Kate Upcraft bids goodbye to section N of the P11D form, but is concerned that HMRC has communicated this change too late to employers.
On page 11 of the October 2016 edition of the employer bulletin, HMRC belatedly announced a change to the reporting of taxable expenses received by employees, which has been backdated to April 2016.
Dispensations to remove the obligation to report qualifying (tax-deductible) business expenses on P11Ds were abolished from 6 April 2016. Instead, employers have to take a view as to whether any expense (or benefit in kind) meets the ‘wholly, necessarily and exclusively’ test and therefore falls to be exempt from reporting on the P11D form.
The removal of dispensations for qualifying business expenses was not expected to affect the reporting of fully taxable or mixed-use expenses on the P11D, which are reported in Section N of the P11D and are subject to Class 1 NICs.
N section has gone
During an HMRC webinar early in this tax year, the presenter indicated that section N of the P11D would be removed for 2016/17. This was confirmed in the October 2016 edition of the employer bulletin. Section N of the P11D form allowed for the reporting of... register with AccountingWEB for free to read the rest of this article.
About Kate Upcraft
Kate is a technical writer, editor and lecturer on all aspects of employing people - primarily payroll and HR matters.