Payrolling of benefits and P11D reporting

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Employers who have local agreement to payroll benefits and expenses must still submit completed P11Ds or equivalent lists.

Despite HMRC consideration of formal procedures for replacing P11D reporting with payrolling of benefits and expenses, existing legislation requires employers to submit P11Ds or equivalent lists even if they have local agreements to process the tax liabilities for benefits and expenses through the payroll.  HMRC can impose penalties for failure to file P11Ds.

The following instructions have been issued by HMRC to assist employers in meeting their filing obligations and ensure accurate processing of returns.

1. The employer has payrolled all benefits and expenses.  The employer:
1. must telephone the Employer Helpline at least a week in advance to advise HMRC that all benefits have been payrolled for that year;
2. may submit P11Ds online or on paper forms but, if paper forms or P11D lists are used, they must be clearly marked “PAYROLLED”
3. must complete each P11D using the ‘amount made good or from which tax deducted’ boxes, where this box is available and is applicable to the particular benefit
4. complete the P11D(b) as normal.
2. The employer has payrolled some, but not all, benefits and expenses.  The employer:
1. must complete two P11Ds, one for non-payrolled benefits and another for payrolled benefits
2. may submit P11Ds online or on paper forms but, if paper forms or P11D lists are used for the payrolled benefits, they must be clearly marked “PAYROLLED”
3. complete each P11D for payrolled benefits using the ‘amount made good or from which tax deducted’ boxes, where this box is available and is applicable to the particular benefit
4. complete each P11D for non-payrolled benefits in the normal way (the ‘amount made good or from which tax deducted’ can still be used if relevant
5. complete the P11D(b) as normal.

Further information:

Reporting any expenses and benefits that you have payrolled
Notes for Payroll Software Developers – March 2011

Tags: benefits of p11d reporting, p11d, Recent Payroll News

This entry was posted on Monday, April 11th, 2011 at 10:52 and is filed under P11D. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.