No benefits but still need to file a form?
As many of our readers will be aware, new payroll legislation on the treatment of certain business expenses and benefits came into effect from 6 April 2016. One of the main changes was the removal of the requirement for employers to report certain expenses paid to employees (whether deductible or not) on form P11D at the end of the tax year.
The business expenses and benefits that no longer need to be reported include reimbursed costs to employees covering business travel, phone bills, business entertainment expenses and uniforms and tools for work. As an alternative to reimbursing employees for actual costs incurred, a benchmark or special rate approved by HMRC may be used.
These types of expenses are now referred to as exemptions and have replaced dispensations (which no longer apply). Employers that agreed dispensations using bespoke rates prior to 6 April 2016 can continue using the bespoke rates for up to 5 years from the date they were agreed.
Whilst no P11D’s are technically required, if HMRC has sent you a P11D form or P11Db you still need to tell HMRC that you don’t need to make a return by submitting an online "No return of Class 1A NIC" declaration.
HMRC is expected to fix this anomaly but it will be too late for the 2016-17 tax year. The deadline for submitting the 2016-17 forms P11D, P11D(b) and P9D was 6 July 2017.
Planning note: If you are concerned that you may have failed to deliver the required returns by the due dates please call so that we can help you resolve the issue.