Digital Submission of P11Ds Mandatory from 6 April 2023


In a significant move towards modernising the UK tax administration system, the HMRC’s February 2023 Employer Bulletin announced that the submission of P11Ds and P11D(b)s would be mandatory through digital channels from 6 April 2023. As a result, paper submissions will no longer be accepted. This transition reflects the government’s aim to establish a fully digital tax system in line with global standards and to streamline the overall tax administration process.

Digital Reporting

The UK government has been pushing for a fully digital tax system, as outlined in July 2020’s “Building a trusted, modern tax administration system” document. Digitalisation is viewed as the global standard for modern tax administration. The Income Tax (Pay As You Earn) (Amendment) Regulations 2023 and The Social Security (Contributions) (Amendment No.2) Regulations 2023 now legislate for mandatory online submissions of P11Ds and P11D(b)s, unless the employer is digitally exempt.

The transition from Voluntary to Mandatory Submissions

Online submission has been voluntary for over a decade and is already used by most employers. Moving from voluntary to mandatory submissions for digitally able employers aims to promote consistency, reduce manual intervention, lower costs, minimise processing times, and improve data quality. However, these benefits primarily affect HMRC rather than employers.

Submission Methods and Considerations

From 6 April 2023, employers or agents can submit P11Ds, P11D(b)s, and amendments through the following methods:

  1. PAYE Online for employers
  2. PAYE Online for agents
  3. Payroll software

This applies to P11D submissions for the tax year 2022/23 (due by 6 July 2023) and any amendments for previous tax years. Employers, agents, and software developers must consider several factors in adapting to this change, including awareness of the new mandate, necessary login details, multi-location PAYE schemes, and the potential impact on paper preparation services.

Electronic Versions and Penalties

HMRC acknowledges the need for electronic versions of the P11D and P11D(b), which will be available on from 6 April 2023. While the Income Tax (Pay As You Earn) Regulations 2003 will be updated by the 2023 Amendment Regulations, Regulation 2(3) states that no penalty will be charged for non-compliance.

Digital by Default

A discussion document titled “Simplifying and modernising HMRC’s Income Tax services through the tax administration framework” has been published alongside the Spring Budget. The document highlights HMRC’s move toward “digital by default” and the necessary legislative and process changes. However, it is crucial for HMRC to consider that not all employers or agents have the infrastructure to support digital submissions. Transitioning from paper to electronic systems or annual processing to payrolling benefits requires careful planning and adequate time.

We can help

As the UK embraces a fully digital tax system and mandates the online submission of P11Ds and P11D(b)s, employers must adapt to this significant change. Understanding the requirements, transitioning to new methods, and ensuring compliance can be challenging for many businesses.

At Mercian Accountants, we are committed to helping employers navigate this transition seamlessly. Our team of experts is ready to provide guidance, support, and tailored solutions to ensure that you meet the new digital submission requirements without any complications.

Don’t hesitate to contact us for assistance with the mandatory digital submission of P11Ds and P11D(b)s. Let us help you stay compliant and embrace the benefits of a modernised tax administration system. Reach out to us today and experience our expert services tailored to your business needs.

About Graham

Accountant specialising in tax, property, and estate planning. A regular speaker at landlord, property Investor, and later life planning events.

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