P11D Returns

It is advisable to engage some Carlisle accountants to submit your P11D return if one is due. The basic principle of P11Ds is that if we didn’t have them, then employers would be providing all sorts of non-cash benefits to employees to circumvent the PAYE system. However the P11D regime that we have seems to be designed to be as complex and as bureaucratic as possible.

If you have Gross Payment Status under the Construction Industry Scheme and you want to keep it, then all your returns should be filed on time and the P11D is one of the returns for which this needs to be done. Don’t take chances.

Otherwise you have until July 19th to file the return, but if you file after this date, then the penalty is £100 per month for a small number of employees, backdated to July 7th. This means that if you file on August 7th, the penalty will be £200.

If you do not file the P11D at all, then HMR&C will wait four months and then send a penalty notice for £400 some time in November. HMR&C know a P11D is due if you did not tick the “P11D not due” box on the P35. Appeals against this £400 penalty can be successful.

What happens if the P35 said a P11D is due, but it turns out to be a blank or NIL return?  You must take some action to avoid a penalty of £400. If you try to submit a NIL return electronically, you may find that the HMR&C software rejects the submission. The remedies are either

(1) Use the online NIL return form to be found at  www.hmrc.gov.uk/payerti/exb/forms.htm.


(2) Send a paper NIL return to

HM Revenue & Customs (NIC & EO)
P11D Post Team Room BP8002
Tynemouth House
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

P11Ds are due for most directors and for employees earning more than £8,500 per annum inclusive of benefits. For some working directors and for lower-paid employees, a form P9D is due instead, but this is rarely seen.

P11Ds are also used to report payments made on behalf of employees which are actually legitimate business expenses. If this is the case, then the employee also needs to send in a claim under section 336 of the Income Tax (Earnings and Pensions) Act 2003. This can be sent with a paper P11D return to the Longbenton address above, or it can be sent separately to

HM Revenue & Customs
Pay As You Earn
PO Box 1970
L75 1WX

Submitting a s336 ITEPA 2003 claim is notionally the responsibility of the employee and it may be sent in with the employee’s tax return, so the time limit would appear to be the following January. However, if the employer or the employer’s accountant submits the claim, then some time just after July 6th is recommended, and by December 30th at the latest.

The reasoning behind the December 30th deadline is that if a claim is disallowed, then tax can be collected by amendment to the employee’s tax code, for which notification by December 30th is required, not January 31st.

Each employee should be given a copy of their P11D to enable them to complete their personal tax returns. The deadline for this is also July 6th, but these forms are usually generated and distributed at the same time as the P11D(b) and P11D submission.