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Reminder: P11D deadline is approaching next month
Nottingham chartered accounts, Clayton and Brewill, provides guidance on P11Ds to help you feel prepared ahead of the 6 July 2022 deadline.
What is a P11D?
Are you an employer? Do you provide benefits or expenses to your employees (or members of an employee’s family)? If so, your business may have to report these details to HMRC by the 6 July 2022 deadline by completing and submitting forms P11D and P11D(b).
A P11D is a mandatory HRMC form that details expenses and ‘benefits in kind’ provided to company employees and directors.
Who is responsible for submitting P11Ds?
P11Ds are filed by the employer or company and not by the employee.
What needs to be included in a P11D?
Everything that is an employee benefit or ‘perk’ should be included. Examples include:
- Company cars
- Private health insurance
- Vouchers
- Rail season ticket loans
- Assets that have a significant personal use
- Non-business travel expenses
- Non-business entertainment expenses
- Leisure subscriptions
- Relocation expenses
What doesn’t need to be included?
Certain routine, business-related expenses don’t need to be reported to HMRC. These are known as ‘exemptions’.
Exempt expenses and benefits include:
- Business travel costs (and associated subsistence costs)
- Business entertainment expenses
- Phone bills
- Uniform or tools for work
- Fees and subscriptions
- Credit cards used for work
To qualify for an exemption, you must be either:
- paying a flat rate to your employee as part of their earnings – this must be either a benchmark rate or a special (‘bespoke’) rate approved by HMRC
- paying back the employee’s actual costs.
Find out more about applying for exemptions here.
When do I need to submit?
Regardless of your company year end, all P11Ds must be filed by 6 July following the end of the tax year. Class 1A National Insurance contributions by 19 July or 22 July if payment is made electronically.
What are payrolled benefits?
If you collect tax on employee benefits and expenses through your payroll system you do not need to complete a P11D. If you opt to payroll your benefits and expenses you need to inform HMRC prior to the start of the tax year you wish to payroll for. This can be done online. You must add the cash equivalent of the employees’ benefits to their pay and then tax them through your payroll.
If you opt to payroll your benefits and expenses, you will still need to work out the appropriate NICs and complete a P11D(b).
What is a P11D(b)?
A P11D(b) is essentailly a form that declares that you have sent P11D forms to HMRC and is also where you report on the Class 1A NICs due on associated expenses and benefits.
You will be required to submit a P11D(b) form if:
- You’ve submitted any P11D forms
- You’ve paid employee expenses or benefits through your payroll
- HMRC have asked you to – either by sending you a form or email
Penalties apply for not meeting the P11D deadline, so it’s important that you comply.
It’s always better to do these things sooner rather than later to allow sufficient time to gather the relevant information.