Employers should be aware that if the form P11D indicates that Class 1A National Insurance Contributions are due, then these should be paid by 19 July 2015 if settled by cheque, or by 22 July if settled electronically.
In many cases, the last Employer Payment Summary will have been ticked to indicate that no P11D is due, so of course no Class 1A NIC will payable. The P11D itself is a rather strange hybrid covering both benefits in kind (brown box items) and reimbursed expenses (blue box items). If there are only reimbursed expenses, then no Class 1A NIC will be due.
Hardly any employers will actually pay Class 1A NICs, but we have quite an empire set up to collect them, not to mention P9D returns. Why not abolish the lot? Well we certainly could do with simplification of the P11D/P9D system, but if it were abolished altogether, soon employers would be getting all sorts of different kinds of untaxed rewards for their services. Company directors in particular would acquire lots of new opportunities to manipulate the tax and NIC system in their favour. This might be considered to be unfair to other taxpayers who lack these opportunities, and so we have the P11D system to plug a hole in tax collection. That’s not to say that it is not too complicated though.
David Porthouse & Co are accountants in Carlisle serving clients in Cumbria and North West England. They have a major interest in new technology and are developing an optical number recognition/datepoint system for scanning bank statements with the intention of reducing the costs of accounts preparation. They also have a spreadsheet system which can be e-mailed back and forth between the accountant and the client. They have now developed an online quotation system for transparent pricing.