P11Ds – Return of Benefits and Reimbursed expenses
Forms P11D are prepared annually as an additional payroll form for each employee in receipt of Benefits or Expenses. They are submitted separately by internet or paper and have a filing deadline of 6 July.
A copy of the P11D must also be given to each employee in receipt of Benefits or Expenses by 6 July.
HMRC can charge penalties of £100 per 50 employees per month for late submissions.
Based on the benefits they disclose Class 1A at 13.8% is charged to the employer only and is payable on or before 22 July unless payment is made by cheque then it’s the 19 July.
P11Ds are the basis for the building up of the employee’s tax code.
It is important to keep records of all the benefits and expenses provided to employees. The HMRC may ask to see the records and back up documentation such as invoices at the end of the tax year. The records must be kept for three years.
For the year ended 5 April 2017 (2016/17) there have been some changes made to the rules concerning P11Ds. They are as follows:
- Benefits can now be payrolled – to do so the HMRC must be notified prior to the start of the tax year, so for 17/18 in March 2017.
The advantage of payrolling benefits is that the employee will suffer the correct amount of tax on a weekly/monthly basis.
Examples of Benefits – See attached sheet.
A form P11D is not required for any employees paying tax on their benefits through the payroll.
A form P11D(B) however is required annually to report Class 1A, as an employer.
- There is no longer a requirement to report reimbursed expenses such as travel, phone bills, business entertainment and uniform and tools on a P11D for work as long as the full cost of the expenses is reimbursed.
The employee must keep expenses claims together with receipts and invoices to submit to the employer for checking in order to ensure that they are legitimate expenses.
It is important to meet this bookkeeping requirement, as this will elevate the compliance requirements of the smaller company – ie one or two director/shareholder companies.
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Expenses and Benefits: A to Z
Assets bought, sold or given
Assets made available to an employee
Car parking charges
Cash sum payments to employees
Company cars and fuel
Company vans and fuel
Compensation for injuries at work
Computers loaned to an employee
Counselling for employees
Credit, debit and charge cards
Incidental overnight expenses
Income tax paid on directors’ behalf
Items for disabled employees
Meals for employees and directors
Medical or dental treatment and insurance
Private use of heavy goods vehicles
Scholarship for an employee’s family member
School fees for an employee’s child
Social functions and parties
Sporting or recreational facilities
Subscriptions and professional fees
Bikes for employees
Business travel mileage for employees’ own vehicles
Employee liabilities and indemnity insurance
Employee suggestion schemes
Food and groceries
Loans provided to employees
Office and workshop equipment and supplies
Offshore transfers in the oil and gas industries
Retirement benefit schemes
Works bus services