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Employee expenses and benefits: New rules for 2023/24

14th Apr 2023
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Company cars, bonuses, health insurance, childcare support – everyone loves a good work perk. However, it's important that clients know that any expenses or benefits provided to employees are subject to tax. If your client missed the deadline to sign up for payrolling of benefits for this tax year, no worries, you can still submit a P11D form on their behalf to report any employee expenses or benefits to HMRC. 

There have been some changes around P11Ds for the 2023/24 tax year – P11D and P11D(b) submissions are required to be submitted and amended online only

‘What? I wasn’t informed about this. When did this happen?’, I hear you ask. Well, that’s the thing. There was no hard announcement regarding the change, with the mention of it to the public being made through HMRC’s February Employer Bulletin. This softer approach was a first for announcements like this and may have come as a surprise for many. 

HMRC has been working towards digitalising its systems (the latest buzz around this being MTD for ITSA). The world has inevitably moved online, and government systems should adapt to reflect this. This change to P11D and P11(b) submissions could be seen as another step in the government’s roadmap towards a more digitalised society. This move towards online systems will help create more consistency and efficiency across government departments. 

While there are no direct penalties associated with this change as of yet, your client may have to pay a penalty if inaccurate tax return information is given which results in them not paying enough tax or claiming too much tax relief. 

You should make your clients aware of this change as soon as you can. You can also recommend that they subscribe to the Employer Bulletin, as there could be more important announcements like this made through the bulletin in the future. 

How do I submit my P11D and P11D(b) forms? 

If your clients' employees’ expenses and benefits were payrolled, you don’t need to submit a P11D, but you’ll still need to submit P11D(b) at the end of the tax year for any Class 1A NI your client owes. If your clients' expenses and benefits weren’t payrolled, then you have to submit a P11D for each director and employee in the company. Both forms should be submitted by the 6th July for the previous tax year. 

For clients with under 500 employees, you can submit P11Ds and P11D(b) forms through HMRC’s PAYE Online Service, but to save time (and a whole lot of hassle), we recommend using payroll software to report expenses and benefits

Submitting P11Ds and P11D(b)s in BrightPay 

Through Bright’s payroll solution, BrightPay, submitting P11D and P11D(b) forms is a simple and straightforward process. You can produce P11Ds for sending to HMRC after year end, which includes your Class 1A NICs declaration and details of the expenses and benefits provided. 

When you’re in the software, select 'RTI' on the menu bar > New > Expenses and Benefits (EXB). Once you’re happy with the information, select 'Create Submission > Send now. The return has then been submitted to HMRC. Simples. 

Here at Bright, we work hard to provide you with the latest news, updates and changes to payroll legislation. To see how our payroll software can help streamline your workflow, book a quick demo with one of our team to see the software in action. 

Book a demo 

 

Eleanor Vaughey

 

 

 

 

 

 

Written by Eleanor Vaughey | Bright

BrightPay by Bright

 

 

 

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