COMPLIANCE
Table 2: Year end reporting considerations for employers with both formal and informal reward offerings
Payrolling benefits*
Reporting deadline
Subject to registering with HMRC, employers can elect to process certain taxable non-cash benefits via the payroll. A proportion of the benefit should be processed via the payroll, based on the number of pay cycles (e.g. monthly / weekly) in the tax year. Employees will then be subject to income tax on the amount reported within the tax year they receive the benefit.
Registration – prior to the start of the tax year (5 April)
Reporting – on a per pay cycle period
Please note, employers must currently continue to file a form P11D(b) to account for the class 1A NIC arising on the benefit. Please see below for further details.
Form P11D / P11D(b)
Reporting deadline
As an alternative to payrolling benefits, employers can instead report all non-cash benefits provided to employees following the end of the tax year. Under this approach, the employer completes a form P11D for each employee who received a benefit. Employers must then reconcile the total amounts paid on form P11D(b) and calculate the class 1A NICs due. When preparing these forms, employers must ensure they: l gather all the data from the various external vendors l complete the correct calculation of the reportable value – something which can vary depending on the type of benefit l identify available exemptions / reliefs to reduce the reportable value l report the correct figures on the forms P11D and P11D(b). This is of particular importance for those employers who report some benefits via the payroll. Provide the P11D to each employee.
6 July following the end of the tax year
PAYE settlement agreement (PSA)
Reporting deadline
In some cases, employers may elect to settle the income tax and NIC arising on taxable non-cash benefits on the behalf of the employees. Such cases often include staff entertaining and staff gifts.
There’s no statutory deadline for the calculation Payment deadline – 22 October following the end of the tax year (19 October if by post)
In these cases, employers can apply for a PSA with HMRC which will reference certain types of benefits. HMRC will only accept benefits on a PSA which are considered minor, irregular or impracticable to be otherwise reported.
Reporting costs on a PSA is expensive for employers as it requires both income tax and NICs to be settled on a grossed-up basis. Employers must also ensure they: l gather all the data required for review and ensure nothing is omitted l review the large swathes of data in a consistent and timely manner l ensure those with the relevant expertise are involved in the analysis process l maximise the application of any exemptions, with due consideration for the conditions that apply to each exemption.
Employment-related securities (ERS)
Reporting deadline
Employers that operate a share plan or, where there has been any type of transaction in shares or other securities, including the grant of options and restricted stock units, involving UK employees or directors during the tax year, will be required to submit ERS return(s) to HMRC. In preparing the returns, employers must do the following: l ensure the correct template has been used for the type of transaction that occurred in the tax year l avoid data formatting errors which can result in HMRC’s gateway rejecting the returns l consider the impact of foreign exchange rates where calculating the reportable amount l ascertain whether any overseas workdays during the tax year impact the reportable amount.
6 July following the end of the tax year
*Please note, from April 2026, HMRC has announced the abolition of form P11D reporting. From this date forward, there will be a mandatory requirement to report all non-cash taxable benefits via the payroll. Further guidance is due from HMRC on the practicalities of this change in reporting.
Additional reporting considerations
Reporting requirement
Reporting deadline
Gender pay gap reporting Public and private sector employers with an employee headcount of 250 or more are required to publicly report gender pay information every year. Failure to provide this information can lead to public naming and shaming causing significant reputational risk.
30 March for most public authority employers
4 April for private, voluntary and all other public authority employers
Challenges with the reporting centre around: l understanding which data needs to be included in a report l how, where and when to report the information l preparation of an effective ‘narrative’ to explain any gap(s) which are identified.
Form P60 Employers must provide employees with a summary of the total amount of income tax withheld on their earnings from employment, during the tax year.
31 May following the end of the tax year
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| Professional in Payroll, Pensions and Reward |
Issue 101 | June 2024
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