What is a P11D form?
A P11D form copy is issued by UK employers to employees mentioning any ‘benefits in kind’ they receive and is sent to the HMRC for compliance purposes.
These benefits in kind are services or items that are not included in salaries or wages and may include benefits like company cars, interest-free loans, or discounts on company products and other such incentives.
What are some examples of benefits in kind?
Some popular benefits in kind include company cars, motorcycles, fuel allowances, credit card expenses, private medical insurance, accommodation, beneficial loans, childcare costs and utility expenses.
Please note that by no means is this an exhaustive list and you should always consult with your accountant whether a certain benefit is covered under benefits in kind.
Are there any exemptions for some business expenses?
Yes. A majority of business expenses incurred personally by company employees do not need to be recorded in a P11D form.
These expenses include business travel, business entertainment, fees and subscriptions and credit cards used for business purposes.
Are employers required to issue a copy of P11D form?
While employers are not required to issue a copy of P11D form, nevertheless, they must inform employees about the worth of the benefits. It may be important to mention that you may not receive a P11D if your employer deducts the tax you owe on your benefits from your pay. However, your employer will still explain to you how this works by writing to you.
What should employees do if they lose their P11D?
Usually, employees can request a replacement P11D from their employer. If they are unable to entertain the request, they can contact HMRC.
When do employers submit an end-of-year report to HMRC?
Employers are expected to submit an end-of-year report to HMRC for each employee provided with these expenses or benefits in the tax year ending 5 April. They need to submit their report before 6 July.
Does P11D affect the tax an employee pays?
Typically, employees end up paying more tax out of their payroll each month as the taxable benefits or expenses can be offset against their PAYE tax code. However, if employees believe that they might be paying either less or more tax than expected, they should immediately inform the HMRC. Also, it is always recommended to check the coding notice sent by HMRC which lays out the breakdown of all tax that is being paid.
Are there any penalties for late filing?
Yes. While you are unlikely to incur penalties for missing the 6 July deadline immediately as you get around two weeks to make things right. However, if your P11D is not received by HMRC by 19 July, your company (not you individually) will be penalized with fines of £100 per month (or part month) per 50 employees. Additionally, if you do not file by November, HMRC will send a reminder along with the accrued penalties until then.
What happens if your P11D is incorrect?
In case your P11D is incorrect, you may end facing fines – but only if the HMRC believes that you deserve them. On the other hand, if you took reasonable care before filing and you made a genuine mistake, HMRC may not charge any fines. Nevertheless, HMRC may charge you penalties ranging from 30% – 100% of your tax owed if it believes you were negligent, intentionally misled them or tried to hide your actual obligations.
How can employers submit their end-of-year report online?
Employers can use the following online methods to submit their end-of-year report online
- Commercial Payroll Software
- HMRC’s PAYE Online Service (for up to 500 employees)
- HMRC’s Online End of Year Expenses and Benefits Service (this includes forms P11D and P11D(b) and can be used with existing XML data files)
Please note that you need Adobe Reader to complete this form which is completely free. You can download the latest version of Adobe here.
Is it possible to submit the end-of-year report by post?
Yes, it is. However, note that you should only report by post if you are unable to use any of the above online methods. Employers can use forms P11D and P11D (b) (which need to be downloaded and completed) to submit their end-of year report by post. It may also be pertinent to mention that you are required to complete the form P11D (b) before you can print it. Lastly, you are advised to gather all your information together before you start to fill this this form as you cannot save an incomplete form.
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