Missing a deadline for a P11D can be a stressful experience for any employer. The P11D form is used in the UK to report expenses and benefits provided to employees that are not put through payroll. Submitting this form to HM Revenue and Customs (HMRC) is crucial because it ensures that both the employer and employee are paying the correct amount of tax. This comprehensive guide will explore the steps you should take if you miss the P11D deadline, the potential penalties involved, and how to prevent this from happening in the future.
Understanding the Importance of the P11D Form
The P11D form is an essential document that details the value of any ‘benefits in kind’ that employees or directors have received during the tax year. These can include company cars, health insurance, travel expenses, and more. The information from the P11D is used to calculate how much National Insurance Contributions (NICs) are due on these benefits, which impacts both the employer’s and the employee’s tax liabilities.
Consequences of Missing the P11D Deadline
The deadline for submitting the P11D forms is July 6th following the end of the tax year in which the benefits were provided. If an employer fails to meet this deadline, several consequences can arise:
Penalties: HMRC can impose penalties for late submission of P11D forms. The penalty structure is £100 per 50 employees for each month or part month that the form is late.
Interest and Charges: Apart from penalties for late filing, interest may accrue on any overdue amounts relating to the benefits reported on the P11D.
Increased Scrutiny from HMRC: Repeated failures to comply with statutory deadlines can lead to increased scrutiny from HMRC, which might include audits or more frequent checks.
Immediate Steps to Take After Missing the Deadline
If you realise you’ve missed the deadline for submitting your P11D, it’s important to act quickly:
Submit the P11D as Soon as Possible: The sooner you file the P11D after the deadline, the better. Late submission is better than no submission, as it demonstrates to HMRC your intent to comply.
Pay Any Associated Charges Promptly: If there are any National Insurance Contributions due because of the benefits in kind reported on the P11D, ensure these are paid as soon as possible to prevent further penalties and interest from accruing.
Contact HMRC: It’s advisable to contact HMRC directly to inform them of your situation. They may provide guidance on what steps you should take next and how to minimise the impact of the late submission.
Request for a Reasonable Excuse: If there were extenuating circumstances that led to the missed deadline, you might be able to appeal against any penalties by providing evidence of a ‘reasonable excuse’. HMRC considers each case on its merits, and valid excuses typically relate to unexpected or outside your control events.
How to Appeal Against Penalties
If you receive a penalty from HMRC for the late filing of your P11D, you have the right to appeal. Here’s how you can do this:
Write to HMRC: Your appeal must be in writing and should clearly state why you believe the penalty is unjustified or why you had a reasonable excuse for late filing.
Provide Supporting Evidence: Any evidence that supports your claim of a reasonable excuse should be included in your appeal. This could be hospital admission letters, a death certificate, or evidence of technical failures, for example.
Follow HMRC’s Process: Ensure that you follow the process outlined by HMRC for appeals, which is typically detailed in the penalty notice.
Preventing Future Late Submissions
To avoid the stress and potential financial implications of missing the P11D deadline in the future, consider the following steps:
Maintain Good Records: Keep accurate and timely records of all benefits provided throughout the year. This makes the process of completing the P11D form much simpler and quicker.
Set Reminders: Use digital calendars and task management systems to set reminders for critical deadlines like the P11D submission date.
Use HMRC Tools and Guidance: HMRC provides a range of tools and guidance to help employers understand and meet their obligations. Make use of these resources to ensure compliance.
Consider Professional Help: If managing P11D submissions is consistently challenging, consider seeking professional assistance from an accountant or tax advisor.
Missing the P11D deadline can have significant implications, but by taking prompt action and following the correct procedures, you can mitigate the effects and ensure compliance. Moving forward, implement systems and processes that help maintain compliance with HMRC requirements.
At Double Point we understand how challenging managing tax affairs and HMRC compliance can be. We are here to help with managing your P11D obligations, from ensuring accurate and timely submissions to handling any communications with HMRC. Set up a free consultation with us today to ensure your business meets all its statutory deadlines and minimise any potential penalties or disruptions.
