HMRC Retires Online P11D For SMEs

It may have come as a surprise and annoyance for some to learn that HMRC decommissioned their Online End of Year Expenses and Benefits service. There are however other options for payroll managers of smaller companies.
In HMRCs February 2022 Employer Bulletin, entitled ‘Decommissioning of HMRC’s Online End of Year Expenses and Benefits Service April 2022’, they announced that the interactive PDF service commonly used by SMEs will not be available for 2021/22 submissions.
What was the End of Year Expenses and Benefits service?
An online, interactive PDF capability enabling small to medium sized businesses with up to 150 employees to create P11D forms for their employees. They could then send and amend P11D and P11D(b) forms electronically, or for print and post.
It also allowed employees to create and submit a Nil P11D(b), which would essentially tell HMRC that there is no Class 1A National Insurance liability.
What has changed?
Payroll managers will know that the tax year is not complete until employers have completed all of their P11D returns and submissions to HMRC, including the submission of P11D(b) and payment of Class 1A National Insurance Contributions.
Employers who do not payroll their benefits, which by-passes the P11D process, will now only have 2 ways to submit returns electronically, instead of the previous 3.
How can you submit P11D submissions?
Employers can still submit via payroll software depending on its functionality, such as BrightPay, IRIS or KeyPay, and HMRC’s PAYE Online service for submissions up to 500 employees.
How do I move to HMRC’s PAYE Online Service?
Moving to HMRC alternative service will be the most cost-effective option for many companies that rely on the online PDF. This service also provides more functionality, such as the ability to submit the P46(Car) online in addition to expenses and benefits returns.
There is technical support available for this service on 0399 200 3600.
The Payrolling option
Another option for employers is to move to payrolling expenses and benefits which avoids the P11D obligation.
The tax liability is collected via the payroll and removed from the employee’s tax code, however, this option can be complicated as employers have to register to be able to do this in the first place and implement processes to know the taxable benefit on a pay-per-period basis, rather than obtaining the value once annually.
As always, if you’re confused or need to talk through your options, you can contact us for advice.
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