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OTS proposes new benefits submission scheme for contractors

Benefits submission for contractors and other self-employed Brits might get a bit less complicated if the Office of Tax Simplification has its way.

The OTS has a new proposal in its latest employee benefit and expense review that could cut down on the amount of paperwork that employers (and the self-employed) have to submit to Her Majesty’s Revenue & Customs. While contractors currently have to submit a P11D to HMRC, the new proposal from the OTS could pave the way for firms to process staff benefits through payroll in appropriate situations. 

That’s a gross oversimplification of course, but you’ll have to bear with me as I work my way through the particulars of this proposal. When youi get down to the nitty gritty of course there’s plenty of things to pick over, like the fact that the OTS says that some benefits can be entered via payroll whilst others can still be submitted through a P11D, especially because some benefits are truly difficult to payroll. Whether or not there will be a specific list of which benefits will be funneled where is unknown, but the OTS is adamant that it should be up to the choice of the employer.

While it’s definitely a good idea to make it easier for contractors to submit benefits to the taxman, it seems like not much benefit if there will still be benefits that need to be submitted the old-fashioned way. Isn’t this simply creating more red tape instead of streamlining things. If it was me I would prefer to simply do it 100 per cent one way or the other and not have to split between both the old and new methods.

Still it’s just a proposal, and I’m sure the OTS will tweak and modify its plans until it lands on something that will be implemented. Hopefully it will be much more streamlined in practice as well as in theory. If not, it seems to me like it’s just an exercise in futility and more than a bit of a waste of time, money and effort. I’ll just keep my fingers crossed that this works itself out – though at the same time, I wouldn’t recommend anyone holding their breath in anticipation, either.

 

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