A Guide to P11D Reporting to HMRC

P11Ds and other annual payroll reports such as P60s are all required to be issued following the tax year end of 5th April each year. When running a business, the management of the various forms you need to send to HMRC can be quite confusing, so it’s necessary to plan for this and stay on top of your business tax affairs.

What is a P11D?

A P11D form is used to advise HMRC of what is known as ‘benefits in kind’ to employees. These are items, services or features which you or those you employ receive from your business in addition to a salary. Such benefits could cover all manner of different expenses and extras from interest free loans and private healthcare to use of company transport.

You must register and report all these kinds of benefits provided to your staff to HMRC. As benefits can effectively increase the salary of a staff member, there may be National Insurance Contributions to be paid on them. However, these are charged to the business not the individual, hence why the business must report these to HMRC.

When and how to file your P11D

A P11D must be submitted for each employee earning more than £8,500 p.a., where you provide them with a taxable benefit or expense. When it comes to their P11Ds, they should be reported by the 6th July 2019 covering all benefits supplied in the tax year to 5th April 2019. When you are filing the returns, you need to include the total value of any expenses, benefits, or services/features paid during the tax year to each employee.

Benefits supplied to their family and/or their household will be included too. This would mean anything that is paid to their spouse/civil partner, children/spouse’s children, parents or similar dependents.

Additionally, any NIC payments the business must make have to be paid by the 22nd July. Otherwise, you will face late payment penalties.

You do not have to make a filing if there are no taxable benefits to be reported or where any expenses and benefits were already taxed via the payroll system.

Filing your P11Ds with HMRC electronically can usually be done through the majority of business payroll software systems. You should speak with your accountant or a similar advisor if you would like help on handling the filing of your P11Ds. You can find out more about filing and completing your forms via HMRC.

Late filing fees

Another thing to keep in mind here is that you may face a late filing or payment penalty claim. If you do not ensure that HMRC has received their return by the 6th July, you have a grace period up to the 19th July to deliver it in full. Any later means you have to deal with a penalty cost.

The penalty fees as of 2019 are charged for each month that your P11Ds are not filed. These will be a calculation of around £100 for each month/part-month they are not submitted, per each 50 employees' forms.

What constitutes an employee benefit?

There are numerous examples of what might constitute an employee benefit and working this out can be quite tough. We recommend you consider any of the following as a benefit that would come under P11D jurisdiction:

  • Business expenses, such as travel expenses and various other service expenses.

  • Employee benefits, such as health insurance, a company vehicle, or membership fees.

  • Entertainment expenses, such as paying for staff to take a potential client to dinner.

  • Any form of car and/or fuel benefit, including for a company vehicle, or other travel expenses.

  • A beneficial or tax-free loan in some capacity, such as for a train season ticket.

  • The use of a business phone and similar communications equipment and charges.

  • Any self-assessment fees which are paid for by the business.

  • Any personal expenses paid for by the business, e.g. entertainment or travel costs, not recovered from the employee.

While other examples exist too, these are the most common types of benefits to keep in mind as you prepare and set out your benefit plans for your staff. Some expenses and benefits could result in the business paying Class 1A NICs on them.

What should be included as part of your P11D?

There will be a significant amount of data and information that has to be shown on a P11D return. Information that must be included as part of a P11D form are the following details:

  • The name of your employee.

  • The date of birth and gender of your employee.

  • The National Insurance number of your employee.

  • The payroll reference number for you, the employer.

  • Any list prices for the amount of a product/service involved, e.g. a company car.

  • The total cash equivalent value of goods/cars/etc. provided.

You need to file a summary P11D(b) form too, which will include:

  • The total value of all expenses and benefits paid throughout the tax year to employees.

  • The total expenses and benefits that are not subject to Class 1A NICs.

  • The full calculation of any expenses and benefits which are applicable for Class 1A NIC contributions.

  • A complete declaration on the P11D forms in summary.

Please make sure you check out the very useful HMRC toolkit. This is the ideal place to guide you on what you should be including as related to your business.

Getting help with your P11D

At Devonshire Green, we are happy to help you deal with any challenges you might face with filing or handling a P11D or P11D(b) form. If you are unsure of the accuracy or depth of your statements, we can guide you on how to work out what information you need to provide. If you would like assistance with this do not hesitate to contact us for advice. We can provide you with tailored support on any business taxes and HMRC reporting responsibilities.

Nick Bagga