Payrolling car and fuel benefits guidance for Ciphr Payroll (Accord)

This article summarises the available methods for processing company car and fuel benefits and how Ciphr Payroll supports payrolling.

17 March 2025 | V1.0

Introduction
1. Overview of the payrolling car and fuel benefits functionality
2. Processing car/fuel benefits in payroll
3. Payrolling car and fuel benefits wage types setup

Introduction

Historically, company car and fuel benefits have been reported using P11D software, along with P46 (Car), P11D, and P11D(b) forms. These benefits are processed through the annual reporting and payment system, either via paper forms or electronic submissions.
P46 (Car) forms are used to notify HMRC when an employer provides or withdraws a company car for an employee’s personal use. P11D forms report expenses and benefits provided to employees that have not been taxed through PAYE. P11D(b) forms inform HMRC of the total Class 1A National Insurance contributions an employer must pay on all reported expenses and benefits.
Under the existing P11D system, employees pay PAYE tax on reported benefits either through an adjustment to their tax code or via direct payment to HMRC. The deadline for submitting P11D and P11D(b) forms is typically 6th July each year.
From the 2016/2017 tax year, HMRC introduced the Payrolling Benefit in Kind (BIK) system, allowing employers to process benefits and expenses directly through payroll. Once registered with HMRC, employers can report employee benefits via payroll using the existing Real-Time Information (RTI) Full Payment Submission (FPS) forms, eliminating the need to complete P11D forms at the end of the tax year. Under this system, employees pay PAYE tax on benefits in each pay period, rather than through a tax code adjustment or year-end reporting. However, employers must still submit a P11D(b) form—typically by 6th July—to report and pay Class 1A National Insurance on the benefits provided.
Currently employers can choose between two benefit processing systems: P11D reporting or payrolling benefits. Ciphr Payroll supports payrolling company car and fuel benefits.

1. Overview of the payrolling car and fuel benefits functionality

The Payrolling Car and Fuel Benefits functionality must be configured before use. In Ciphr Payroll, car details must be either manually entered or imported, as explained later in this guide. Car and Fuel Benefit wage types need to be set up in the system, and payments can be entered directly on the Fixed Wage Types tab for employees or imported using a pre-configured import.
When entering car or fuel details, the Benefit Cash Equivalent and period benefit amounts are automatically calculated by clicking Calculate Car Benefit, with the results displayed in a separate window. When importing these details, the same calculations are applied, and the values can be reviewed in the Car Details and Car/Fuel Benefit Details reports. During payroll calculation or query, these amounts are recalculated and compared with the entered or imported values. Any discrepancies will trigger a warning in the Calculation Exception Report.
Once car and fuel benefit wage types have been entered or imported, payroll should be processed as usual. In the RTI Journal, there is an option to edit car and fuel details if needed. The car and fuel period benefit amount is included in the FPS submission, like other benefits. Company car details are reported in the first FPS submission of the tax year, and in subsequent submissions, they will only be included if there are changes, following RTI rules.
HMRC’s RTI FPS specification limits the number of company cars that can be reported for a single employee to 15 per FPS return, and Ciphr Payroll enforces this limit, restricting the number of cars assigned to an employee per tax year to 15.
If you use this module, there is an additional end-of-year procedure for Payrolling Benefits that must be run alongside the standard end-of-year process. Tax year-related calculation parameters and rates are updated automatically as part of the EOY compliance update, requiring no manual user intervention.
This guide provides further details on how Ciphr Payroll supports payrolling company car and fuel benefits.

2. Processing car/fuel benefits in payroll

2.1 Populate car details

The Car Details entry and adjustment screen is available in the Ciphr Payroll Utilities module. To access it, click Car Details on the Home menu, as shown below.

This screen allows users to enter or modify company car details, ensuring accurate payroll processing for car benefits.

Use the Add New, Save, and Delete buttons to enter or adjust car details.
Each car is automatically assigned a unique Car Primary Key based on the company's sequential numbering system. This ID appears on all reports and related screens. The Calculated Price for the car includes the manufacturer price and the price of all accessories but excludes capital contribution amounts and payments made towards private use. These excluded amounts are entered separately on the employee record in the Fixed Wage Types screen (see section 2.2).
The Print button generates a Car Details Report. To search for a specific car, use the Car Search entry field and click Find, which allows searches by Make and Model or Registration Number.

