Most employers report expenses and benefits online because it’s quicker, easier and cheaper. It’s also more secure. It saves paper and you’ll get confirmation that HMRC have received your submission.
If you are still filing on paper or sending HMRC a list, this year may be a good time to consider swapping to online filing. HMRC’s online systems check for, and tell you about, common errors so there’s less risk a return will be rejected. A reject of a submission may mean missing a filing deadline and a penalty.
HMRC’s online service will not pre-populate the total amount liable to Class 1A National Insurance contributions from the P11D figures, so still a bit of work to do.
P11D & P11D(b)
The deadline for reporting Expenses and Benefits in Kind for tax year ending 5 April 2019 is 6 July 2019, by the completion of a form P11D and P11D(b).
A P11D(b) tells HMRC how much employers Class 1A NICs you need to pay on all the expenses and benefits you’ve provided to your employees – either through your payroll as well as any you have reported to HMRC on a P11D.
You’ll need to submit a P11D(b) form if:
- You’ve submitted any P11D forms;
- You’ve paid any employees’ expenses or benefits through your payroll;
- HMRC has asked you to file a P11D(b) – either by sending you a P11D(b) form or an email notification to file a P11D(b).
If HMRC has asked you to submit a P11D(b) and you have nothing to declare, you have to tell HMRC you don’t owe any employers Class 1A NICs by completing the declaration “No return of Class 1A National Insurance contributions”. Only use this declaration if HMRC have asked you to submit a P11D(b) and you have nothing to declare.
HMRC are very particular about the format of your P11D if you submit as a list. It must use the following format:
- Use Arial font size 11 or larger (when printed)
- Sort it by employee, not benefit type
- Include your employer reference
- Include the employee’s correct name and National Insurance Number (NINO). If you can’t find the NINO you must give their correct date of birth and gender
- Put each employee’s expenses and benefits on the same line – HMRC can’t accept separate lists for each benefit for example
- Include the letter codes from the P11D next to each benefit – these are shown in the dark blue boxes to the left of each section on the P11D
If you payroll benefits you may still have a Class 1A NIC liability and you’ll still need to send a P11D(b) to tell HMRC how much employer Class 1A NICs you owe.
You’ll also need to send a P11D to show any benefits you paid that you didn’t payroll. (Employer provided living accommodation & interest free/low interest (beneficial) loans, commonly referred to as director loans cannot be payrolled and always require a P11D).
For those benefits payrolled, instead of giving your employees a P11D, you need to give them a letter explaining what you’ve payrolled. More information can be found here.
If you missed the deadline to register to payroll benefits, you must register with HMRC for the 2020/21 tax year on or before April 2020. If you are still informally payrolling, you must complete form P11D for these benefits, marking each form ‘PAYROLLED’.
Send one P11D(b) for each PAYE reference. If you’ve batched your P11Ds (for example into different classes of employee or different areas of your business) you must still total the benefits from each batch and show the overall total on one P11D(b).
If you send a paper P11D(b) you must sign it in ink. HMRC won’t accept a copy, fax, photocopy or a stamped signature. If you send a paper form and it hasn’t been signed in ink, HMRC send it back and treat it as not having been received.
Amending a P11D or P11D(b)
If you make a mistake, send a new form. Fill in all the boxes, not just the ones you want to correct. For example, if the employee had £2,100 car benefit and £500 medical benefit but you previously only reported the car benefit and £300 medical benefit by mistake, the corrected form needs to show the car benefit as well.
Paying your Class 1A NICs
There’s a special reference you need to use to make your Class 1A payment. This is your normal Accounts Office reference plus the numerals 1913 at the end. Don’t leave a space between any of the numbers. This is an example of the correct format, 123PA001234561913, but please use your own reference number.
HMRC have a free toolkit to help reduce errors, which can be found here.