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.
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.