HMRC have now issued the first in-year penalties notices to employers with fewer than 50 employees who missed the deadline for sending PAYE information to HMRC.
Rather than issue late filing penalties automatically when a deadline is missed, HMRC have announced that they will ‘take a more proportionate approach and concentrate on the more serious defaults on a risk-assessed basis.’
This approach is in line with the likely direction of HMRC’s general approach to penalties, outlined in the HMRC penalties: a discussion document which they issued earlier this year. HMRC have confirmed that this ‘risk-based’ approach will apply to submissions that were late from:
6 March 2015 for employers with fewer than 50 employees; and
6 January 2015 for employers with 50 or more employees.
Penalties for 2015/16 will also continue to be risk-based.
HMRC had previously announced that they will not be penalising minor delays of up to three days.
HMRC are reminding employers:
‘Even if employers do not get a penalty, they are required by law to file on time and if they do not may be charged a penalty on a future occasion. The deadlines for sending PAYE information stay the same, including the requirement to send PAYE information on or before the time that employees are actually paid or due to be paid.’
HMRC have confirmed the process employers should use to appeal a penalty using the using the Penalties and Appeals System (PAS) on HMRC Online. Employers who receive a late filing penalty notice for tax year 2014/15 quarter 4 but who filed within three days of the reporting deadline may appeal and should use reason code A as set out in the What happens if you don’t report payroll information on time guidance.
In the Autumn Statement the government announced a package of measures which will impact the treatment of employee benefits in kind and expenses.
From 6 April 2015 there will be a statutory exemption for trivial benefits in kind costing less than £50.
From 6 April 2016, the £8,500 threshold below which employees do not pay income tax on certain benefits in kind will be removed. This threshold adds unnecessary complexity to the tax system. There will be new exemptions for carers and ministers of religion.
There will be an exemption for certain reimbursed expenses which will replace the current system where employers apply for a dispensation to avoid having to report non-taxable expenses. The new exemption for reimbursed expenses will not be available if used in conjunction with salary sacrifice.
The introduction of a statutory framework for voluntary payrolling benefits in kind. Payrolling benefits instead of submitting forms P11D can offer substantial administrative savings for some employers.
Please contact us if we can help with employee benefits and expenses reporting.
HMRC have published a list of common errors in the completion of forms P11D and guidance that medical benefits for lower paid employees are not reportable. The information is part of the lengthy Employer Bulletin so we have reproduced the guidance below.
The following is a list of common errors which are easily avoidable but can delay processing and cause problems with employees’ tax codes each year:
Submitting duplicate P11D information on paper where P11D information has already been filed online to ensure ‘HMRC have received it’. These duplicates can cause processing problems
Using a paper form that relates to the wrong tax year – check the top right hand corner of the first page
Not ticking the ‘director’ box if the employee is a director
Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form
Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section
Not correctly completing the declaration on the final FPS/EPS submission (for those employers operating PAYE in ‘real time’) or the box in Part 5 of form P35 (Employers Annual Return) to indicate whether or not P11Ds are due
Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion – you must report the full gross value of the benefit
Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in
Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2013 to 05/04/2014 to indicate the car was available throughout that year. If the car was available in the previous tax year, the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be completed i.e. left blank.’
The Employer Bulletin also includes guidance on a common error relating to the incorrect completion of a form P9D in relation to private medical insurance provided to lower paid employees. The HMRC guidance states:
‘Are You Completing P9D’s Needlessly for Employees in Receipt of Medical Benefit?
Do you know that if your employees earn less than the rate of £8,500 AND you arrange and pay the provider directly for the treatment or insurance a P9D does NOT need to be completed.
HMRC have issued an electronic warning message to employers who have not submitted their Full Payment Submission (FPS) return(s) during the January tax month. The message is intended to be a reminder to employers and is not a penalty notice.
HMRC are advising employers who receive this message that they should check that they have sent all the submissions that are due for their PAYE scheme.
If employers have notified HMRC recently that their business has ceased, then they can ignore the electronic message and do not need to contact HMRC.
HMRC started issuing these messages in December 2013 and this following link sets out instances where an employer may receive a non-filing message, although they have filed on time and where not action is required.
HMRC are reminding employers that with the end of the 2013/14 tax year approaching they will soon need to make their final 2013/14 PAYE (RTI) submission.
For most employers, the final submission will be their final Full Payment Submission (FPS) which advises HMRC about the very last employee payments for 2013/14 and this needs to be made on or before 5 April 2014. Details of how to make the final submission can be found on the HMRC website using the link below.
If we deal with the payroll on your behalf we will ensure this matter is dealt with on a timely basis.
The forms P11D, and where appropriate P9D, which report benefits and expenses for both employees and directors for the year ended 5 April 2013, are due for submission to HMRC by 6 July 2013.
Employees pay tax on benefits provided as shown on the P11D, either via a PAYE coding notice adjustment or through the self assessment system. In addition, the employer has to pay Class 1A national insurance contributions at 13.8% on the provision of most benefits.
If you would like any help with the forms P11D or the calculation of the Class 1A liability please get in touch.
From April 2013 HMRC have introduced an additional method for employers and agents to report end of year expenses and benefits called ‘Online end of year Expenses and Benefits forms’. These are HMRC produced web based forms. However at present only two of the new online forms are available which deal with the situation where no P11Ds are due or benefits have been fully ‘payrolled’.
HMRC have advised that the rest of the planned online forms are in the final stages of development and should be available in June, prior to the 6 July filing deadline.
Employers who previously used HMRC’s Basic PAYE Tools to create forms P11D, P9D and P11D(b) will need to consider alternative methods for completing these end of year forms as the tools will not provide this facility for the year ended 5 April 2013.