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Confusion reigns over P11D reminders

30th Jun 2017
Tax Writer Taxwriter Ltd
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Many employers won’t have expenses to report on forms P11D for 2016/17, but HMRC is sending out P11D reminder letters. These should not be ignored.

Change for expenses

The system of employer dispensations from reporting reimburse expenses on forms P11D was abolished on 6 April 2016, but P11Ds still exist as Kate Upcraft explained.

For 2016/17 the employer should not use the form P11D to report employee expenses which are now wholly exempt from tax, i.e. those expenses which are “wholly, exclusively and necessarily” incurred in the performance of the employment. This would include reimbursed costs to employees covering business travel, phone bills and uniforms. There is a full list of what employee expenses are now exempt on gov.uk.

Class 1A NIC 

Where there is nothing to report on the P11D it would logically follow that a P11D and the accompanying P11D(b) (class 1A NIC declaration) doesn’t have to be submitted. However, that is not the case. Where HMRC has sent the employer a notice to file forms P11D for 2016/17, because those forms have been submitted in the past, HMRC will expect something to be submitted.  

What to do

Where a notice to file P11Ds, or a P11D(b) reminder letter, has been received, the employer, or the tax agent, should submit an online no return of class 1A NIC declaration. This advice was included in the Employer Bulletin issue 66, on page 2.

Confusing guidance

HMRC’s letter reminding employers to pay class 1A NIC contains some very confusing text: “If you have no class 1A NIC to pay, fill in form P11D(b) or the appropriate box on the Full Payment Submission or Employer Payment submission,” it said. This is an obsolete reference to the now defunct fields on the final EPS/FPS which were removed from the start of the 2015/16 tax year as there are no longer any such fields on either submission.

HMRC say they will be reviewing and updating the reminder letter. But that review won’t be done before the deadline for paying class 1A NIC and submitting the form P11D(b), which is 6 July 2017.

Replies (7)

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By J_asonR
30th Jun 2017 16:20

A few of our clients have received P11d(b) reminder letters from HMRC. Upon reviewing their situation they did not require a P11d and therefore HMRC were informed by us submitting an online no return of class 1A NIC declaration.

Since then, for all those clients, we've received emails from the PAYE notifications email address stating that there was actually no need for us to submit this email as "Your client's record already shows that they do not need to file a P11d(b)."

Makes you wonder why they request it, when they don't require it!

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By Tomazaan
03rd Jul 2017 12:03

Thank you for this.
I submitted my company's nil P11d(b) on 9 April 2017 via the internet. I received a reminder dated 11 June 2017 and was told this morning that HMRC received the nil P11d(b) on 29 June 2017. Not sure where it has been in the past two and a half months (a world tour courtesy of the internet??).
I could not tell from the company's online account whether or not the P11d(b) had been received and it would be helpful if this was possible.

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By Springfield
03rd Jul 2017 12:07

Isn't the deadline for paying Class 1A NI July 19th rather than July 6th?

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Replying to Springfield:
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By JasonRodwell
03rd Jul 2017 16:40

I believe that the deadline for submitting the P11D(b) form is July 6th, but then you have until July 19th to make the payment of Class 1A NIC, or July 22nd if making payment online.

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By cfield
03rd Jul 2017 20:30

For owner-managed companies where the director draws cash in advance of salary/dividends, it is worth noting that if the balance is more than £10k overdrawn at any time during the tax year, you have to work out a benefit at the then Official Rate of 3%.

Under normal averaging there may still be no taxable benefit as it is based on the number of complete months the loan existed, but you still need to do a P11D showing balances at the start/end of the tax year (or the dates the loan started/ended if different) and the maximum loan during the year.

Of course, this means doing a chronological schedule of the loan account and working out the interest (preferably on a daily basis), so there could be a fair bit of work to do.

That's only necessary if they went over the £10k of course. You also have to factor in spouse loan accounts, even if they are directors in their own right.

If a benefit does arise, the director gets until 19 July for it to be "made good" by actual payment of the interest (you can't just do it by book entry) but even then you still have to do a P11D showing a nil benefit.

You can still submit P11Ds on HMRC Online if you hunt around a bit, but make sure you don't inadvertently send a nil P11D(b) first. If you do, you won't be able to file the P11D and the only option will be to send them a paper one with a covering letter.

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By buttercup books
04th Jul 2017 15:27

Oh pooh - Reading this I realize I've filed a P11d & P11db for benefits and forgotten the loan interest

How do you amend a P11D once it's submitted -( via HMRC's software )- any one know?

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Replying to buttercup books:
By SteveHa
04th Jul 2017 16:20

The old fashioned way:

Paper forms
Envelope
Stamp

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