While the penalty clock starts ticking on the 7th, it is not actually enforced unless returns are still outstanding on the 19th
The Income Tax PAYE Regulations 2003 (reg. 85) requires that employers return the P11D (or P9D) and P11D (b) to HMRC “before 7 July following the end of the tax year” – in realty, this means they must be received at HMRC on or before 6 July.
I am sure we all realise how critical this deadline is and a recent helpful communication from HMRC’s Software Developer Support Team stresses:
“Where employers fail to submit their P11D and P11D (b) returns employees may have incorrect tax codes (and tax bills) and any delays beyond 19 July might result in the employer being charged a penalty.”
So, why do they say the 19 July as opposed to the 6th? Simply, while the penalty clock starts ticking on the 7th, it is not actually enforced unless returns are still outstanding on the 19th. Paragraph 25 of HMRC’s CWG5 booklet Class 1A National Insurance Contributions on Benefits in Kind confirms this:
“The filing date for the return is 6 July. If we do not receive the return by 19 July it will attract a penalty of £100 per month or part month of lateness, for every 50 or part-batch of 50 employees provided with benefits.”
Employers need to be aware that it is fine for P11Ds to be submitted to HMRC up until 19 July without a penalty being charged. However, if they are submitted on the 20th, the clock will have been ticking since the 7th and the penalty regime will be enforced. This “grace period” does not apply to the employer’s obligation to ensure that employees employed on 5 April receive their P11D / P9D by 6 July. So:
• Copy to HMRC – by 19 July at the latest
• Copy to employees – by 6 July
In reality, we have do have a few extra days but please, please ensure that all of your P11D / P9D returns and the P11D (b) are with HMRC by the 19th at the very latest.