All You Need to Know About Form P11D

As an employer, you are responsible for keeping track of any benefits or expenses paid to your employees that can’t be processed through payroll. This form, known as the P11D, is then sent to HM Revenue and Customs (HMRC) at the end of every tax year in order to calculate your National Insurance contributions. However, it’s important to note that not all benefits in kind are tax-free.

In this article, we’ll outline what you need to know about the P11D form so that you can stay compliant with HMRC regulations.

What is Form P11D?

P11D is a tax form used for listing any benefits or expenses paid to an employee by their employer which can’t be put through payroll.

Keep a record of expenses

If, as an employer, you provide any benefits/expenses (which is not e.g., wages or bonuses) to your employees such as childcare vouchers, private medical insurance, subsidised or free meals etc. you will need to keep a record of these expenses and benefits.

You will then be required to send this information to HMRC at the end of every tax year using a P11D form.

As an employer you have reporting responsibilities for any expenses payments or reimbursements made directly to employees – these are called ‘benefit in kind’ and ‘benefit in cash’ expenses respectively and come under PAYE (Pay As You Earn).

Not all benefits in kind are subject to taxation and National Insurance contributions. These include: Work-related training; and personal protective equipment.

It is important to note however that not all benefits in kind are tax free, so it’s best to find this out before calculating your National Insurance contributions so that you and your employees pay the right amount of tax. For example, if you offer your employees private healthcare cover this isn’t a taxable benefit, but if you pay for their membership at a gym then this is a taxable benefit.

Common situations where an employer needs to file form P11D

The examples below show common situations where an employer would need to file form P11D:

• Where an employee is reimbursed business mileage at a higher rate than HMRC approved allowance rates   
• Where an employee is provided with a company car
• Where an employee incurs subscriber costs for professional body membership 
• Where an employee is given free or subsidised accommodation  
• Where entertaining costs are incurred by employees

However, some benefits in kind are only taxable if they exceed certain thresholds. For example, tax-free amounts are currently available for:

• Company cars;
• Fuel for private cars;
• Van fuel;
• Private medical insurance; and
• Childcare vouchers

What Information is required on a P11D?

Employers must list the following information on a P11D form:

• The name, address and National Insurance number of each employee who received a benefit or expense;
• A description of each benefit or expense; and
• The cash value of each benefit or expense.

If you’re not sure whether a particular benefit or expense is taxable, you can check with HMRC or seek our professional advice here at McKenzies accountants and we can help guide you.

Avoid penalties

Failure to file the annual return (form P11D) on time will result in financial penalties being applied by HMRC; interest will also accrue on any late payments of Class 1A National Insurance Contributions from the original due date.

Deadlines for P11D is usually 6 July following the end of the relevant tax year, although electronic filing may result in earlier deadlines being imposed by HMRC.

Understand your obligations with respect to P11D

In summary, a P11D form is used for listing any benefits or expenses paid to an employee by their employer which can’t be put through payroll. As an employer, it’s important that you understand when you need to use this form – and what the implications are for both you and your employees if you do.

As an employer, it’s important that you understand your obligations with respect to form P11D. By staying compliant with HMRC regulations, you can avoid costly fines and penalties. If you have any questions about how Form P11D applies to your business, don’t hesitate to get in touch with our team of accountants in Oxted who can advise you further.