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P11D reminder notices

26 September 2017

As usual, during the summer, HMRC began to issue reminder notices to employers they believe failed to submit P11Ds for their employees by the 5 July deadline. Sadly, also as usual, it appears a large number of these notices were unnecessary.

In past years, employers who simply reimbursed expenses to an employee (and provided no other benefits in kind to that individual), nevertheless had to complete a form P11D unless there was a dispensation in place. This requirement ceased for 2016/17 and later years, but HMRC’s systems cannot know where reimbursed expenses were the only items reported and therefore where the need to report has ceased.

HMRC did try to limit difficulties by making a structured email available for notifying that no P11D return was needed for 2016/17. However, in some cases it seems that even where this form has been submitted, HMRC has still issued formal requests for a P11D.

Where HMRC has issued a formal request, employers need to file a return – even if this is a nil return – to avoid unnecessary penalties arising. Of course, submitting a P11D on time does not always mean that it will be captured within HMRC’s systems in time to prevent the issue of a reminder notice. As usual, there have been a number of instances of reminders for P11Ds that have already been submitted.

As PAYE increasingly moves to ‘real time’ operation, it is hoped this sort of administrative paper chase will automatically be eliminated from HMRC’s systems. Compulsory payrolling of benefits, for example, should substantially solve the problem for an employer.

HMRC have given no indication of a timescale for the issue of penalty notices. Any employer that has received a reminder notice or has yet to submit requested P11Ds (nil or otherwise) should aim to resolve the position immediately. It is far easier to prevent the issue of a penalty notice, than to appeal against one after the event.

For help and advice on P11Ds or any benefit in kind issue, please contact Karen Foster.

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