P11Ds and Leavers - Guest Article by Ian Holloway
UK-wide, employers, agents, bookkeepers and other professionals are completing forms P11D for employees who were in receipt of taxable expenses and benefits for the previous tax year. These have to be with both the employee and HMRC by 06 July. However, there is always the question of what needs to happen when an employee has left. Is there an obligation on the ex-employer to send them a P11D?
To answer the question, it is vague advice looking at HMRC’s guidance on Gov.UK. This simply says ‘give your employees a copy of the information on your forms’ by 06 July. Therefore, as is often the case, it is necessary to turn to the legislation.
Employees Still in Employment
The Income Tax PAYE Regulations 2003 (Regulation 94 (1)) is clear that ‘before 07th July following the end of a tax year, the employer must give a statement to every current employee’. Therefore, employees still in your employment must receive the P11D on or before 06 July to meet this statutory deadline.
It is necessary to delve deeper into Regulation 94 to answer the question ‘do I have to give a P11D to an employee who has left’:
- Regulation 94 (3) says that if a P11D is completed for an employee who left before 07 July, the employer has an obligation to send the P11D to the employee’s last known address. The individual is still regarded as a current employee for the purposes of providing the P11D
- Regulation 94 (4) says that an employee who is not a current employee is not entitled to be sent a P11D or be sent one to their last known address. A ‘former employee’ is required to give the employer ’notice’, i.e., they have to request one. They are entitled to make this request at any time up to 3 years after the end of the tax year in question. Where requested, the ex-employer must provide this by 07 July or within 30 days of receiving the notice, whichever is the later
So, all P11Ds for all employees must be with HMRC before 07 July (hence the reason we have the 06 July deadline). Yet, with regards to the provision of the P11D to the employee, we have to consider whether the legislation regards them as current or former employees:
- A current employee is one that was in employment on the last day of the tax year and is either still in employment or left before 07 July following the end of the tax year. The employer must provide them with a P11D
- A former employee is one that was not in employment on the last day of the tax year, for example a mid-tax year leaver. The employer only has to provide them with a P11D if it is requested
Provision of Duplicates?
This is interesting. The legislation is silent on the provision of duplicate P11Ds to current employees (i.e., they were in employment on the last day of the tax year). It is implied, therefore, that duplicates can be issued to a current employee.
However, Regulation 94 (6) is explicit when it says that former employees cannot request a duplicate P11D for the same tax year.
Top Tip for Employers
A simple communication exercise will, hopefully, prevent the cost and administration burden of providing duplicates in the future. I would suggest something along the lines of a message saying ‘please find attached your P11D and we advise that this is retained safely’.
Perhaps the suggestion of an administration charge for duplicates may help people’s memories of where they placed it!
Ian Holloway is a highly respected payroll practitioner, writer, advisor and trainer. He has worked in the payroll profession for over 30 years and is now Payroll Consultant at i-Realise, an independent change management business operating in the HR & payroll space.
Ian has hands-on experience processing payrolls from all sectors, large and small. In 2011 he shifted focus to his passion for educating the profession and also worked on improving payroll software solutions to meet legislative requirements and business goals. He is the Trailblazer Chair for the Level 3 Payroll Administrator Apprenticeship and the Level 5 Payroll Assistant Manager Apprenticeship. He also advises on the practical impacts of new government legislation.
As Payroll Consultant at i-Realise, Ian’s broad experience and up-to-date knowledge allows him to publish insights to UK HR & Payroll professionals through workshops, white papers, newsletters and face-to-face presentations. Ian regularly speaks at industry conferences and is a featured writer for several Payroll, HR and Finance publications. Ian leads i-Realise’s monthly payroll forum, a confidential platform for in-house payroll leaders and managers to discuss new legislation and collectively improve best practice.
You can contact Ian at firstname.lastname@example.org