P11D forms at a glance
P11D forms are required for directors and employees who receive benefits in kind. They have their own rules and requirements and have to be prepared for each tax year end, then submitted by 6th July of the same tax year. Although for a payroll expert, P11Ds aren’t particularly complicated, if you deal with payroll yourself, they are definitely something you should know about. Why? Because HMRC penalties for getting this part of your payroll wrong can be particularly punitive.
What benefits are included in a P11D?
P11Ds are required when expenses have been paid or benefits made to employees or directors who have earned £8,500 or more in the previous year OR to each full-time working director who has no material interest in the company, director of a charity or non-profit organisation.
What benefits are included in a P11D?
- Assets transferred. *
- Assets placed at the employee’s disposal.
- Credit card expenses payments.
- Company carsMileage and fuel.
- Private use of commercial vehicles.Using a private car for work.
- Using home telephones for work.
- Use of mobile phone and reimbursements. *
- Private medical insurance.Subscriptions and professional fees. *
- Non credit card expenses payments.
- Living accommodation. *
- Interest-free and low interest loans.
- Working from home.
- Employer supported childcare. *
- Other benefits or expenses such as childcare costs, spouse or partner expenses on business trips, late night taxis and so on.
P11D rules, regulations, deadlines and penalties for getting them wrong
Like most things payroll, P11Ds have their own rules and regulations. And like many other aspects of payroll, they are forever changing. For example, in the next couple of years, the £8,500 threshold will be abolished for the majority of employees and directors. Also, the ability to report company car changes online will be introduced. And finally, dealing with P11Ds through payroll is on the horizon. These things should make dealing with P11Ds easier, but without being completely up to date with the changes you could easily fall foul of the rules.
Add to all this, the fact the tight deadline of 6 July following the end of the tax year, and you soon see that there’s more to P11Ds than a quick calculation. So what happens if you get it wrong? It’s simple; if you don’t submit your P11D forms by 19th July, you will start to face penalties.
If you’re worried about dealing with P11Ds, you don’t need to go it alone.
Get help now
If you’re reading this and are worrying about your situation, why not download our checklist to help you?
Or, if you’d prefer not to take the responsibility for P11D forms in-house, you can avail of our P11D Service to relieve you of the worry of possible penalties. Our P11D Service gives you real peace of mind and covers:
- Preparing, then submitting P11D and P11D(b) forms to HMRC.
- Calculating Class 1A NI.
- Advice on payment dates.
- Preparing Section 336 claims where there are reportable items with no net benefit in kind.
- Advice on what needs to be included in P11Ds.
- Help with HMRC P11D queries.
- Advice on Class 1 National Insurance related to benefits in kind.
- Preparing PSA1 for employers who take on all tax and national insurance on certain benefits in kind, as well as calculating the amounts due to HMRC.
*£8,500 threshold doesn’t apply
**If benefits are provided to more than one person and it is deemed to be impractical to calculate the cost per person, an average of £50 should be assumed.
***Ministers of religion will remain exempt from income tax on some benefits and expenses where they earn less than £8,500 a year, but benefits that are deemed to be taxable will need to be reported on P11D due to the abolishment of P9D. In a situation where a care and support employee is in receipt of board and lodging via their employment, so long as it is of a “reasonable scale” will also be exempt from income tax. A new exemption from NICs will also apply, no matter whether the worker is employed directly or via an agency.