Question:

An employee was provided with a benefit in kind in 2016 but this this was not relayed to the payroll department in 2016. Can I process this in the 2017 payroll to collect the liabilities which are due?

Answer: 

No. As the benefit was provided in tax year 2016, it should be recorded in 2016.

The value of the BIK and the appropriate PAYE, PRSI and USC liabilities should be calculated. If the employer's P35 for 2016 has not been filed yet, the employer should correct his records to ensure that the P35 is accurate when it is filed (on or before 23rd February 2017, where it is paid and filed on ROS). If the employer has already filed his P35 for 2016, the employer can submit an amended P35 to record the amended figures.

The liabilities arising on the BIK should be paid over to Revenue and this amount should be recovered from the employee before 31st March 2017. Any amount not recovered from the employee by 31st March 2017 is a further BIK which is liable to PAYE, PRSI and USC.