P11ds- What are they, and do I need to do one?

Even though we may have bid adieu to the 19/20 tax year, there are still a number of important filings that are required before we can forget about it entirely. Of course, there is the 19/20 self assessment return to complete, which is due by the end of January 2021. But, there is also the matter of fi ling your P11d (if required).

What is a P11d, and what do I need to include on it?

A P11d is a form used to report any Benefits in Kind.

What are Benefi ts in Kind?

Most items or services that you or your employees receive from the company in addition to your salary, or any expenses that have been put through the company that are not wholly, exclusively and necessarily for the purpose of the business, will be deemed to be a benefit in kind. Some of the most common examples are:

• Private healthcare
• Gym membership
• Company cars
• Interest free (or low interest) loans (over £10,000)
• Assets provided to an employee with significant personal use
• Non business travel/entertainment expenses

Good news- out of pocket expenses no longer need to be included!

Before April 2016, P11ds had to include any company expenses that had been paid for personally by an employee and then reimbursed to them during that tax year. As you can imagine, for PSCs with directors who may have personally paid for many expenses on behalf of the company and then reimbursed in bulk, this was a rather arduous task! Especially when expenses are often repaid in bulk.

Thankfully, since April 2016, an exemption system has been introduced meaning that the majority of these expenses no longer need to be included.

Do I need to fi le a P11d?

It is the responsibility of the employer for fi ling a P11d, not the employee (although if contracting through your own company, this will fall to you). If you had a PAYE scheme open at all during the tax year in question then you will be required to submit a P11d for the year. Even if there have been no benefits in kind during the year, you will still need to fi le a ‘nil’ P11d.

What will I need to pay?

As a benefit in kind effectively increases the employee’s salary, there may be National Insurance contributions payable on them. This currently stands at a rate of 13.8% and will be payable by the employer. However, what this 13.8% will be charged on depends on the benefit, so it is always advisable to have an accountant assist with the completion of this form. You will also need to bear in mind that because it effectively increases salary, this will need to be included in any tax planning.

When is it due?

Regardless of your company accounting year, all P11d fi lings are dependent on the tax year. So, all P11dsmust be fi led by 6th July following the end of the tax year. Any payment due must reach HMRC by the 22ndJuly (19th July if paying by cheque). The deadline for fi ling the 19/20 P11d is 6th July 2020.

If your P11d is late, you will receive a penalty of £100 per 50 employees for each month (or part month) it is late. If payment is late, you will also receive penalties and late payment interest on that.

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