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Are you still in love with paper?
By Ashley Whittaker, CEO, GlobalExpense Ltd
It is fast approaching the time that payroll professionals can justifiably loathe… the annual P11D filing deadline on 6th July. But why do we so fear these two-page forms? Is it the £3,000 maximum fine that can be applied for an incorrect return? Maybe it’s the hassle of having to do these forms for most employees, given the miserly £8,000 earnings limit? Or perhaps it’s just the complexity that government likes to add to the tax system!
It will not matter whether you are a large or small employer, P11Ds will manifest themselves as a problem.
For large employers, the concern will not be having the technical resources to calculate complex tax liabilities, but whether the data from which these need to be calculated is complete and how to verify this. For small employers, who are more likely to have a direct knowledge of everything that happens in the business, the problem is the reverse: one of knowing on what and how to calculate tax liabilities for inclusion on the P11D.
If you are wincing at this point, or nodding in recognition of your own problem, then the underlying issue you will have in common with many employers is that you are probably still in love with paper. You are likely to be using manual expense forms or spreadsheets along with manual data-collation processes, and you probably still rely on stand-alone P11D software or a good old-fashioned pen to fill in the P11D form and ‘snail mail’ to send it to the Inland Revenue.
Of course, in the 21st century what the Inland Revenue would like us to do is to prepare the forms using computerised systems that permit internet filing.
Two employers echo this transition to the electronic age. Yvette Lamidey is Group Compensation Manager at WH Smith (23,000 employees), while Jane Hargrave is Finance Administrator at financial software consultants, CHP Consulting (90 employees).
For Yvette, the issue of collecting data from multiple sources (the manual expense system, the company car fleet software, the HR software and the payroll software, and then processing all this using a fifth piece of P11D software) was amplified by the cost of all those software licence fees and pushing a mass of paper back and forth between employees, group payroll and the Inland Revenue!
For Jane, the concern was one of knowing that the proper calculations were being made given the limited resources of a small company to deploy specialist tax resources to perform the work. Jane also used P11D software to help prepare the forms.
Both Yvette and Jane recognised that the answer to this problem was an integrated business process solution utilising software that collected, collated and analysed data to produce a P11D.
Therefore, both companies decided to deploy an automated expense management solution, GlobalExpense, the software element of which not only processes expense claims but also deals with the tax consequences of claims and company cars directly onto an integrated Inland Revenue approved Substitute P11D Form, which can then be submitted electronically by GlobalExpense.
Yvette commented: “The benefits of GlobalExpense are the ability to handle large numbers of employees easily, deploying internet communications to eliminate paper flow and reducing the huge audit effort normally required. The comfort afforded by knowing that the expenses are being used to build a P11D through the year means that much of the drudgery is taken out of the effort and we are able to complete the P11D exercise within days and not the usual couple of months.”
Jane regards the P11D suite as one of the major advantages of deploying GlobalExpense. She said: “The inbuilt P11D has cut a five-day job for myself and the company’s tax advisers down to two hours. Not only is it time-efficient, but I can be sure of the accuracy and completeness of the figures it compiles and easily audit entries back to the P11D entries. It is easy to add non-expense/car-related expenditure such as medical benefits and even a non-accountant can use it with ease. The GlobalExpense software also delivers a much better service support than our old SAGE software, as it is backed up by qualified tax experts available on a helpdesk.”
So the message is simple. Dump the paper and adopt an integrated solution for greater efficiency, accuracy and completeness.
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