P11D and P11D(b): HMRC’s penalty warning letters

18 August: ICAEW’s Tax Faculty explains why employers and agents who have submitted forms P11D and P11D(b) on time are receiving penalty warning letters from HMRC.

HMRC has explained that for online filings, reasons for processing delays can include information on the P11D(b) submitted that does not match HMRC’s existing records, for example, company name or PAYE reference quoted is different. Rather than reject these submissions, the information is placed on a separate list for manual review and the error is corrected or contact is made with the employer. Such discrepancies will be clarified before penalties are issued, but a warning letter may have already been sent.

For paper filings, HMRC is six to eight weeks behind where it would normally be in processing forms P11D and P11D(b) as front-line staff have been moved to COVID-19 work. In normal years, logging receipt of the forms can be delayed for a variety of reasons, for example a cheque has been included with the form which is processed first by Debt Management or an incorrect postal address used.

The Tax Faculty has recommended to HMRC that it should use its consultation forums as communication channels when problems emerge so that employers and agents don’t waste their own and HMRC's time contacting HMRC, for example to get reassurance that their forms P11D and P11D(b) were received by the due date. 

HMRC has reassured the Tax Faculty that where forms P11D and P11D(b) were filed by the due date, online or on paper, employers do not need to do anything else and should ignore the penalty warning letter. 

HMRC will carry out other checks before deciding whether to issue penalties. If P11Ds and P11D(b)s were submitted on time and a late filing penalty is issued, employers or agents should appeal immediately.