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P11D Refresh
The P11D form is an important part of the UK tax system for both employers and employees. This form captures the details on benefits and expenses that employees receive (outside of their remuneration package) and reports the tax consequences to HM Revenue and Customs.
We have prepared a comprehensive guide that covers the following:
- What the P11D form is used for.
- Who needs to file a P11D.
- Types of benefits and expenses reported.
- Filing deadlines.
- Responsibilities for the employer and the employee.
- Consequences of late or inaccurate filing.
For further details, please see our full guide here: Understanding P11D Filing: A Comprehensive Guide for Employers and Employees – Henderson Loggie.
Whilst there are changes on the horizon for P11Ds starting from 6 April 2027 (originally was going to be 2026, however, HMRC has delayed this), it is still vital for businesses to get this reporting right.
If you are interested in knowing what is changing from 6 April 2027, a link to the webinar we hosted is available to view at the end of the P11D guide.
PAYE Settlement Agreement Refresh
In cases where it is difficult to determine the precise tax and National Insurance Contributions for certain employee benefits, a PAYE Settlement Agreement (PSA) is used.
We have prepared a comprehensive guide that covers the following:
- What a PSA is.
- The types of benefits that can be included in a PSA.
- How to put a PSA in place.
- Benefits and implications of a PSA.
For further details, please see our full guide here: Understanding PAYE Settlement Agreements: A Guide for Employers – Henderson Loggie.
This can be an attractive route for employers as it can simplify the reporting process, however, it is important to understand the costs of this path as it can result in a significant liability.
Research & Development Tax Relief – Claim Notification Reminder
Does your company intend to submit an R&D tax relief claim for the first time, or was your last R&D claim over three years ago? If the answer is yes to either, then filing a claim notification is a requirement for you.
To combat fraud, HMRC has enforced a new claim notification deadline whereby companies must file a short form, containing standard company details and a high-level summary of the R&D project(s) they intend to claim for.
The filing window for claim notifications runs from the first day of the accounting period to 6 months after the end of the accounting period for which the R&D took place. For example, a company with an accounting period ending 31 December 2024 would have until 30 June 2025 to submit the claim notification form. This is a hard deadline, and HMRC makes no exceptions for late submissions.
All new claimants will be affected by claim notification, but the rules are a little more complex when considering the 3-year rule. At the simplest level, if a company has submitted an R&D claim via an original CT600 within the 3 years prior to the end of the claim notification window, it can file an R&D claim with no notification required. For a 31 December 2024 year end, the 3-year window would start from 30 June 2022 and end 30 June 2025. If the last claim was made before 30 June 2022, then a notification will be required.
There may be exceptions for claims made within the 3-year window that were submitted within amended returns. This applies to claims within amended returns that were filed on or after 1 April 2023 but relate to accounting periods beginning before 1 April 2023.
As the rules are complex, it is important to be proactive and consider carefully whether your company needs to file an R&D claim notification. Please get in touch if you would like to discuss this further with our R&D tax relief team.
Employment-related Securities
Following the end of the 2024/25 tax year on 5 April 2025, employers must consider whether they have any Employment Related Securities (ERS) reporting obligations.
Annual ERS returns must report any relevant events that occurred during the 2024/25 tax year. For example, the reporting requirement would generally apply to any event whereby an individual acquires shares/securities (on the exercise of an option or otherwise) in the company which employs them (or shares in another, even unconnected company, if by reason of their employment). Connected parties (such as a spouse) are also caught by these rules. A company needs to report an event even if it did not give rise to a tax charge, e.g., because an employee/director bought shares in the employing company and paid full market value for them. There are very few exemptions from this reporting requirement – it is very widely drawn, so you should take time to consider whether you might have anything to report.
The submission deadline for ERS returns for the 2024/25 tax year is 6 July 2025. Failure to submit on time can lead to penalties, even if there is no tax liability due to HMRC. If no relevant events occurred in the tax year, there may still be a requirement to file a ‘nil return’ to avoid penalties if a filing has been made previously.
If filing a return for the first time, please ensure that you factor in the administrative time of setting up the scheme online with HMRC, to ensure that the 6 July deadline is met. Please do not hesitate to get in touch – we’re happy to help you work out whether you need to do anything in advance of 6 July.
The ERS rules are complex and can lead to unexpected and potentially significant tax liabilities in connection with employee share acquisitions and share option arrangements, when put in place and/or at a future point in time. Contemporaneous advice is recommended before relevant events take place, so please do not hesitate to contact us if you are considering any form of employee share/share option incentive arrangements.
As a reminder, HMRC announced an important change to the reporting requirements for the Enterprise Management Incentive (EMI) Scheme, which came into effect from 6 April 2024. As a result of that, EMI options granted during the 2024/45 tax year must also be reported to HMRC by 6 July 2025.
Pillar Two
The UK has adopted the global minimum tax rules (“Pillar Two”) and has implemented the Domestic Top-up Tax and the Multinational Top-up Tax.
Any “large” businesses with at least one entity located in the UK will be required to register with HM Revenue and Customs.
A large business is classified as a group that has:
- Consolidated group revenue of €750m or more; and
- Breached this threshold in at least 2 of the previous 4 accounting periods.
The deadline for registration is six months from the end of the group’s first accounting period that started on or after 31 December 2023 – for any December 2024 year ends, the registration deadline is 30 June 2025.
If your group only has entities located in the UK, you will need to register to report for the Domestic Top-up Tax.
If your group has entities located in both the UK and overseas, you will need to register for both the Domestic Top-up Tax and the Multinational Top-up Tax.