What is a P11D?
A P11D is a document used by an employer to report to an individual employee or director any expenses or benefits given to them in a given tax year. This will then be submitted to HMRC to inform them of any taxable benefits provided, so they can update the tax code or self assessment record of each individual. Most employees/directors will then receive an adjusted tax code so they pay the correct amount of tax in the tax year. There may also be National Insurance contributions to be paid on them by the employer, this is called class 1A national insurance and is reported on a P11D(b) form, which summarises the total benefits provided and the national insurance charged.
What is a taxable benefit or expense?
Generally a benefit is something extra on top of an employee’s salary that is not cash. The most common benefits being company cars and private medical insurance, and directors loan interest for directors. Common expenses are travel and entertainment that isn’t work related. To find a full list of benefits and expenses that may need to be reported to HMRC please follow https://www.gov.uk/expenses-and-benefits-a-to-z.
When does a P11D have to be filed?
The deadline for filing P11D and P11D(b) forms is the 6th of July following the end of the tax year. Penalties for late filing start at £100 per 50 employees per month so they can soon add up.
Payrolling benefits in kind?
There is another way of handling benefits in kind instead of filing P11Ds each year you can opt to payroll the benefits. Doing it this way means that the tax is calculated on a real time basis and paid across with the company PAYE bill each month or quarter. However, in order to register for payrolling benefits, you must apply in the tax year prior to when you wish to start payrolling benefits and a P11D(b) will still need to be filed with HMRC following the tax year.
Do you need help with reporting employee benefits? Give us a call on 01484 690730.