Payrolling benefits

[WasherWoman25]

We’ve moved this month from needing the annual PD11 to Payrolled benefits.

As expected the taxable benefits now show on payslip for April as income.

Can anyone advise if my tax code should still be reduced as well or should I have gone back to the full tax free allowance?

My salary is down a couple of hundred pounds and trying to work out why before I approach payroll and look daft if it’s right (please be kind!).

As I understand it, your tax code won’t change yet as this takes into account the 2023/24 P11d information. I think this year might effectively be doubling up on the impact while the change happens. Hopefully someone with better knowledge will come along to explain

Payroll can't do anything about your tax code, you'd need HMRC to do that.

Whether it will change yet depends on whether they are collecting any tax in arrears or not - you'd code explanation should tell you that.

Yes I understand that, but assuming no tax owed, should my tax code still be reduced by the annual medical insurance amount?

No, if your reduced coding is collecting tax on benefits for the year in question rather than prior years, then once those benefits are payrolled you no longer need the reduction in your tax code.
But, I'd they have only just started doing it then April will be the first month reported to HMRC and they won't have processed this through a code change yet. And given the speed at which HMRC works it could take some time.
Check to see if you can update your expected benefits on your online HMRC account, and if not give them a call.

P11D always seems to be behind reality. I used to have a company car and it could months if not over a year before the tax due caught up and you were always behind with what you owed so it could well be that for part of this financial year, you're effectively being double taxed because you're still paying what you owe and you also paying from now on in real time.

When you started the medical insurance benefit, was there a period when you had it but had not started paying the tax due? If so, they're now redressing this, which unfortunately means you are effectively paying double now.

Thanks everyone. I’m fairly sure I’m up to date on the tax. I got a notification from HMRC last month that my tax code was changing. When I looked online it was because my taxable benefits had been removed.
I will double check online what my code should be and raise it with PayRoll if it doesn’t match.

Just to let you know that HMRC are very behind on sending out updated tax codes for those that have moved to payrolling benefits this year - i am waiting for quite a few

Thanks, I have checked online on my tax account and my code has been updated on there. Would my employer have been told at the same time do you know?

edit to add - just checked the date of my email and it was 25/02/25 I received the notification.

Presumably you have an Apr 25 payslip for 25/26 - does it not have your current 25/26 PAYE coding as per your HMRC account?
Your employer should have received it electronically when it was issued.
If they are using the wrong code contact your payroll and ask them to check.

Yes that’s what it looks like.

My tax code is still my old one.

I had approx £4k of benefits in kind last year so was reduced to a 784L this year it says 1238L (I owe about £80 tax so slightly reduced from standard) and my benefits are now listed on my payslip as taxable pay.

If that M1 payslip is April 25 M1 (which I'm assuming it is), then it is your payroll using the wrong code.
They need to check their employer portal which should have your new code (and I'd be a bit cross they haven’t used it given it was issued in February).
When they run the May payroll, with the correct code, the extra tax paid in April should reverse.

If payroll say they haven't had the new code through you'll have to contact HMRC and ask them to reissue, payroll can't take it from you.

Although I did think this was all automatic with RTI now.

Thank you! Yes M1 is April 25, M12 was March (i wanted to show that it hadn’t changed).

I will drop them an email but wanted to make sure I was correct before doing so as they can be quite difficult.

The benefits are no longer showing on my tax account online so they must have reported the change when they announced they were moving to monthly payrolling.

Good luck!

@Bjorkdidit they're always behind because p11d filing deadline is July but the income tax year ends in April.