HMRC update: reporting expenses and benefits

16 February 2023

HM Revenue and Customs (HMRC) will no longer accept new informal payrolling benefits arrangements from 6 April 2023. In addition to this, from 6 April 2023 all P11D and P11D(b) forms must be reported online. HMRC published clarification on reporting expenses and benefits for the tax year ending 5 April 2023 in the Employer Bulletin for February 2023.

For employers who have informal payrolling in place:

  • they must register now to payroll expenses and benefits for 2023/24
  • if an informal agreement is already in place with HMRC to payroll benefits for the 2022/23 tax year, then it is acceptable to continue to submit P11Ds marked ‘payrolled’
  • this agreement must be formalised as soon as possible

For employers who are yet to payroll expenses and benefits:

  • they can register now to payroll benefits from 6 April 2023 (deadline is 5 April 2023)
  • there is no longer the need to submit a P11D for each employee for who they payroll benefits, as payrolling is quicker and easier

For employers payrolling benefits-in-kind (BIKs):

  • a Class 1A National Insurance contributions (NICs) liability may still be payable and therefore a P11D(b) will still need to be sent to tell HMRC how much employer Class 1A NICs are owed
  • a P11D will also need to be sent to show any benefits paid that were not payrolled. Instead of giving employees a P11D, a letter explaining what was payrolled will need to be issued

More information on taxing employees’ benefits and expenses through payroll is available.

For employers who do not yet payroll BIKs:

  • the deadline for reporting any P11D expenses and BIKs provided in the 2022/23 tax year, is 6 July 2023

Reporting expenses and benefits for 2022/23:

  • a P11D and a P11D(b) must be sent to HMRC no later than 6 July 2023, for any paid BIKs to employees
  • HMRC charge penalties monthly and issue penalty notices each quarter, until the return is filed

From 6 April 2023 all P11D and P11D(b) forms must be reported online:

  • for the 2022/23 reporting year, HMRC will no longer accept paper P11D and P11D(b) forms

HMRC recommends use of one of the following methods:

If a mistake is made and need to submit an amendment:

  • from 6 April 2023 paper amendments will no longer be accepted. Instead, HMRC will launch a new online submission link to submit amended P11D and P11D(b) forms. More information on how to use this will be available in the April edition of the Employer Bulletin
  • further information on expenses and benefits for employers is also available.

To help employers submit online, the ‘submitting forms P11D and P11D(b) online’ webinar will be available. This will be live in May, June and July 2023. The recording will also be uploaded to the webinar page. To register for PAYE webinars, go to guidance for HMRC email updates, videos and webinars for employing people.

If you are thinking of making the move from P11Ds to payrolling benefits, then the CIPP have the course for you. Book the online course now, by visiting here.

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