P11D’S

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 must keep a record of these together with any other expenses and benefits in kind that you give as this information has to be sent to HMRC at the end of every tax year using a P11D form.

HMRC will then use all of this information to work out your employer’s National Insurance contributions.

It is important to note however that some, but not all benefits in kind are tax free, so it’s best to find this out before, so that you and your employees pay the right amount of tax and National Insurance.

Instead of using the P11D form, you might like to consider registering with HMRC (before the start of the tax year) to pay tax and employee benefits through your payroll but to do this, you would need to calculate the cash equivalent of each benefit and be aware that not all employee benefits can be payrolled.

The advantage of going through payroll is that you wouldn’t have to submit a P11D for each employee although you’ll still have to submit the P11D(b) form for the Class 1A NI contributions.

Talk to us about the options and what would be best for you. You can also find out more about which benefits are and which aren’t considered a tax-free benefit.