What are your P11D responsibilities – and how can you make those responsibilities less of a burden? Here’s our guide.
What is a P11D?
A P11D is a form which details the benefits in kind provided to your employees. Benefits in kind are things your employees receive in addition to (or instead of) a portion of their salary, such as company cars, private health insurance, season ticket loans etc.
Benefits in kind (BIKs) are offset against employee tax codes, so the more BIKs your employees enjoy, the more tax they will pay. The P11D is how you tell HMRC about those benefits.
How many P11D forms do I need to complete?
One for every employee in receipt of BIKs. But see ‘payrolling’ below.
When do I need to file a P11D?
Your P11Ds need to be submitted by 6 July each year, giving you three months between the end of the financial year and the submission date.
What do I need to report?
In theory you need to report all BIKs received by your employees, but there are some exceptions. You should report BIKs such as:
- Private health insurance
- Company cars
- Certain assets made available to employees
- Club memberships
- Non-business travel expenses
PAYE Settlement Agreements
You can roll up “minor, irregular or impracticable” benefits in a single payment known as a PAYE Settlement Agreement. If you do, you won’t have to declare them on your P11Ds.
What’s minor, irregular or impracticable?
The categories are quite broad but include small gifts and vouchers or staff entertainment (minor), the cost of attending overseas conferences (irregular) or shared cars (impracticable).
Find out more about what’s included in a PAYE settlement agreement.
If you’re paying back business expenses incurred by company employees you don’t need to include them on the P11D. Professional fees, business travel and business entertainment are all classed as expenses exempt from the P11D.
Are there alternatives to using a P11D?
Yes. You can choose to add the cash equivalent of your employees’ benefits to their pay and then tax them as normal through your payroll. This is known as ‘payrolling’. This gives certainty to your employees, who don’t find their tax codes amended at the start of each year. And it makes life easier for you as you avoid the administrative burden of completing a bundle of P11Ds.
To pay via payroll, you need to register before the start of the new tax year.
What happens if I file my P11D late?
P11D penalties don’t usually kick in until a couple of weeks after the 6 July filing date, so you do have a short period of grace to sort things out. If you miss that, however, you’ll face a fine of £100 per month (or part month) for every 50 employees (or part thereof).
You’ll also face penalties if you make mistakes on your P11D (which is just one of the reasons why it can help to have someone else do it for you). Where HMRC believes your mistake is genuine, they can waive fines entirely. Where they believe you acted carelessly or deliberately the fine could be up to 100% of the tax owed.
What is a P11D(b)?
A form P11D(b) enables HMRC to asses any Class 1A National Insurance contributions you owe on the benefits you have given.
You’ll need to complete a P11D(b) even if you have registered for payrolling – because whilst payrolling does deduct tax on benefits at source it doesn’t do the same for NI.
Will you do my P11Ds?
Yes. Just ask.
How much will you charge to do my P11Ds?
We charge £25 per P11D.
Will you do my payrolling?
Yes. If you’re already outsourcing your payroll to us talk to us about adding payrolling to your service. If you’re not already a client, talk to us about the many ways in which we can save you time and money – including payrolling.
Talk to us now.