What is a P11d?
A P11d is a form that needs submitted to HMRC annually every year by 6th July. It details the information and value of the benefits received by each employee so that HMRC can calculate the taxes due.
Your business generally only needs to fill in a P11D if employees have received benefits during the year.
If this does not apply to you, then you shouldn't need to fill out a P11D. However, HMRC will issue fines for late or incorrect filing so it is best to be sure before opting against filing anything. You can however, opt to file a nil return, if you want to ensure that something has been submitted to HMRC.
Do I need to submit a P11d?
If any directors or employees receive benefits or perks from your business then by law, you need to complete and submit a P11d to HMRC for each employee.
Some of the usual benefits that we see employees receiving are
- Company cars/vans
- Private medical and dental insurance
- Gym membership
- Directors loans
- Business entertainment expenses
HMRC have a full list of benefits that may need to be reported on a P11d form here.
Are all benefits taxable?
No, not all benefits are taxable. Some benefits such as a company mobile phone and some trivial benefits are not taxable. A lot of whether a benefit is taxable or not will depend on the circumstances and how the benefit are treated within your business.
How much tax do you have to pay on benefits?
The rate employees will pay on their benefits will depend on what level of income they have. The benefits are taxed within the normal tax bands so could currently be taxable at 20%, 40% or 45%.
Your business will also need to pay tax on some of the benefits provided in the form of Class 1A National Insurance. This is charged at 13.8% of the total value of benefits so if the total value is £1,000, the Class 1A NIC would be £138.
This Class 1A NIC does form part of the employment package paid to employees so is an allowable expense within your financial accounts.
When do I need to pay the tax due?
Any Class 1A National Insurance due needs to be paid over to HMRC before 19th July each year or you risk incurring penalties and interest on the overdue payment.