Employers: don’t overlook your 2016/2017 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 (ERS);
  • Short Term Business Visitor declarations (STBV).
Penalties and interest will be due on late filing or late payment for any of the above compliance obligations so it is very important to make sure deadlines are not missed. It is possible to appeal but only in limited situations.

P11Ds
The deadline for filing your 2016/2017 P11D/P11D(b) forms with HMRC is 6 July 2017.
The Class 1A due for the year which is shown on the P11D(b) needs to be paid by 22 July 2017 (electronic payment) or 19 July 2017 if paid by cheque.

Common reportable benefits include health insurance, dental cover, company cars and beneficial loans.
 
With dispensations now abolished, the responsibility is now on employers to self-assess the reporting position for business expenses. Where bespoke scale rates are used, these will need to be approved by HMRC unless previously agreed in the last five years.

With the introduction of payrolling benefits, although employee form P11Ds are not required, employers are still required to complete the form P11D(b) and pay Class 1A NIC to HMRC under the same timescale.

PAYE Settlement Agreements (PSA)
A PSA is an annual arrangement under which employers can settle in a single payment the income tax liability on usually minor benefits in kind and expenses payments given to their employees.

Common items of expenditure usually included in such agreements are staff entertaining and staff 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 for the types of benefits to be included in the agreement and this all needs to be in place by 5 July 2017;
Employers then 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 22 October 2017 (electronically) or 19 October 2017 (cheque);
 
If no agreement is in place and you have this type of expenditure then the amounts would then either need to be disclosed on the individual employees P11D or a voluntary disclosure entered into with HMRC. This could potentially raise your profile with HMRC.

Employment related securities annual returns
Companies operating any employee share schemes are required by HMRC to file an annual return by 6 July following the tax year. Penalties apply for late submission of returns and, in the case of approved schemes, HMRC can ultimately withdraw the approved status for continued errors and late filing.

 They must report via an online service, detailing events such as share awards, grants and exercises of share options, whether through a tax-approved or unapproved scheme.

For approved EMI schemes, in-year returns will also be required for new grants.

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, STBV 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.