If you provide benefits to any of your employees, then you have certain obligations with regard to the recording and reporting of these benefits to the Income Tax Division.
An employer is required to:
- ensure that full and accurate records are maintained in respect of all benefits provided to employees (see Record Keeping Requirements below)
- complete a form T9 for every person who has a chargeable benefit in kind during a year
- complete a form T9 for every person who has received reimbursed expenses, where no dispensation has been agreed by the Income Tax Division
- provide one copy of this form to the employee concerned to submit with their personal income tax return
- submit a copy with the employers annual return (T37) on or before the due date of the return
- Employers are advised to retain one copy for their own records
If an employer fails to supply all forms T9, accurately and correctly completed, with their employer’s annual return, the return can be deemed to be incomplete. The employer will then be subject to a late return penalty of £250, together with a further penalty of £50 per day for each day that the fully completed return form remains outstanding.
In addition, every employer must complete and retain all records and supporting documents required to enable them to submit a true, correct and complete return form, which includes the submission of a T9 for each employee who has been in receipt of benefits from their employer.
Employers should keep records of all benefits (including both chargeable and exempt) provided to employees, even if during the aggregation process the total value of benefits provided is below the £600 charging limit.
Supporting documents includes car log books, spreadsheets, invoices, receipts, dates and durations that cars were made available and travel diaries.
These records must be retained for three years after the end of the year to which the return relates and must be produced to the Income Tax Division upon request.
Failure to retain these documents or to produce them on request will result in a penalty of £250.