Accountants fear that their clients will soon receive erroneous penalties for late submission of P11D forms. In most cases, those forms were submitted on time.
HMRC’s computers have been spewing out hundreds of reminders for 2016/17 P11D forms. In many cases, a P11D was not technically required, as from 6 April 2016 most reimbursed employee expenses are wholly exempt from tax and should not be reported on a form P11D.
However, as I explained on 30 June, where a notice to file a P11D for 2016/17 was issued by HMRC, a nil return or an online declaration that no class 1A NIC was due, should be filed with HMRC to avoid automatic penalties from arising.
The penalty for an inaccurate or late form P11D can be up to £3,000 per form (see HMRC compliance manual COG914080), so the maximum penalty for each employer could be significant.
The Employer Bulletin issue 66 advised employers and tax agents to use the online structured email to inform HMRC that no P11D return was needed for 2016/17. However, even where this online declaration was made correctly, HMRC has sent out letters asking for submission of the P11D form.
AccountingWEB member kerscliff has received dozens of reminders to submit P11Ds, although he did submit nil P11Ds on time. HMRC advised kerscliff by phone that the paper P11D forms he submitted probably haven’t been processed yet, which begs the question: why are they chasing for submission of forms which are waiting to be processed?
Is this another indication of systems breaking down within HMRC?
About Rebecca Cave
Consulting tax editor for Accountingweb.co.uk. I also co-author several annual tax books for Bloomsbury Professional and write newsletters for other publishers.