P11d’s, ATED & Form 42 Returns: Now due to HMRC

6th April 2023

Although a business may have an accounting year which doesn’t end on 5 April each year, they will still be required to submit various returns to HMRC on a tax year basis.

Compliance is now an extremely important aspect of any business, with deadlines, fines and indeed penalties being applied where dates are missed, or information is incorrect. In the next couple of months, the following business-related returns will be due.

Annual Tax on Enveloped Dwelling (ATED) Return 

An ATED chargeable period runs from 1 April to 31 March. Normally an ATED return must be made within 30 days of the date on which the property first comes within the charge to ATED for any chargeable period. Where the single-dwelling interest is held on the first day of the chargeable period, that is 1 April, the return must be filed by 30 April in the year of charge.

However, ‘new dwellings’ and ‘dwellings produced from other dwellings’ have been provided with a grace period i.e. 90-day filing the ATED return.

This year’s ATED return is due by 30 April 2023, and the tax charge cost is based on the property’s value, and this is as low as £500,000. The amount can range from £3,800 up to £244,750 across six bands of value determined by reference to a property’s value.

One very important aspect to consider here is that for this reporting period, the value is determined by the market value of the property as at 1 April 2023, or its original cost if acquired after this date. This means all properties must be revalued by 1 April 2023 and this value is the one which will be used for a specific property for the next 5 years.

The revaluation can be done either by a professional, or it can be a self-valuation with sufficient back-up. Whilst a formal valuation is not strictly required, it is advisable to use a property professional to ensure that the figure is robust and reasonable.

Form 42

If you’re an employer operating a share scheme on behalf of your employees or have carried out other employment-related securities transactions, you may need to notify HMRC and submit an ERS return, also known as a Form 42.

The Employment Related Securities return should be submitted online by 6th July following the end of the tax year and can be done by either the employer or an agent. The next deadline is 6th July 2023.

There are late filing penalties for returns filed after 6th July and potential penalties for errors.

You’ll still need to submit a return if there are no share or security transactions during the tax year, and for as long as you operate the share schemes.  Also, even if HMRC doesn’t issue you with a reminder, you should submit a return if you’re still operating employee share schemes.

Form P11d

At the end of the tax year you’ll need to submit an end-of-year form to HMRC for each employee you’ve provided with expenses or benefits. The form will either be a P9D or a P11D, depending on the expense or benefit.

You may need to submit form P11D(b) to report the amount of Class 1A National Insurance due on all the expenses and benefits you’ve provided. You should do this if:

  • you’ve submitted any P11D forms
  • you’ve been sent a P11D(b) form by HMRC

If you don’t submit any P11D forms but you’ve been sent a P11D(b) by HMRC to complete, you can tell HMRC that you don’t owe Class 1A National Insurance by completing a declaration.

The deadlines are as follows:

What you need to do Deadline
Submit your end-of-year forms (P9D and P11D) online to HMRC 6th July
Give your employees a copy of the information on your forms 6th July
Tell HMRC the total amount of Class 1A National Insurance you owe on form P11D(b) 6th July
Pay any Class 1A National Insurance owed on expenses or benefits Must reach HMRC by 22nd July (19th July if you pay by cheque)
Disclaimer - All information in this post was correct at time of writing.
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