Thank goodness, the 20/21 tax year, and all of the turmoil that came with it, is over, and I’m sure we’re all glad to see the back of a tax year that, for many, was mainly about keeping their business’ heads above water. But, whilst (hopefully) better times are ahead, there are a few things that need to be taken care of before we can say goodbye to 2020/21 for good. One of them being P11d filing.
What is a P11d?
A P11d is a form used to report any Benefits in Kind.
What are Benefits 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
Do I need to file one?
If you’re an employer with a PAYE scheme open, then chances are, the answer to this one is yes!
It is the responsibility of the employer for filing a P11d, not the employee (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 file a ‘nil’ P11d.
Will I need to pay something?
If an employee has received a benefit in kind, then yes. As a benefit in kind effectively increases the employee’s salary, there will 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, as tax and employees national insurance will be due on the benefit.
When is it due?
Regardless of your company accounting year, all P11d filings cover the standard tax year (6th April – 5th April). All P11ds must be filed by 6th July following the end of the tax year. Any payment due must reach HMRC by the 22nd July (19th July if paying by cheque). The deadline for filing the 20/21 P11d is 6th July 2021. 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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