Employers: don’t overlook your 2015/2016 filing obligations

Keeping up with all your employer compliance deadlines can be a challenge for your business. With a relatively short time period to prepare and submit these returns, it can be costly if deadlines are not met or incorrect information is submitted.

Employers therefore need to consider the following reporting matters in the next couple of months:
  • return of expenses and benefits forms P11D and form P11D(b);
  • PAYE Settlement Agreements (PSA);
  • Employer Related Securities annual returns;
  • Short Term Business Visitor declarations.
P11Ds
Deadline for filing 2015/2016 forms P11D/P11D(b) with HMRC is 6 July 2016 – forms submitted after this date will attract a penalty.
Class 1A (due for the year shown on the Form P11D(b)) needs to be paid by 19 July by cheque.
Class 1A, by electronic payment, needs to be paid by 22 July.
Common reportable benefits include health insurance, dental cover, company cars and beneficial loans.
 
Common mistakes include:
  • forgetting that all P11D entries should be VAT inclusive;
  • failing to report the reimbursement of an employee’s personal mobile phone bill (exemption only applies to employer-provided phones);
  • incorrect apportionment of private medical insurance where the premium is renewed during the tax year;
  • incorrect list price for company cars;
  • overdrawn directors’ loan accounts not being reported as beneficial loans.
PAYE settlement agreements (PSA)
A PSA is an annual arrangement under which employers can settle in a single payment the income tax liability on minor benefits in kind and expenses paid to their employees. Common items of expenditure usually included are staff entertaining and gifts, however  major benefits such as cars and medical insurance cannot.
 
The process works as follows:
Employers need to notify and agree with HMRC (via formal contracts) the types of benefits to be included – this needs to be in place by 5 July 2016.
Employers will then need to prepare and submit computations to HMRC on a grossed up basis by the end of August (no statutory deadline for this) with all liabilities being payable by cheque by 19 October.
Or electronically by 22 October.
If no agreement is in place, and you have this type of expenditure, the amounts would then either need to be disclosed on the individual employees P11D form or a voluntarily disclosure entered into with HMRC. This could potentially raise your profile with HMRC.
Employment related securities annual returns
Employee share schemes can be valuable and tax-efficient tools for retaining and motivating staff. 
 
Companies operating such schemes are required by HMRC to file an annual return  by 6 July following the tax year. Penalties apply for late submission of returns.
 For some share schemes, in-year returns may also be required. They must report via an online service, detailing events such as share awards, grants exercised and stock options, whether through a tax-approved or unapproved scheme.

Short term business visitors
Generally, when an assignee to the UK is employed by, paid by or working for a UK company, PAYE must be operated in the usual way. But, where employees are in the UK for less than 183 days in the tax year and a claim under an appropriate double tax agreement is possible, Short Term Business Visitor rules may apply.
 
If these rules do apply, no PAYE obligations should arise – but employers will still face some reporting duties. Certain information must be provided to HMRC by 31 May following the end of the tax year. The extent of the information depends on the number of days that the employees concerned have been in the UK.
Help at hand
Navigating these compliance requirements can be challenging. Please get in touch with Stuart Daltrey if you would like any help or advice.