The deadline for filing the 2022/23 P11D forms to report benefits in kind provided to directors and employees is 6 July 2023.
You also need to report how much Class 1A National Insurance (NI) you owe on a P11D(b) by the same deadline and pay the liability by 22 July 2023 (or 19 July 2023 if payment is made by cheque). The Class 1A NI rate for 2023/24 is 14.53%.
You do not need to send a P11D if you’re paying employees’ expenses and benefits through your payroll. However, a P11D(b) is required to pay the Class 1A NI.
Forms P11D and P11D(b) must be submitted online through one of the following:
- PAYE Online for Employers
- PAYE Online for Agents
- commercial payroll software that is recognised by HMRC
Paper submissions are not accepted by HMRC for 2022/23 onwards.
For employers or agents who need to submit up to 500 P11D and P11D(b) returns, the free HMRC PAYE online services can be used. For anything more, 3rd party software is required.
Trivial benefits exemption
Remember that ‘trivial’ benefits in kind do not need to be reported on form P11D. Trivial benefits are those that:
- cost the employer £50 or less to provide;
- are not cash or a cash voucher;
- are not a reward for work or performance; and
- the employee is not contractually entitled to.
For directors of a ‘close company’ there is a cap of £300 trivial benefits per tax year.
PAYE Settlement Agreements (PSA)
A PAYE Settlement Agreement (PSA) allows employers to make one annual payment to cover all the employee tax and employer’s NI due on minor, irregular or impracticable expenses or benefits. Impracticable means that the expenses and benefits are difficult to place a value on or divide up between individual employees (e.g. the costs of a staff party where the £150 per head limit has been exceeded).
From 6 April 2023, there is a new online service available from HMRC for employers and their agents to apply for a PSA. If you’re unable to apply online, you can apply by post. The online service can also be used to amend or cancel an existing PSA.
The deadline for applying for a PSA is 5 July following the first tax year it applies to. What can be included in a PSA depends on when you apply. If you applied for a PSA before the start of a tax year, you can include any expenses and benefits contained in the agreement. If you applied for a PSA after the start of the tax year, you may need to report some items separately on form P11D.
Employers must calculate the PSA liability and pay the amounts due to HMRC by 22 October after the tax year (19 October if paying by cheque).