What you need to know about the P11D deadline
The next P11D deadline will be on 6 July 2024, here is a summary of what you need to know:
All employers who provide taxable benefits to their directors and employees are required to submit an end-of-year report of those benefits to HMRC; this is known as the P11D form. This article will run through what businesses need to understand about P11D forms, and to assist with completing them.
What is a P11D form?
A P11D form gives you an idea of the cash value of any work-related and taxable expenses and taxable benefits that you have received over the tax year. A P11D form is sent to HMRC by UK employers. Because such benefits may increase the amount of tax an employee has to pay, it’s important that they are reported to HMRC.
Also, UK employers have to pay Class 1A National Insurance Contributions for the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form.
Who needs to file a P11D before the P11D deadline?
P11D forms are filed by the employer and not the employee. A copy of relevant information must be provided to the employee by the same date the form is submitted.
At the end of the tax year, an employer will usually need to submit a P11D form to HMRC for every employee they have provided with non-business related expenses or benefits.
If you are paying tax on all employees benefits through your payroll, you will not usually need to submit a P11D form.
What are P11D benefits that need to be reported before the P11D deadline?
P11D benefits include items or services that you (or your employees) receive from the business in addition to your salary. They include:
- Assets paid for by the company and transferred to an employee below market value or at no cost
- Assets placed at your disposal, such as holiday homes
- Cars, vans and/or fuel provided by the company for private use (where vans are provided, incidental private use is allowed)
- Company credit cards where they have been used to fund personal expenditure
- Healthcare, such as private medical or dental insurance
- Living accommodation
- Low or interest-free loans (sometimes referred to as director’s loans)
- Mileage allowances that are more than HMRC’s approved rates
- Mobile phones (unless the contract is in the company’s name)
- Payments made on an employee’s behalf (such as paying personal bills from the company account)
- Professional fees and subscriptions (although subscriptions to certain professional bodies may be exempt)
- Vouchers (for childcare vouchers, this is for any excess over £55 per week)
P11D expense exemptions and qualification
You do not have to report some routine employee expenses to HMRC. These are known as exemptions. These include:
- Business travel
- Phone bills
- Business entertainment expenses
- Uniform and tools for work
For these exemptions to qualify, you must either:
- Pay a flat rate to your employee as part of their earnings, which must be either a ‘benchmark rate’ or a special rate approved by HMRC
- Be paying back the employee’s actual cost for these
When is the P11D deadline?
As this process of gathering all the necessary information can take a while, it’s important that you get started now if you’ve not already.
For the tax year 6th April 2023 – 5th April 2024, the deadline for P11D forms is 6th July 2024. Read below to find out what to do if you miss the P11D deadline.
What happens if I do not complete a P11D?
If you do not complete your P11D before the deadline, you will be charged an automatic penalty. Penalties are payable for non-submission and late submissions. The UK government states that “you will receive a penalty of £100 per 50 employees for each month or part month your P11D(b) is late and be charged penalties and interest if you’re late paying HMRC”.
Furthermore, there are additional penalties for submitting incorrect P11D forms. This is based on a percentage of the potential revenue lost according to the taxpayer’s behaviour and degree of culpability or guilt. This can be up to 100% of the tax owed if missing the deadline is considered a deliberate and concealed action. It can be 70% if it is deliberate but not a concealed action, and 30% if it is considered to be a careless action.
PAYE compliance is becoming more complex, and it is an area that HMRC views as a target for generating additional revenue, both in taxes and, more importantly, penalties.
Consequently, all employers should ensure that their systems and procedures are robust and will stand up to inspection.
Common mistakes include the treatment of pool cars, company vehicles and the provision of benefits for staff. Failure to declare payments made to staff for travel, subsistence and entertaining expenses often occurs where there is no private use, yet a dispensation has not been requested and obtained.
P11D Accountants in Manchester, London and across the UK
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