8th May 2017

Completed P11D forms, which report details of benefits-in-kind and some expenses provided to employees and directors for the year 2016/17, are due for submission to HMRC by 6th July 2017.

Employees pay tax on benefits provided as shown on the P11D, generally via a PAYE coding notice adjustment or through the Self-Assessment system. Significant changes were introduced to the rules for reporting expenses from 6th April 2016.

Some employers payrolled the benefits and in this case the benefits do not need to be reported on forms P11D but employers should communicate to employees of the amount of benefits payrolled.

Regardless of whether the benefits are being reported via P11D or payrolled, the employer should pay Class 1A National Insurance Contributions at 13.8% on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form. The deadline for payment of the Class 1A NIC is 19th July 2017 (or 22nd for cleared electronic payment). As 22nd July is a Saturday it may be appropriate to ensure cleared payment is made by Friday 21st July unless you can arrange for faster payment.

Lee Muter, Employment taxes partner at UNW said: “Gathering the necessary information needed to complete P11D forms can take some time, so it is important that employers do not leave the process to the last minute.

“HM Revenue and Customs has announced that the extra annual amount taken in employment tax (including from errors on P11Ds) is more than £700m. A P11D form looks fairly simple, but the financial penalties for getting them wrong are significant and penal. As the tax and NIC legislation has changed significantly over the last two years I would recommend that employers take particular care in completing forms this year and take advice where necessary.”

If you would like any help with the completion of the forms or the calculation of the associated Class 1A NIC please contact:

Lee Muter
Employment Tax and Payroll Partner, UNW LLP

T +44 (0)191 243 6000
E leemuter@unw.co.uk

 

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