What is a P11D
A P11D form is a document used by an employer to list any expenses or benefits given to directors or employees. It is submitted to HMRC yearly and includes items or services such as private healthcare or the use of a company car. The P11D form is designed to inform HMRC of any taxable benefits that must be included in your self-assessment tax return, or an adjustment will be made to your tax code to collect the tax through your employment salary.
A P11D form is a document your employer uses to tell HMRC about the employment benefits you’re getting. We’re talking about the little extras you get in addition to your salary, like company cars or private medical cover. Employees are taxed personally on any employment benefits through the P11D(b) form, and the employer may be subject to a Class 1A NIC charge.
The exact rules covering what has to be listed in a P11D are complicated, and change from time to time. Employers need to be very sure to keep the details accurate, though.
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What kind of ‘Benefits in Kind’ are included on a P11D form?
A P11D form is used to report ‘Benefits in Kind’ Company cars or private medical cover are common examples, but there are plenty of others. Not absolutely everything has to be declared, but the list of things that do is pretty long, including things like:
- Cars & fuel provided for employees and directors
- Company cards and rail season tickets
- Provision of living accommodation
- Private medical insurance
- Entertainment and travel expenses that aren’t work-related
- Cheap or interest-free loans (Including Director’s Loans)
- Childcare costs
- Gym memberships
As a general rule of thumb, if it’s not part of the employee’s basic salary then it could count as an employment benefit or benefit-in-kind. In principle, employees need to pay tax on most types of employment benefits they receive. However, HMRC will approve of certain fees and subscriptions, business travel, entertainment and subsistence, and ‘Trivial benefits’ worth up to £50.
As with most HMRC regulations, the exact rules covering what needs to be reported in a P11D will change from time to time. It’s important to keep the details up-to-date and accurate, though.
Who files a P11D form?
A P11D form is filed by employers. It’s worth keeping in mind that, depending on how their businesses are set up, even certain self-employed freelancers and contractors might have to file them. It’s perfectly possible to be both an employer and an employee in the same business, so please be aware of your reporting responsibilities.
The deadline for getting P11D forms filed is the 6th of July, whether you’re filing digitally or on paper. The payment of Class 1A NIC is required by 22nd of July if paying online, and the 19th of July if not paid electronically.
Is there any alternative to a P11D form?
Instead of filing P11D forms for each of the people working for them, employers can opt for the “Payrolling Benefits in Kind” (PBIK) system. Doing it this way means that the value of an employee’s benefits is calculated over the whole year and the tax on them taken out through the company payroll. When an employer does this, they have to let their employees know. The employees then get a statement showing the benefits that have been taxed, which has to be in their hands before the 1st of June after the end of the tax year.
Direct Peak are on hand to help our clients prepare and file your P11D forms, get in contact with us today to discuss the next steps to get your P11D forms filed today!
Direct Peak provides a dedicated business tax accountant, who will prepare your annual accounts and tax returns. They will be on hand to answer any tax queries you have.
Your business tax accountant will ensure that the company is set up in the most tax-efficient way and that you are claiming for all the correct expenses to maximise your earnings.