Preparing your clients for the P11D Deadline!

Preparing your clients for the P11D deadline!

As the P11D deadline is fast approaching (6th July 2023), here’s everything you need to know to help your clients submit their forms correctly and on time.

And, remember from 6 April 2023, employers (except for the digitally excluded) will be required to submit and amend forms P11D and P11D(b) online only. Paper original and amendment forms P11D and P11D(b) will be rejected.

First, a recap.

What is a P11D? 

A P11D is a form submitted by employers to notify HM Revenue and Customs (HMRC) of the taxable benefits and expenses their employees received over the last financial year. 

Also referred to as ‘benefits in kind’, these extras can cover everything from company cars and fuel to health insurance and travel.

In some cases, the tax on these benefits is covered by the employer’s payroll. But if this is not the case, the benefits are subject to Class 1A National Insurance Contributions (NIC), and so must be declared. 

Who submits a P11D? 

Employers must submit a form for each individual employee or director who has received taxable benefits in the past financial year. The totals are then summarised in a singular P11D(b) form, which outlines the organisation’s total contributions for the year. 

When is the 2023 deadline to submit P11D forms?

The deadline to submit P11D forms is 6th July 2023 for the tax year running 6th April 2022 to 5th April 2023. 

The associated Class 1A NIC must be paid by 19th July if paying via post and 22nd July if paying online.

What are the penalties if clients don’t submit on time? 

HMRC is generally accommodating of honest mistakes in the P11D submission process, but penalties are still in place for late submissions and errors deemed as deliberate.

If P11D forms are not received by 6th July 2023, employers will face an £100 charge per month (or part month) for every 50 forms submitted. 

Additional fines can then occur as a result of late or incorrect NIC payments. 

When don’t clients need to file a P11D? 

You do not need to submit a P11D for your employees if you have registered with HMRC to cover tax on their benefits through your payroll. 

Nor do you need to file a P11D for any employees who have received no taxable benefits or expenses in the past financial year. However, a P11D(b) form will still be required to ensure any wider Class 1A NIC is paid. 

Where can clients find the P11D form? 

All P11D forms and supporting information can be found on the UK Government website or via your payroll provider. 

Where do clients submit their P11D forms?

P11D and P11D(b) forms are submitted directly through the PAYE online portal or via your payroll provider’s software. 

Copies of each form must be shared with respective employees. 

What benefits and expenses do clients need to declare? 

The complete list of taxable benefits and expenses is lengthy, but generally covers anything an employee benefits from which is paid for by the employer. This includes: 

  • Company cars 
  • Living accommodation
  • Vouchers and credit cards
  • Mileage allowances
  • Health insurance
  • Relocation expenses
  • Payments made on behalf of the employee

What benefits and expenses don’t need to be included in a P11D? 

Following updates to the P11D process in 2017, certain business expenses no longer need to be declared via a P11D. These include: 

  • Business travel
  • Business entertainment 
  • Fees and subscriptions
  • Uniform and tools
  • Phone bills

Salary sacrifice agreements

In some cases, employees and employers may reach a ‘salary sacrifice’ agreement, where an employee agrees to forgo or reduce gross salary in return for benefits. Depending on the value of these benefits, they may still be subject to Class 1A NIC, in which case a P11D form is still required. 

How can you help your clients? 

As the 2023 P11D deadline approaches, you can help your clients in one of two ways. 

  • The first is by organising for their business to pay tax on all employee benefits via their payroll – removing the need for submitting P11D forms altogether. More about payrolling benefits in kind can be found on our recent webinar.
  • The second is by helping to streamline the P11D submission process for them. 

How can FreshPay help you?

FreshPay has a P11D module built in at no extra cost. It produces HMRC recognised statutory P11D, P11Db and P46 forms and submits end of year expenses reports for each employee to HMRC online, straight from the software. 

Book your free trial to find out more about FreshPay.

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