HMRC have a gazillion forms for all different occasions and sometimes it can be hard to know what they are actually all for. Here we’re going to take a look at the P11D form so you can work out whether your business needs to file it.
What is it for?
A P11D is used to report expenses or benefits that you or your employees receive outside of your regular salary. This could be things like private healthcare plans or a company car. These forms allow expenses to be reported to HMRC and can then be used to help when filing your Self Assessment tax return. The form needs to be completed by the employer, not the employee. If you’re a small business, however, you might be both! In that case you have to file it yourself.
If you have multiple employees you need to file a P11D for each person you’ve provided with these expenses or benefits. As your overall salary is effectively increased when you receive these extra benefits this may increase the National Insurance contributions (NICs) due. Not to worry though, these extra NICs aren’t paid by the you as individual, instead the business pays them – winner!
It’s worth also noting that if you pay your employee benefits and expenses through payroll you can calculate and deduct the tax there and then, meaning no P11D form. Just make sure you’re registered before the start of the tax year.
What do you need to include?
So now you’ve decided you need to file this form, yawn. You need to know what exactly gets recorded on it right? Basically any benefits that the employee benefits from that the company pays for need to be logged. This includes:
- Assets provided to an employee that have significant personal use
- Company cars
- Health insurance
- Loans for rail season tickets
- Non-business travel expenses
- Non-business entertainment expenses
- Other loans
- Self Assessment fees paid by the company
Some expenses no longer need to be included on a P11D. Examples of these are:
- Business travel expenses
- Business entertainment expenses
- Credit cards used for business purposes
- Fees and subscriptions
When do you submit it?
The form is completed annually and all businesses have to file by 6th July regardless of when their company year falls. So for the tax year running April 2019 – April 2020 the P11D would need to be filed by 6th July 2020. As it needs to be filed quite soon after the tax year is finished it’s a good idea to keep your records up to date throughout the year so you don’t have to panic at the start of July! Once you’ve completed the form any tax due will need to be paid by 22nd July.
What happens if you miss the deadline?
If you fail to complete the form by 6th July you have a small grace period to put it right – phew! However if you haven’t filed by 19th July the company will be fined. The fine is £100 per month per 50 employees. If November comes along and you still haven’t submitted the form, HMRC will get in touch reminding you to submit. They will also lay out the penalties that you have outstanding, and that’s something you don’t want to have to read! You can also incur fines if you do submit your P11D on time but made errors. If HMRC decide you took reasonable care and made a genuine mistake they may not fine you but they also can issue a fine of up to 100% of the owed tax if they believe you made a deliberate mistake.
What is a P11D(b)?
When you look up P11D on the HMRC site you’ll notice they also mention a P11D(b) form. This form is related to the P11D, as the name would suggest, and again needs to be submitted by employers. The P11D(b) form is a summary of all the individual P11D forms you have filed for your employees. So, when you’ve completed the P11D, all the hard work has already been done.
We can help!
If forms like these are giving you a headache, fear not! We at Mazuma are on hand to help with all your accounting needs. For more information you can get an online quote, call us on 0333 0143369 or pop an email to [email protected].