distant memories and could not be resolved easily.
Vehicle movements were not always being captured and when captured often had overlapping dates.
HR were not accurately maintaining the PMI data, dates overlapped and the incorrect level of cover was being applied.
People reported not receiving their benefit statement for checking or if they did receive it had little time to notify us of the inaccuracies.
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How did PAS help the RAC
Benefit data automatically aligned to start / leave dates.
Option to import data of all vehicle movements from our own fleet management system on a monthly basis.
The system validated data upon import to check for overlapping dates and missing information.
Easy monthly import routine from our payroll system.
Electronic filing
Ability to P11D benefit statements.
Bespoke P11D report to print on our own payslip / P60 stationary.
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17. P11D Reporting Process Improvement
Adopting a LEAN approach to Benefits in Kind and the P11D reporting process
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The Lean P11D process
Capture all BIK data at source using a self service web portal.
Capture the cash equivalent value of all BIK data in the HR payroll system even if it is just to capture costs.
If the P11D module is not integrated with the payroll pass the BIK data and payroll / personal data to the P11D system using an interface file.
or publish employees individual P11D’s to the self service module.
Pass the calculated benefit values to HMR&C by EDI or FBI.
Pass any Class 1A NIC values to the accounts system using an interface file.
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Lean Process Flow
Web Portal – ESS or MSS
All BIK data
HR / Payroll
System
P11D system
HMR&C
Accounting
System
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20. Improving the Collection of data
All benefits in Kind should be defined on the Payroll system as a chargeable but not payable item.
Capture benefit in kind movements at source as and when they occur.
Helps with P46(car) reporting.
The transfer of data to the P11D system every month.
The Fleet management and P11D reporting should ideally be an integrated solution.
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New Joins
Using MSS the line manager can allocate benefits to a new employee that are applicable to that role.
The new join can select / order their company car, trading up or down if there is a user chooser scheme using ESS.
They can also order using ESS a Fuel card if they wish and either opt to pay for private fuel or not.
Using ESS the new join can select the level of medical cover they require.
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Changes
New Job Role (Promotion) capture benefit changes from the line manager using MSS.
Employee can apply for beneficial loans using ESS.
Life style changes capture changes from the employee using ESS
Cash for car / Trade up / down values capture changes from the employee using ESS
Benefits must be retained during maternity leave.
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Leavers
Line mangers terminate employees using MSS.
Line Managers can de-hire company cars upon their return by the employee.
Fuel Cards and other Benefits in kind related to employment can be automatically stopped.
Benefit retained beyond notice period or during garden leave?
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24. Improving the accuracy of data
Capture all data at source avoid paper trails.
Validate all data input and ensure data that is required is defined as mandatory.
If data has to transfer from system to system ensure it happens electronically without manual intervention.
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25. Improving the Reporting Process
P11D’s to employees using a password protected PDF format.
Publish P11D’s to a web portal accessed using ESS.
File all EOY P11D data to HMR&C by EDI or Internet.
File in year Form P46(car) by EDI or internet.
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26. Accounting and Compliance
If all BIK data is captured within the payroll application the costs of providing benefits can be allocated accurately and automatically to cost centres / budgets in the payroll costing extract.
Class 1A NICs costs can be calculated by the P11D system and posted to the general ledger if cost centre is held on the P11D system.
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27. Improving Employee Retention and Reducing your NIC liability
Benefit Strategies
Improving Employee Retention and Reducing your NIC liability
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28. Salary Sacrifice Schemes
Salary is reduced on a permanent basis in exchange for benefits e.g. SMART pensions
Additional admin results in reducing salary’s.
‘Win Win’ situation, both the employee and employer save on NIC’s.
Some options involve reducing the salary but then reporting the benefit of a BIK on the P11D.
Additional admin results in reducing salary’s and reporting additional benefit on P11D.
Only the employee saves on NIC.
Process needs to be driven by self service to be effective for the business.
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Flexible benefits
Cafeteria approach, allowing employees to select from a menu of pre defined Benefits.
Rules exist to what are perceived as maximums and minimum values.
Often involves salary sacrifice options.
Usually allowed to choose once a year or upon a lifestyle changing event.
You must first understand what the employees Total remuneration package is
Total Reward Statements help with employee retention.
Process needs to be driven by self service to be cost effective for the business.
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The Future
What lies ahead?
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31. Future Considerations
Benefits in Kind via the payroll?
Taxation at source means the employee is up to date with tax
No retrospective tax codes changes and unpleasant shocks.
Taxed Award schemes and PAYE Settlement Agreements (PSA’s) to be reported on the P11D?
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32. Reducing your Carbon Footprint
Green Travel
Reducing your Carbon Footprint
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33. Green Travel Initiatives
Limit C02 emissions on Company Vehicles
Encourage car sharing
Travelling to work
Travelling on business.
Greater use of video conferencing, webinars and web based conferences such as ‘gotomeeting’
Cycle Loans
Free breakfasts!
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34. Any Questions? Paul Rains Director Transact HR Ltd
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