Employers are facing a busy time in the next few weeks as they will be hit by several important tax deadlines.
Elwyn Turner, Director here at Dyke Yaxley Chartered Accountants, says one of the first reporting requirements was for taxable benefits provided to employees during the tax year that ended on April 5, 2021.
“Employers will need to complete Form P11D which has to be submitted by July 6, and any Class 1A National Insurance needs to be declared on Form P11D(b) with payment due by July 19.”
Elwyn says certain other, minor or irregular expenses or benefits provided to employees could be dealt with under a PAYE Settlement Agreement (PSA) that would need to be agreed with HM Revenue and Customs by July 6, with any tax reported by July 31, and paid by October 19.
“It’s important though not to overlook another key area of employee reward which also needs reporting at this time of year, and that’s Employment Related Securities.
“This wide-ranging reporting requirement covers gifts and awards of shares in your company to your employees – the kind of methods commonly used to recruit, reward and retain key employees.”
Elwyn says companies were increasingly looking at share-based rewards for current or prospective employees as generally the upfront cost to the company was significantly lower.
“But if you do consider this type of offer, you should not overlook the associated tax reporting obligations or whether there would be tax payable by the employee.”
He also says companies and Limited Liability Partnerships that were members of international groups should take care to identify situations where their employees had received shares in other group companies, including overseas operations, that would also be caught by the reporting requirements.
“If your employees have received shares during the tax year that ended on April 5, you must register all new Employment Related Securities schemes with HMRC – including one-off awards or gifts of shares – by July 6. And any grant of an Enterprise Management Incentive option must also be reported within 92 days of the grant.
“Employers should be warned though that it can take up to a week to register a scheme on the ERS online service, so it’s vital to take action sooner rather than later to ensure any technical issues can be resolved without any delay to your filings.”