HMRC is advising employers to use its PAYE Online service
Until this year, employers had three ways to submit P11D returns electronically:
Employers who have previously used the interactive PDF known as HMRC’s Online End of Year Expenses and Benefits service (option 3 above) to submit P11D and P11D(b) will no longer be able to use this service to submit returns for the 2021 to 2022 tax year.
HMRC has advised employers to use HMRC’s PAYE Online service. This service will allow submissions for up to 500 employees. You will use the same government gateway details to access this service. The PAYE Online Service can be used to submit your P46(Car) online, too.
If there is no P11D(b) is due for 2021-22, you may use the HMRC tool to notify them.
Most benefits are liable to Class 1A National Insurance and the amount of Class 1A National Insurance due should be reported on your P11D(b) form. There are some exceptions to this: for example, train tickets which are treated as travel vouchers and are liable to Class 1 National Insurance. To avoid future P11D reporting submissions, employers may choose to payroll their benefits, which then bypasses the annual P11D process. The tax liability is collected via the payroll and removed from the employee’s tax code.
Before you may payroll your benefits, you will first need to identify whether the benefit you provide is liable to Class 1A or Class 1 National Insurance and then follow the appropriate calculation to ensure the benefit is grossed up correctly.
More information on whether the benefit is liable to Class 1 or Class 1A National Insurance can be found via expenses and benefits for employers.
To benefit from the payrolling option, employers must first register and have processes in place to know the taxable benefit on a per-pay-period basis rather than obtaining the value once annually. For guidance on payrolling benefits and how to register, please see Payrolling employees: taxable benefits and expenses.
Read ACCA's technical factsheet, Treatments of benefit in kind – P11D guidance.