Could you be affected by HMRC mistakes?

By James Nadal | 25th June 2014 | 15 min read

 

If you provide any taxable benefits to employees then you must submit to HMRC a P11D form (or P9 for employees earning less than £8,500 per year) for each employee receiving benefits.  You must also submit one additional form, P11D (b), to declare the overall amount of Class 1A National Insurance contributions (NICs) due on all the expenses and benefits you’ve provided.
Examples of taxable benefits include:
Private medical insurance
Company cars
Gym membership
You must also provide a P11D form to each of your employees which details the benefits they have received over the year and tax due.
Time is of the essence!
The deadline for submissions is 6th July 2014 and payment of Class 1A NICs should reach HMRC by 22nd July.  The HMRC will impose fines for late submissions – currently £100 per 50 employees for each month or part month that a return remains outstanding.  
Submitting returns
Many companies ignore their P11Ds as they are unsure what to do and how to go about working out the tax that is due for each employee but with the fines mentioned above you could end up with a nasty surprise by not staying on top of this once a year task.
The fastest, easiest and most secure way to submit your returns is electronically.  Quality of returns is extremely important to ensure they are not rejected by HMRC.  Using a specially designed software such as IRIS P11D Organiser will ensure that the often complex calculations are performed correctly and that the returns contain accurate information so are accepted first time.   Things get even easier after year one as benefits can be rolled forward and items inputted throughout the year as necessary (preventing the last minute rush!)
Click here for more information on IRIS P11D Organiser. To arrange a free online demonstration please call the IRIS team on 0344 815 5677.

Workers across the UK could be getting an unwelcome surprise from HMRC as it has come to light that around 3.5 million individuals haven’t paid enough tax in the 2013 – 2014 tax year.  This money will have to be re-paid to HMRC leaving many feeling out of pocket.

A further 2 million people have already paid too much tax, meaning a total of 5.5million people will be affected by the errors.  This total figure is up 0.3 million on the number of errors made the previous year, something that many feel that this is unacceptable following the £270 million introduction of RTI.

A spokesman for HMRC has said “Most people pay the right tax throughout the year, but there will always be a small percentage of the 41 million people in PAYE who have underpayments or overpayments at year end.”  They added “The effect of Real Time Information is not reflected yet as it has not bedded in, but over time RTI will help to reduce the number of cases that have to be reconciled”


The staged roll-out of RTI (and some employers not having the correct systems in place) does also mean that some businesses have not used RTI for the full year.  One thing is certain that the pressure will be on HMRC to get information as accurately as possible in this tax year and this could mean coming down harder on any companies not complying with HMRC legislation.


IRIS was one of the first payroll providers to be included in the RTI trial and understands the importance of sending the correct information to HMRC each month.  Not complying with RTI will not only result in HMRC fines but could also mean employees getting unexpected tax bills to cope with – not a good way to keep employees happy.

If you are worried about RTI compliance please contact IRIS on 0344 815 5700. IRIS payroll software has submitted RTI returns for more than 200,000 companies and the range of HMRC approved IRIS solutions includes IRIS Basics which is free for up to 10 employees, IRIS Payroll Business, which offers more advanced features and the cloud-based Kashflow Payroll.

*Based on figures showing total number of PAYE reference numbers using IRIS payrolls.