Will This Be Your Final P11d Deadline?
Here comes payrolling of benefits ...
For many years, the form P11d has been a stable landmark in the sea of tax forms that businesses and individuals deal with each year. But might your next one be your last one?
If you opt for payrolling of benefits next year then this could be your last P11d!
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If you are an employer, then the deadline for filing your 2016/17 forms P11d and P11d (b) is 5th July 2017. Preparing the forms can be an onerous burden, although you can, of course, call on your accountant for help.
"Looking forward to the next tax year, you can start ‘payrolling of benefits’. This clumsy bit of jargon is actually fairly self-explanatory.
Several disadvantages flow from the current P11d system, principally because it provides historical information to the taxman about tax liabilities.
For the employee, it often means that you build up a historical tax bill that you won’t know about until a few months after the end of the tax year. At this point, you are presented with an unexpected and unwelcome tax bill! For the taxman, it means having to change everyone's tax code and collecting taxes in arrears.
Changing the system by which information is provided to HMRC and tax is paid, has got to be a good idea, right? Ta da! Welcome to ‘payrolling of benefits’. Which, as the name suggests, means that the benefits in kind are included in the payroll each month so that any tax is paid as you go along.
Unfortunately, HMRC won’t let you start using the payrolling of benefits system part way through a tax year. You need to register to use this facility before 5th April in order to be able to use it after 5th April!
Now is a good time to register to ensure you are able to use the new system. In any case, you need to do it between now and 5th April 2018 in order to use it for the tax year 2018/19.
"Do note that the taxman 'should' change the notice of coding for your employees so that they don’t get taxed twice!"
If you would like to get more information about payroll in general, form P11d or the new payrolling of benefits, then do give me a call on 0333 335 0422 or click here to send me an email and let's see how we can help you.
Until next time ...
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.