What is a P11D Form?
In the United Kingdom, a P11D form is a tax form that employers use to report details of certain employee benefits and expenses provided during the tax year. It is used to ensure that employees pay the correct income tax and National Insurance contributions (NICs) on these benefits and expenses. Many employers provide their employees with benefits or expenses not included in their salary, including company cars and private medical cover. These can impact what tax you pay through your PAYE code, so reporting them correctly is essential.
However, not all work benefits are subject to taxation, and some qualify for specific exemptions. It’s, therefore, crucial for employers to understand the rules and regulations when filing P11D forms.
What is a P11D Form?
A P11D form is a document employers use to report the value of taxable benefits and expenses they provide their employees with over the course of a tax year. This is a requirement set by HM Revenue and Customs (HMRC) to comply with the relevant tax regulations.
Here are key points about the P11D form:
- Employer’s Responsibility: Employers must complete and submit a P11D form to HM Revenue & Customs (HMRC) for each employee who has received taxable benefits or expenses during the tax year. Employers must also provide a copy of the P11D form to the employee.
- Taxable Benefits and Expenses: The P11D form covers various benefits and expenses, including company cars, private medical insurance, interest-free or low-interest loans, and other perks provided to employees.
- Cash Equivalents: For each benefit or expense reported on the P11D, employers must calculate a “cash equivalent” value. This represents the taxable value of the benefit or expense and is used to calculate the employee’s tax liability.
- Taxable Amount: The cash equivalent value of the benefit is added to the employee’s overall income for the tax year and income tax and NICs are calculated based on the employee’s total taxable income.
- Submission Deadline: Employers must submit P11D forms to HMRC by July 6th, following the end of the tax year (which runs from April 6th to April 5th of the following year). Penalties may apply for late or incorrect submissions.
- Class 1A NICs: Besides income tax, employers are generally required to pay Class 1A National Insurance contributions on the value of taxable benefits and expenses provided to employees. This is reported and paid separately from the P11D form.
- Exemptions and Deductions: Some benefits and expenses may be exempt from taxation or subject to special rules. Employers should consult HMRC guidance to determine which items should be reported on the P11D.
- Employee Declarations: Employees may need to provide certain declarations or information to their employers to assist in accurately completing the P11D form.
- Employee Copies: Employers must provide employees with a copy of their P11D form and a separate “P11D(b)” form summarising the Class 1A NICs the employer pays. These copies are typically provided by July 6th.
Employers must understand what benefits are taxable and which fall under specific exceptions to complete their P11D forms accurately. Some examples of exempt work benefits include employee discounts, certain types of childcare assistance and up to £500 worth of gift cards or vouchers per year.
The HMRC website offers comprehensive information and guidance on P11D forms and how to submit them. In addition, it is possible to seek guidance from professional accountants or payroll providers specialising in tax compliance matters. This is often the best option for employers as they can ensure that all required information is provided and submitted correctly.
What Details Does the P11D Require?
- The provision of vans and van fuel
- Payments for private medical treatment or insurance
- Assets transferred to employees
- Vouchers and credit cards provided to employees and directors
- Details of any low or interest free loans
- The provision of living accommodation
- Cars and fuel provided for employees and directors
Who is Required to Complete a P11D Form?
Employers must file P11D forms for any employees or directors who receive benefits in kind (BiKs) during the tax year alongside their salary. BiKs are goods and services that a company provides to their staff for free or at a discounted rate, including company cars, private medical insurance, interest-free loans, and reimbursements for work-related expenses.
- P11D forms are typically completed for both employees and directors of a company. This includes anyone on the company’s payroll who has received taxable benefits and expenses.
- Employers must complete a P11D form for any employee or director who has received taxable benefits and expenses. These can include, but are not limited to, company cars, private medical insurance, interest-free or low-interest loans, and various other non-cash perks or expenses paid on behalf of the employee.
- Not all benefits and expenses are taxable, and some specific thresholds and exemptions apply. Some benefits may be exempt from taxation or subject to special rules. Employers should consult HM Revenue & Customs (HMRC) guidance to determine which items should be reported on the P11D.
- In addition to completing the P11D form, employers are generally required to pay Class 1A National Insurance contributions (NICs) on the value of taxable benefits and expenses provided to employees. The Class 1A NICs are calculated separately and reported and paid to HMRC.
- Employers must submit P11D forms to HMRC by July 6th, following the end of the tax year (which runs from April 6th to April 5th of the following year). Penalties may apply for late or incorrect submissions.
- Employers must also provide employees and directors with a copy of their P11D form and a separate “P11D(b)” form summarising the Class 1A NICs the employer pays. These copies are typically provided by July 6th.
The P11D form includes details of all these items and the cash equivalent value that is taxable for each of them. As such, employers must follow HMRC guidelines when completing their P11D forms to ensure compliance with tax regulations.
If a business doesn’t file its P11D form correctly and on time, it could face penalties from the government. This is why it’s important to double-check all information before submitting. In addition, using payroll software can help reduce errors and speed up the process. It’s also good to seek professional advice when filing P11D forms.
How Do I Complete a P11D Form?
Many businesses provide their directors and employees various work-related benefits, such as company cars, private medical insurance, interest-free loans, and travel expenses. However, these ‘benefits in kind’ are taxable and must be reported to HMRC on a P11D form.
The information on a P11D form must be accurate and detailed, including the cash equivalent value of each benefit or expense. As such, employers must familiarise themselves with HMRC’s guidance and seek assistance from a tax professional with experience handling P11D submissions.
Following these tips makes it possible to complete and submit a P11D form by the July 6th deadline. This will help avoid penalties and ensure that HM Revenue & Customs is made aware of any taxable benefits or expenses provided to a director or employee. This information will calculate the appropriate PAYE tax code and ensure that all relevant taxes are paid appropriately.
How Do I Submit a P11D Form?
An employer is responsible for completing and submitting P11D forms for each employee who receives taxable benefits-in-kind or expenses. This helps HMRC review individual tax affairs, ensuring that each benefit’s correct value is being reported and that regular tax deductions are closer to expected liability.
P11D forms must be filed by July 6th, following the end of the tax year. Filing late or incorrectly may result in penalties from HMRC. To minimise issues, employers should familiarise themselves with HM Revenue & Customs guidelines on P11D forms and seek assistance from professional accountants or payroll providers specialising in tax compliance.
Using software that quickly identifies and reports qualifying expenses makes P11D submissions much more manageable for most organisations. This can also help prevent costly mistakes, such as overlooking expenses exempt from tax and NI, like business travel or uniforms. It is also important to remember that employees must be provided copies of their P11D form, as they will need this to update their Self-Assessment tax return if necessary.
P11D Form – Other useful links from our Knowledge Centre:
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