Are you providing benefits to your employees in addition to their salary? If so, make sure you file your P11D forms by the 6th July
If you are an employer and you provide expenses or benefits to employees or directors, you almost certainly need to tell HM Revenue and Customs (HMRC) and pay tax and National Insurance on them.
Examples of expenses and benefits include:
• company cars
• health insurance
• travel and entertainment expenses
Reporting and paying
At the end of the tax year you will usually need to submit form P11D to HM Revenue and Customs (HMRC) for each employee you have provided expenses or benefits to. You will also need to submit a separate form called P11D(b) if:
• you have submitted any P11D forms
• you have paid employees’ expenses or benefits through your payroll
• HMRC have asked you to; either by sending you a form or an email
Your P11D(b) tells HMRC how much Class 1A National Insurance you need to pay on all the expenses and benefits you have provided. Where no National Insurance is payable such as in the case of certain expenses, you can complete a declaration for submission to HMRC.
Paying tax on benefits through your payroll
You can deduct and pay tax on most employee expenses through your payroll as long as you’ve registered with HMRC before the start of the tax year (6 April). But whilst you may not need to submit a P11D form for an employee if you are paying tax on all their benefits through your payroll, it is good practice to do so, especially if new benefits have been accrued by employees during the year and there has been a delay in reporting these to HMRC.
What should I be reporting on my P11D?
Each expense or benefit is calculated in a different way and you should consult the HMRC website or speak to us as benefits such as cars can be particularly complex to calculate and prone to change. For ‘minor’ expenses or benefits, you might also be able to make a one-off payment, known as a PAYE settlement agreement, but it is best to check first.
Need to know more?
Email our Head of Accounts, Janine Naismith – firstname.lastname@example.org