Payroll insight
Beverley Smith ACIPP, CIPP trainer, provides timely information and guidance Reporting expenses and benefits in kind
A belated happy new tax year! However, we do need to remember that the last tax year is not wrapped up until such time that the annual P11D and P11D(b) process has been completed. So, as a refresher, where an employer provides certain expenses and benefits to employees and directors (in addition to the employees’ normal salary), tax legislation dictates that such items are liable to income tax and National Insurance contributions (NICs). So, therefore, for those employees still employed at the end of the tax year, details of the benefits/expenses provided must be reported to HM Revenue and Customs (HMRC) in a P11D return, by 6 July following the end of the tax year. Sounds simple enough, but year after year things can, and most certainly do, go wrong, such as: ● fuel benefit omitted from the return ● incorrect dates relating to the availability of the vehicle ● the unnecessary completion of the ‘from’ and ‘to’ dates showing the whole tax year, e.g. ‘06/04/2017’ to ‘05/04/2018’. The rule is, if the vehicle was available in the previous tax year, the ‘from’ box should not be completed, and if the vehicle will be available in the next tax year the ‘to’ box should not be completed ● including incorrect CO2 emissions ● not including accessories ● incorrectly recording capital contributions and private use payments. A
If you do continue to submit on paper, or you need to submit an amended return, you will need to send them to the following address: P11D Support Team, BP1102, HM Revenue and Customs, Department 1250, Newcastle-upon-Tyne, NE98 1ZZ. Key changes There have been several changes that have taken effect since the P11D submission for 2016–17, which you may not be fully aware of. Apart from the normal tax year/date changes, several field labels included in the P11D return have been amended to include ‘or Amount Forgone’ and ‘or Relevant Amount’. These changes have been bought about due to the optional remuneration arrangements changes that came in from April 2017. What does this mean for the P11D process? Firstly, employers must ensure that the correct taxable value is reported for those benefits caught by the new rules. To help employers determine the correct value, HMRC have updated the following worksheets: ● Worksheet 1 – living accommodation (https://bit.ly/2JRAisP) ● Worksheet 2 – car and car fuel benefit (https://bit.ly/2FGfKRK) ● Worksheet 2b – car and fuel benefit provided through an optional remuneration arrangement (https://bit. ly/2wdzAUM). There have also been changes regarding the reporting of passenger
capital contribution is a one-off payment towards buying the car, and private use payments are monthly or yearly payments for the use of the car. Both must be made out of net pay. ...HMRC’s online systems check for
and inform you about common errors...
Reporting errors will mean amended P11D returns may be necessary; and incorrect information being reported could also mean penalties are due. There are a great many benefits which employers can and do chose to provide to their employees. Some of the more common ones being medical/ dental benefit, company cars, loans, accommodation and relocation benefits. information can be submitted to HMRC. Returns can be filed in paper format, but you might want to think about moving to online filing as HMRC’s online systems check for and inform you about common errors that may be encountered. There is then less risk that the submission will be rejected, which otherwise may result in your submission missing the filing deadline with penalties possibly being levied. Media for P11D returns There are various ways the P11D
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| Professional in Payroll, Pensions and Reward |
Issue 41 | June 2018
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