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Are you prepared for the P11D deadline?

There is less than two weeks until the deadline for submission of P11D and P11D(b) forms is upon us, as it falls on the 6th July, so now is the time to prepare if you haven’t done so already.

HMRC is urging taxpayers to ensure that forms are correct on first submission as errors are not always quick and easy to rectify. If forms are incorrect or filed late, you could end paying hefty financial penalties as well as more tax than you owe.

Now that real-time tax coding is in use, in a bid to protect against errors, employees need to get into the habit of regularly checking their tax code to ensure it is correct. Taxpayers most likely to be affected by sudden changes to codes, made by HMRC, are those receiving dividends, annual bonuses or commission. These payments are classified as ‘one-off income’.

Should you be filing forms?

If you’re an employer who has paid any benefits or non-exempt expenses, such as for a company car, health insurance, travel or childcare, you must file a P11D(b) form. This should report the total value of the benefits liable to Class 1A NIC’s,  whether some or all have been taxed through your employees pay.

Class 1A NIC’s are due by 19th July if payment is sent via the post, or 22nd July if payment is made electronically.

As an employer, you should submit a P11D form on behalf of each employee who is in receipt of paid benefits or non-exempt expenses, unless you registered online before 6th April 2016 to tax them via payroll. If you did not register online, but still taxed some or all benefits through employees payroll, a P11D must still be submitted. You must ensure that benefits taxed via payroll are marked clearly on the form.

HMRC are actively trying to encourage employers to register online and payroll all paid benefits/non-exempt expenses for the tax year 2018-19, as this removes the need for P11D forms. You will, however, still need to file summary form P11D(b) before the 6th July each year. Though online registration is not currently compulsory,  HMRC must give you permission to opt out for each year that you do not wish to register.

The most common P11D mistakes to avoid making

  1. Be mindful of the start/end date you report for company cars. When an employee received or returned a car, in relation to the start of the tax year, will determine which boxes, if any, should be left blank.
  2. Ensure all sections applicable to you have been completed appropriately and that all forms are signed prior to submission.
  3. Submit only one P11D(b) form per eligible scheme.
  4. Before filling in the P11D(b) form, be sure you know what is liable to Class 1A NIC’s and what is liable to Class 1 NIC.
  5. Do not delay getting together the information that you need to fulfil your reporting obligations as compiling everything is not always straightforward.

HMRC’s Expenses and Benefits from Employment Toolkit 2016-17 Employers’ end of year forms and 2017-18 record keeping is here.

When it comes to completing P11D forms, it is always wise to seek professional advice. We have years of experience in preparing forms for submission to HMRC, including P11D’s, so we are perfectly placed to assist you. We can also advise on exemptions, reportable items and any other P11D queries you may have. 

If you have questions or concerns ahead of the deadline, please contact your usual George Hay adviser. Alternatively find out more about how we can help or call us on 01767 315010.

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