P11D penalties

In the last few weeks many employers have received letters from HMRC warning that they are at risk of receiving a penalty for late filed forms P11D or P11D(b). However, in most cases those forms were submitted to HMRC on time.

The truth is the P11Ds and P11D(b)s have arrived, but HMRC are over eight weeks behind with the processing of those forms. This bottle-neck has been created because HMRC staff have been diverted to administer the coronavirus support schemes, which is understandable.

The processing delay applies to P11Ds submitted online as interactive PDF forms, as well as paper forms sent through the post. It is not clear whether P11Ds submitted using commercial payroll software are also affected.

The HMRC computer doesn’t know the P11D forms have arrived, so it has been issuing penalty warning letters to employers and payroll agents. Unfortunately, no-one thought to turn-off this automatic procedure, or to communicate the problem to the professional bodies. Large employers have been informed through their HMRC customer compliance managers (CCM).

If you have received a penalty warning letter, double check that the forms were submitted on time, but don’t bother phoning HMRC to check that the forms were received. If an actual penalty notice arrives, appeal against it immediately.

"This information is taken from the weekly Tax Tips, published by the Tax Advice Network, for which you can subscribe at www.TaxAdviceNetwork.co.uk"