2.2 Enter/adjust car benefit fixed wage types

To set up car benefits for an employee, enter Car Benefit wage type 120000 (see section 3.1) on the Fixed Wage Types page of the employee entry form, as shown below. Select code 120000 in the Wage Type Code field and choose a car from the Company Car Provided drop-down list or the Car List pop-up, which includes a car search function. Enter the Capital Contributions amount, Private Use Contribution amount, Number of Unavailable Days, and Car Cash Foregone amount if the car is provided under Optional Remuneration Arrangements. This setup ensures that the correct car benefit values are applied to the employee's payroll calculations.
If the car is provided or withdrawn during the tax year, enter the Car Available from and to dates. Clicking Calculate Car Benefits will generate the Car Cash Equivalent and Monthly/Period Benefits to be Taxed, which will be automatically populated in Entry 2 and Entry 1, respectively. If wage type switch 3-19 is not ticked, the Reference field on the fixed wage type will also be populated with the car make and model, followed by the car primary key.
The car benefit wage type is an updateable wage type, meaning that after a payroll update, the Entry 3 field, "YTD Benefit Amount Taxed," will automatically increase by the amount of car benefits taxed in the current period, which is usually the same as the amount in Entry 1, "Monthly/Period Benefits to be Taxed." During the final payroll period of the tax year or the last period of car availability, Entry 3 will be increased by the remaining amount to ensure that the total YTD taxed amount matches the Car Cash Equivalent.

When clicking Calculate Car Benefits, if the Show Calculation Details checkbox is ticked, the Car Benefits Calculation Results screen will also be displayed in a Notepad window. If the benefits have not been calculated using Calculate Car Benefits, or if the Car Cash Equivalent and Monthly/Period Benefits amounts differ from the calculated values, a warning/reminder will be printed on the Calculation Exception Report.

An employee can have up to 15 car benefit lines during a tax year, and these wage types must remain on the employee’s record until the end of the tax year. Typically, each line will correspond to a different car, and Entry 4, "Same Car Line No," must be set to 0. However, if a second Car Benefit line is required for the same car, enter 1 in Entry 4 on the second line. This may be necessary, for example, if an employee was provided with a car in April and May, then again in February and March of the following year. Alternatively, instead of adding a second line, Unavailable Days can be entered on the original line, followed by recalculating the benefits.
The Car Benefits wage type 120000 (see section 3.1) has a chained calculation time (type 2) with wage type 690000 attached. Wage type 690000, Car Benefit Deduction (see section 3.2), is a net deduction that is automatically applied during payroll calculation, as shown on the Employee Query screen below.

2.3 Enter/adjust fuel benefit fixed wage types

To set up fuel benefits on an employee record, enter the Car Fuel Benefit wage type 120100 (see section 3.3) on the Fixed Wage Types page of the Employee Entry Form as shown below. Select code 120100 in the Wage Type Code field and choose a car from the Company Car Provided drop-down list or the pop-up Car List, which includes a car search function. If the car fuel is provided under Optional Remuneration Arrangements, enter the Fuel Cash Foregone amount.
If the car fuel is provided or withdrawn during the tax year, enter the Fuel Provided from and to dates. Click Calculate Car Benefits, and the Fuel Cash Equivalent and Monthly/Period Benefits to be Taxed will be calculated, populating Entry 2 and Entry 1, respectively. If wage type switch 3-19 is not ticked, the Reference field of the fixed wage type will also be populated with the car make and model followed by the Car Primary Key.
Please note that the Car Fuel Benefit wage type 120100 always requires the Car Benefit wage type 120000 to be entered first.
The Car Fuel Benefit wage type 120100 is an updateable wage type. After the payroll update, the amount in the Entry 3 field, “YTD Benefit Amount Taxed,” will automatically increase by the amount of car fuel benefit taxed for the period, usually by the amount in Entry 1, “Monthly/Period Benefits to be Taxed.” During the last tax year period or car availability period, it will be increased by the remaining amount so that the total YTD taxed amount reaches the Fuel Cash Equivalent.

When clicking Calculate Car Benefits, if the Show Calculation Details checkbox is ticked, the Car Benefits Calculation Results screen, including Fuel Benefits, will also be displayed in a Notepad window. If the benefits were not calculated using the Calculate Car Benefits button or if the Fuel Cash Equivalent and Monthly/Period Benefits amounts differ from the calculated values, a warning/reminder will be printed on the Calculation Exception Report.

