A small but useful administrative change is coming for employers who wind down part‑way through the tax year. The Social Security (Contributions) (Amendment) Regulations 2026 (SI 2026/191) were made on 27 February 2026, laid before Parliament on 2 March, and take effect from 6 April 2026. The measure lets affected employers send a paper Class 1A return when their business ceases trading mid‑year, rather than relying solely on an electronic submission route, according to legislation.gov.uk.

What’s changing in practical terms is narrow but targeted. Regulation 80 of the Social Security (Contributions) Regulations 2001 is amended so that, where regulation 73 applies on cessation of business, the employer may choose to file the Class 1A return either via an approved electronic method or by sending it to HMRC on paper. Regulation 73 governs what must happen to Class 1A reporting and payment at cessation; regulation 80 lists what the return must contain. (gov.uk)

For SMEs closing down, this paper fallback matters. Payroll software is often switched off early, agents may be stood down, and credentials for online services can be hard to retrieve. Allowing a posted P11D(b) removes a small but recurring blocker at a point when cash, people and attention are all stretched.

This is not a free‑for‑all for paper. The concession only bites when the business ceases mid‑year under regulation 73. If you’re still trading, HMRC expects the Class 1A return to be made by an approved electronic method, as before. The underlying liability, deadlines and penalty framework are unchanged by this tweak; regulation 70 and 71 continue to set the payment mechanics and due dates, and penalties for failures remain in play. (gov.uk)

Here’s a real‑world example. A Manchester café decides to close on 30 September 2026. It provided private medical cover to staff earlier in the year, so Class 1A National Insurance will arise on that benefit. Under the new rule, the owner can complete and post a P11D(b) to HMRC on cessation rather than scramble to restore software access purely to file the return online. That reduces the risk of missing a deadline because digital routes are no longer available.

The change lands during a wider shift in how benefits are reported. HMRC’s February 2026 Employer Bulletin confirms that mandatory payrolling for most benefits in kind starts in the 2027/28 tax year, with accommodation and beneficial loans moving later. For 2026/27, the familiar P11D and P11D(b) cycle still runs, so this paper option will be relevant for any mid‑year closures in the coming year. (gov.uk)

For context, HMRC’s CWG5 2026 guidance reiterates the standard timetable: make good by 6 July to reduce Class 1A where applicable, file the Class 1A return by 6 July, and pay by 19/22 July. The amendment does not alter those rules; it simply introduces a paper route at cessation for the return itself. (gov.uk)

What should owners and finance leads do now? If you expect to cease trading during 2026/27, list any benefits provided this year, work out indicative Class 1A exposure, and keep evidence of cessation dates. Ask your agent where to obtain the correct paper P11D(b) and how HMRC wants it completed on cessation. If you’ve already switched off payroll software, ring‑fence time to reconcile benefits values from invoices and provider statements so the return is accurate first time.

The scope is deliberately tight. This is not a backdoor to paper filing for everyone, and it does not change who pays Class 1A, what counts as a benefit in kind, or the penalty position. HMRC’s National Insurance Manual remains the reference point for what regulations 70 to 82 cover, while updated forms and any detailed process notes are likely to be flagged through GOV.UK. (gov.uk)

A Tax Information and Impact Note (TIIN) is due to be published on GOV.UK. Keep an eye on HMRC’s TIIN collection for any operational clarifications, including where to obtain the paper form and how HMRC wants it returned. For smaller employers with limited systems or those going through insolvency, even a one‑page process note could save time and interest. (gov.uk)