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Employer end of year reporting

Employer end of year reporting

Often, part of an employee’s remuneration package will include non-cash benefits such as company cars, gym membership, private dental or health insurance in addition to their salary. Individuals see these as important ‘perks’ of their job and can provide a simple way to make employees feel valued.

More than ever, businesses are likely to need to set challenging goals to help them recover from recent events and will want to reward and incentivise key employees who are fundamental in helping them reach those goals. Gifts and awards of shares or share options are often a great way of doing this.

However, it is important to understand that providing employees with benefits and incentives can result in HM Revenue & Customs (‘HMRC’) requiring certain reporting obligations to be fulfilled by way of submission of year end returns. The deadline for submission of the year end returns is 6 July 2021.

End-of-year expenses and benefits (forms P11D(b) and P11D)

Where directors and employees have been provided with taxable benefits, employers must consider whether form P11D will be required for the 2020/21 tax year and if any tax or National Insurance liabilities have arisen.

A comprehensive list of benefits can be found on the HMRC website here, but most common items include company cars and fuel benefit, professional subscriptions, private health or dental insurance. The rules around less common benefits such as loans, accommodation, and entertaining should also be carefully considered.

Employment Related Securities (“ERS”) and Employment Management Incentive (“EMI”) End of Year Returns

Where there has been any type of equity transaction or share plan during the year to 5 April 2021, it is almost certain that a return will need to report these events.

Additionally, where such transactions have been reported in prior years or a share plan remains open, there will be an ongoing filing requirement whether or not any new transactions have taken place. If a scheme has ceased during the year, HMRC will also require notification of this as well.

Don’t let the incentives become your disincentive! Late returns trigger automatic penalties. You can rely on us to help with all aspects of your reporting requirements, ensuring that your compliance needs have been dealt with in a timely and professional manner.

Get in touch with our team on 01892 546546 to find out how we can help you.