It is possible to enter up to 15 car fuel benefit lines for one employee during the tax year, and the wage types must remain on the employee’s record until the end of the tax year. Typically, different cars will be selected on each line, and the Entry 4 “Same Car Line No” field must be set to 0. If a second Car Fuel Benefit line needs to be entered for the same car, enter 1 in the field for the second car. This may be necessary, for example, if an employee was provided a car in April and May and then again in February and March of the following year.
Note that Car Fuel Benefits wage type 120100 (see section 3.3) has a chained calculation time (type 2) wage type 690100 attached. The wage type 690100 Car Fuel Benefit deduction (see section 3.4) is a net deduction that will automatically be applied during calculation, as shown on the employee query screen below.

2.4 Car/fuel benefits report

To view the details of entered fixed Car/Fuel Benefit wage types, use the CarFuelBenefitsReport, which can be accessed through the menu:
Payroll | Reports | Crystal Reports | Crystal Reports New Report | <Select and run CarFuelBenefitsReport>
A sample report is shown below.

2.5 RTI journal car/fuel details edit screen

If you need to edit car details after updating payroll but before submitting an FPS return, use the Car Details entry screen (see section 2.1) to make the necessary changes.
To modify the Car/Fuel Provided/Withdrawn field or Car/Fuel Cash Equivalent fields, navigate to:
Ciphr Payroll Utilities | RTI | Edit RTI Journal
On the screen shown below select the required employee line and click Edit or double click the line

On the RTI Journal screen, in the bottom left corner, the Car Details button is displayed, showing the number of cars currently recorded in the Car RTI Journal.

To edit the Car/Fuel Provided/Withdrawn fields or the Car/Fuel Cash Equivalent fields, click Car Details and use the below screen to modify the available car/fuel benefits fields as required.

2.6 RTI FPS return car/fuel benefit details elements/fields

When submitting an FPS return for an employee with a specific car for the first time in a tax year, the FPS XML file will include the car details within the Car XML element, as shown below. This element will not be included in subsequent FPS returns until the end of the tax year unless changes are made to the details. In such cases, the "Amendment = Yes" line will also be included within the Car element.

On each FPS submission that includes payrolling benefits, the BenefitsTaxedViaPayroll element will display the total amount of all payrolled benefits for the period, while the BenefitsTaxedViaPayrollYTD element will reflect the total amount of all payrolled benefits year-to-date (YTD).

For example:

2.7 Car/fuel benefit details import

The car details and car/fuel benefits import process allows data to be imported from a CSV file containing specific columns. This import will populate the Car Details table and automatically load the necessary car and fuel benefit wage types for employees. During the import, the system will also calculate the Car and Fuel Cash Equivalent and the Monthly/Period Benefits to be Taxed amounts.

To import Car and Fuel Benefit details, use the CarBenefitsImport import profile along with the import script CarBenefitsImport.exe. This ensures that the relevant data is correctly loaded into the system, automatically calculating Car and Fuel Equivalent values and the corresponding monthly/period tax amounts.

2.8 Processing car/fuel benefits for leavers

When an employee with a company car leaves the company, the Car Available To date on the Car Benefit fixed wage type must be updated, and benefits should be recalculated using Calculate Car Benefits. If the employee also received car fuel benefits, the Car Fuel Benefit fixed wage type must be updated accordingly.
If these updates are not made, warnings/reminders will appear on the Calculation Exception Report, as shown below.

2.9 Car/fuel benefits year end procedure

As part of the year-end process, car and fuel benefit information on the Fixed Wage Types screen must be updated for all employees who received these benefits in the previous tax year. Additionally, new cars (see section 2.1) and benefits (see sections 2.2 and 2.3) must be entered for the new tax year. The Car Details Report (2.1) and Car/Fuel Benefits Report (2.4) can assist in this process.
If your company has a large number of car and fuel benefits to process, it may be more efficient to reload all car and benefit details by deleting the existing data and reimporting it (see section 2.7). To facilitate this, additional year-end functions are available, as highlighted in the following screen in the red box.

The functions are only available for the Ciphr Payroll user ADMIN, password DeLeteReBuildPwd. Before performing any bulk deletions, it is strongly recommended to take a Ciphr Payroll company backup, and for larger companies, a full database backup in SQL Server to prevent data loss.

3. Payrolling car and fuel benefits wage types setup

3.1 Car benefit wage type

3.2 Car benefit chained deduction wage type

3.3 Car fuel benefit wage type

3.4 Car fuel benefit chained deduction wage type

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Contents

Introduction

1. Overview of the payrolling car and fuel benefits functionality