All you need to know about a P11D form
If you are a UK based company, then it is likely that a P11D form will be a part of your accounting report. Never heard of it? Well, now is an excellent time to expand your knowledge.
What is P11D?
This is a form that accounts for the business/company perks you have offered to your employees. A P11D records the ‘benefits in kind’ – such as company car, insurance, or a holiday – that an employer gives to any of its employees or directors. These perks have a direct monetary value and hence must be taxed.
What type of expenses must be included in the P11D form?
The most common perks included in a P11D are company cars, health insurance, travel and entertainment expenses, childcare, living expenses, interest-free or low-interest loans, etc. You will find the complete list here – the government’s guide.
An employer is responsible for providing a P11D to its employees (unless the tax on the benefits is taken out of the employee’s pay) and to HM Revenue and Customs.
How to file a P11D form
The P11D must be submitted by the 6th of July every year. The grace period is till the 19th of July, and once you cross that you will start getting fined on a monthly basis. The sum is £100 per 50 employees for each month or part month.
Along with the usual P11D form you might be required to fill and file the P11D (b), which is needed if there are any National Insurance Contributions (NIC) to be made from the benefits on P11D, or if you are liable to return any payments on P11D.
Naturally, late filing or not filing the P11D(b) or not paying the NIC also attracts a fine – to the tune of 5% of the sum for the first 30 days.
A P11D usually contains information such as
- Employer’s name
- Their PAYE reference
- Employee’s name
- Employee’s National Insurance number
- Employee’s date of birth
- Employee’s gender
- Details of the provided benefits provided (e.g., cash equivalent/cost)
You must keep detailed records of your payments for at least 3 years as the HMRC might ask you to account for your filings.
What happens if you make a mistake?
If you discover an error in your P11D or P11D(b) forms, then you must instantly make amends. If your error results in you paying less tax or benefiting in any way, the HMRC might impose penalties regardless of your motive.
While correcting your errors, you must
In P11D – mention all the benefits and expenses again and not just the one you need to correct.
In P11D(b) – you must fill in the total amount you need to pay, and not just the amount you go need to pay extra.
For a small business with fewer employees, filing P11D and P11D(b) might be a relatively simple affair. But if you are not confident of getting it right or if your calculations are more complex we would recommend you hire an accountant. By outsourcing to a professional, you can be sure of getting your vital tax documentation right and can work with the peace of mind that comes from knowing that HRMC and you are on the best of terms.
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