With effect 6 April 2023, employers are required to submit their annual returns of expenses and benefits (forms P11D) and the return of Class 1A NIC (form P11D(b)) online.
Many employers already submit these returns online or use the services of a third party to do so, and for such employers there will be no change. However, employers who have not previously submitted returns electronically should take steps to prepare well ahead of the 6 July filing deadline.
Below are some questions and answers regarding the new requirements:
Do all employers need to comply?
Unless an employer has an agreement with HMRC that they are digitally exempt, these rules will apply. Digital exemption can be sought if it’s not practical to use software to keep and submit digital records due, for example, to disability, age or being a practising member of a religious society (or order) whose beliefs are incompatible with using electronic communications or keeping electronic records.
Will there be any issues if I submit paper forms for the 2022/23 tax year?
HMRC has said that it will not accept any paper returns and that any that are received will be sent back to the employer with a request to submit them online.
What if I need to send a corrected P11D?
From 6 April 2023, if you make a mistake and need to submit an amended P11D form or P11D(b), HMRC will no longer accept these in paper format. Any amendments to substitute documents in the form of lists will also be rejected.
What if I payroll benefits?
There is an increase in the number of employers who are now payrolling benefits under an arrangement agreed with HMRC rather than report the details on the P11D form. For those employers there may still be a liability to Class 1A National Insurance contributions on the benefits so they will still need to submit a P11D(b) to report Class 1A National Insurance contributions. Employers will also need to submit an online P11D form to show any benefits paid that were not payrolled.
Do you need help?
The identification of which benefits to include on a P11D form can be quite complicated, especially as the rules for some have changed radically over the last few years. UNW’s employment tax team completes P11D forms for a number of clients using our online software, as well as providing broader employment tax advice, including how and when to use PAYE Settlement agreements (PSAs) as part of an employer’s overall employment tax reporting.