ECH21041 - Penalties: Class 1A NIC Incorrect Form P11D(b)

Regulation 81(1) Social Security (Contributions) Regulations 2001

This provides a NICs geared penalty for fraudulently or negligently submitting an incorrect form P11D(b) (ECH21050).

The maximum penalty before abatements is an amount equal to the difference between the Class 1A NICs returned and the Class 1A NICs which should have been returned.

For example, a form P11D(b) which returns £5,000

• where it is later demonstrated that
• £9,000 of Class 1A NICs should have been returned
• attracts a maximum penalty before abatements of £4,000

Note that these penalties are based on 100% of the tax/NICs difference or the tax/NICs underpaid and are subject to Article 6 of ECHR (ECH8026).

You should

• provide HRA advice and
• issue factsheets EC/FS3 & EC/FS4

to the employer at the earliest opportunity (ECH8027).

If it has been necessary to issue formal decisions consideration should be given to issuing penalties (ECH21135) at the same time.

See Section 8 NICs Decision ECH22091.