Techscheme, P11Ds and the P11D(b)

Overview

There are schemes ("Techscheme" is an example) that offer a technology 'loan' via salary sacrifice, where the employee agrees to a reduction in salary to join the scheme and often pays back over (for example) 12 months, so saving the NI for them.

This means that for an employee making a £600 sacrifice for a PC, they will save the NI contribution (about £72), but they still have to pay tax on the £600 (so about £120 at basic rate) - that is why the £600 needs to appear on the P11D. Any money you have taken for the loan (the sacrifice) should not be considered for the P11D entry, as the P11D is about tax to pay, and the money has been taken before tax.

Salary Sacrifice

For a 'simple salary sacrifice' scheme, you would enter the data into the P11D Organiser and mark the benefit as using OpRA (Optional Remuneration Arrangements), then enter the amount of the scheme as the benefit, and the amount foregone, and the system will work everything out for you. OpRA means that if the employee took a £1,000 reduction in salary, but only purchased a £600 technology device, it would be the £1,000 that is reported.

Payrolling

However, if you have taken the money through payroll over the 12 months and dealt with the tax (that would be payrolling the benefit), then you'd also mark the benefit as payrolled, and enter the amount taken.

Entering onto the P11D form

As long as you enter the scheme into a section of the P11D that attracts Class 1A, then the system will deal with adding the correct Class 1A figure to the P11D(b) total. Customers sometimes choose Section A (Assets Transferred) or Section M (Other Items) as both would treat the Class 1A correctly.

Techscheme

Techscheme is just one of a number of similar schemes available, however we have provided links to their website which explains a little from their perspective:

• What is Home & Tech? 
• How do payroll or salary sacrifice schemes work?