What is a P11D and does your business need to prepare P11D’s for your employees or directors.
A P11D is the form used by businesses to report taxable expenses and benefits paid to directors and employees who have not been subject to PAYE. HMRC require your business to notify these expenses and benefits after 5th April each year by 6th July.
These expenses can include items such as:
- Assets paid for by the company and transferred to your employee at no cost or below market value e.g. Personal items paid for using company cheques or credit cards and money not refunded to the company;
- Payments made on behalf of your employee e.g. paying personal bills from the business account or with a business credit card where these are not fully reimbursed;
- Vouchers (in the case of child care vouchers any excess over £55 per week ) or credit cards e.g. using company credit cards to fund personal expenditure;
- Living accommodation – the cash value of the living accommodation is regarded as a benefit;
- Mileage Allowance – amounts in excess of the HMRC approved rates;
- Cars, vans and/or fuel provided by the company and available for private use (in the case of vans incidental private use can be ignored);
- Low or interest-free loans, often referred to as director’s loans ( where no interest is charged);
- Private medical or dental insurance paid for from the company account;
- Assets placed at the employee’s disposal, e.g. motorcycles, holiday homes;
- Professional fees, subscriptions – some subscriptions to professional bodies may be exempt;
- Training – only work-related training is allowable and only if paid for or reimbursed by the company;
- Telephones and mobile phones – unless the contracts are in the business name.
You should check the full HMRC list carefully as there can be penalties for not submitting accurate P11D forms on time. Where benefits exist the business will be liable to Class1a National Insurance calculated at 13.8% of the value of the taxable benefit payable by 19th July 2021.
If you have received a request to complete a P11d(b) which reports the liability of Class 1a to HMRC but have no benefits to report you should either submit a NIL return or complete a declaration.