Preparing for P11D 6 July deadline

With the 6 July deadline approaching for submitting P11D forms to HMRC,  Katerina Travell, Manager in Price Bailey’s Tax Team, provides a reminder of the intricacies and requirements of P11D forms which is crucial for employers to ensure preparedness, accuracy and minimise the chances of any complications.

As an employer you are responsible for recording all benefits or expenses paid to employees that can’t be processed through the payroll. This guide serves as a helpful reminder of the P11D and P11D(b) reporting requirements for expenses and benefits to employees to minimise unnecessary errors or misinformation as to what needs to be reported, and by when.

What is a P11D?

P11D forms are used by employers to inform HMRC of any Benefits in Kind (BiK) they provide to employees (including director’s) which have not been included in the payroll, the P11D form functions as a reporting mechanism for BiK received by employees and directors and the information provided enables HMRC to determine if tax is payable on those benefits. Based on current guidance, P11Ds will be required up until 2025/26, and as of March 2023 all submissions must be made online.

Typical examples of items that should be included on P11D forms, but not limited to, include company cars, gym memberships or private medical cover. Certain expenses may be exempt from reporting, provided specific requirements are met, and should be clarified with HMRC’s useful resource on expenses and benefits.

And what about P11D(b) reporting?

The P11D(b) form reports the employer’s Class 1A National Insurance Contributions due on all taxable benefits and expenses. Think of it as essentially a tax summary of all the BiKs that were provided by the employer during the tax year.

Submitting a P11D and P11D(b) forms

P11Ds can be complicated and, depending on the number of employees you have, time-consuming. You may therefore want to think about asking your accountant to prepare the P11Ds for you.

A P11D and P11D(b) can be submitted through PAYE online for employers or through HMRC -recognised commercial payroll software. If you have less than 500 employees, you can choose either method, businesses with more than 500 employees must use payroll software.

When do I need to submit P11D forms?

At the end of each tax year P11D’s must be completed. HMRC’s PAYE Online Service is used to report on forms P11D and P11D(b); declarations must be filed by 6 July following the end of the tax year on 5 April.

For example, if the benefits were provided in the 2022/23 tax year, then the P11Ds must have been submitted by the 6th of July 2023 to avoid late filing penalties.

Payment of Class 1A NIC are required by 22 July, if paying electronically.

P11D penalties from HMRC

As with most HMRC deadlines, penalties occur for misinforming or failing to inform. If you file P11D forms late, HMRC give two weeks to correct the error. Should you then miss the extension, fines of £100 per month for every 50 employees employed will occur with the maximum penalty per form being £3000.

Errors are the easier penalty to take, if you notify HMRC promptly of the mistake. Late filings have much more severe penalties and when faced with large numbers of employees and over long periods of time fines can accumulate quickly. Many errors come down to the details, or should I say changes in the details which people fail to notice, such as the changes to BiK rate for electric cars increasing from 1% to 2% from 6th April 2022.’

Katerina Travell, Manager

If you have made an error a P11D or P11D(b) correction form can be completed. If HMRC believes that incorrect information was given deliberately or carelessly you may incur a penalty charge. It is easy to make mistakes when recording large volumes of data, in the first instance upon noticing any error, you should notify HMRC to mitigate penalties or interest charges

Do I need to share a copy of employees’ P11D with them?

All employers must legally share with employees the details they share with HMRC regarding BiK. This must done on or before 6 July following the end of the tax year. Copies of this information can also be directly requested from HMRC and may be used by some employees to complete self-assessment tax returns, review their tax deductions, and prepare claims for tax relief.

Should any mistakes on the initial P11D form be rectified, employees must be provided with an updated copy of their P11D form.

Changes to expect from April 2026

From April 2026, it will be mandatory to report employment benefits and pay Class 1A National Insurance Contributions (NIC) through payroll software. These changes from HMRC will remove the need for employers to submit P11D forms to HMRC and pay Class 1A NIC separately. Payrolling of benefits will be mandatory from April 2026. For employers who are not already using the service, voluntary payrolling in advance of this date might be sensible.

‘Removing P11D’s should alleviate some of the administrative burden associated with the filing currently. However, new complications could arise with transitioning into a new system. People have started to payroll benefits over the past few years, which takes off the burden in some respect because you don’t have to do as many forms, but only when you come to the end of the year do the problems start to emerge where you work out, we had a bit of an error in that month.’

Katerina Travell, Manager

Top Tips for preparing for the deadline:

  • Check how you pay for a benefit, the way you are paying may determine a completely different tax treatment.
  • Stay on top of P11D legislation changes, quite simply changes occur frequently and it is important to either seek advice, or ensure you are aware of any updates from HMRC.
  • Prepare ahead of the deadline, understandably many people scramble to complete P11Ds in the first week of July just in time for the 6 July deadline. Mistakes are more likely to happen when under time pressure and leaves little time for dealing with complications.

Given the volume of reporting required for some businesses due to employee numbers, preparing for P11D submission can be a large administrative task. Seeking assistance from an accountant is advised to minimise the workload and potential inaccuracies that can occur in reporting.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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