Earlier this year HMRC met with a number of stakeholders, including Chartered Accountants Ireland, to discuss plans to introduce a new mandatory P87 form (claims for income tax relief for employment expenses). Agent Update 94, published earlier this month, also confirmed the new regulations and the timing for implementing the new form. The new P87 form is now live on GOV.UK but is not mandatory until 7 May 2022. Any P87 applications received from 7 May must be made on the new form or they will be rejected.
HMRC has introduced the new form to ensure a “consistent standard of P87s coming into HMRC” as there are currently a number of ways that income tax relief for employment expenses can be claimed. Standardisation will also help to start automating the processing of P87s.
According to HMRC, to create a more efficient process and for automation to work, all forms need to be the same so that HMRC’s systems can scan them and identify the necessary information. This is also designed to help HMRC pick up and process any repayments and coding adjustments more quickly.
HMRC has also taken into consideration feedback from agents hence the form can now be used for multiple tax years and employments. The guidance notes are now separate from the form itself.
The new P87 form also includes a space to complete a nomination. According to HMRC, this is the fastest way it can process claims and make payments to the nominated payee. Assignments will continue to be processed but these need significant manual intervention, which means they will take longer. The quickest way to get any repayment due is to use the nomination within the form.
The approved HMRC Commissioners Direction will be published confirming this change when it is available on 6 May.
HMRC has developed the new form P87 using “hyperscience” robotics and we understand that HMRC also intends to use this process for some R40 forms (interest on Payment Protection Insurance refunds) with the potential for the process to also be used for other forms in future.
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