P11D – to submit or not to submit

30th June 2017 Tax Ian Orgill

Whilst many employers won’t actually have any expense to report on their P11D forms for 2016/2017, HMRC still seem to be sending out reminder letters.

Last April the rules regarding reporting employer dispensations changed. This change meant that for 2016/2017, the employer no longer needed to use P11Ds to submit employee expenses which were exempt from tax. (Or in HMRC’s wording ‘wholly, exclusively and necessarily’ incurred in the performance of the employment.”) Such items include business travel, uniforms and phone bills. HMRC list all items on the gov.uk website.

Common sense would suggest that if there was nothing to report on the P11D, one wouldn’t need to be submitted, however this isn’t the case. As these forms have previously been submitted, HMRC will still expect them to be, despite not actually needing to do. Confusing, we know.

What should you do?

HMRC suggest that If you’ve received the notice to complete and file a P11D (or received the reminder letter), the employer (or you accountant) should complete and submit a “no return of class 1a NIC declaration”.

And in typical HMRC style – don’t be surprised if you receive an email from HMRC’s PAYE notifications advising you that there was no need to file a P11D/ P11D(b) – just to add to the frustration!

This is HMRC’s advice from a recent guidance update, however they didn’t react in time for the P11D reminders, therefore you may receive conflicting pieces of advice.

Undoubtedly, HMRC will review the guidance for next year, as it’s a widespread issue affecting many businesses (and leaving accountants explaining the work around to clients).

Don’t forget the deadline for filing P11Ds is 6 July, with payment by the 19 July (or 22 July if paying electronically).

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