Changes to P11D & P11D(b) Reporting Process Part 1

Following the recent update to the HMRC guidance on informal payrolling benefits, it appears that some employers are unclear of the intention of this, and it has led to many believing that Payrolling benefits will become mandatory.

For the avoidance of doubt the information from HMRC seeks to make clear that where employers currently payroll benefits outside of the formal registration requirements and enter ‘Payrolled’ on the P11D forms, they must seek to formally register to payroll benefits by 5 April 2023 and therefore commence payrolling from 6 April 2023.

This is to ensure that when reporting benefits provided in the 2023/24 tax year which will be reported on 6 July 2024, employers have officially agreed with HMRC as part of the registration process which benefits/employees will receive payrolled benefits and expenses.

Where benefits have been informally payrolled for the 2022/23 tax year employers can still apply the reference ‘Payrolled’ when reporting the benefits on the P11D form.

Employers should seek to formalise arrangements going forward for the 2023/24 tax year by the deadline, and those employers that continue to payroll benefits are encouraged to register to do so by 5 April 2023, to apply payrolling from 6 April 2023.

If not payrolling benefits, employers should continue to complete forms P11D. However, from 6 April 2023 all P11D and P11D(b) data must be reported online without exception, and this will include benefits provided in the 2022/23 tax year and reportable by 6 July 2023 as it’s past the date.

HMRC make it clear that they will no longer accept paper P11D and P11D(b) forms and this includes lists. This also encompasses Class 1A payments due on payrolled benefits.

If you make a mistake and need to submit an amendment

Previously, if amending a P11D, employers were required to make a paper submission, but from 6 April 2023, amendments must also be sent electronically. HMRC will be launching a new online submission link to enable the submission of amended P11D and P11D(b) data which will apply to the 2022/23 tax year.

This has been an interesting update which was first seen in the latest Employer Bulletin, and gives employers comparatively little time to change if paper has been the normal solution used, however, given the continual transition from paper is not unexpected.

As earlier stated, it does not mean employers must move to payrolling of benefits as the P11D process at least for the short-term is still an acceptable process to follow.