Now that we are a few weeks into the 2022/23 tax year, it’s time to start getting everything tied up in order to say goodbye to the 2021/22 tax year. And one of the first things you’ll want to see to is your P11d for the year- if, that is, you need to complete one.
What is a P11d?
A P11d is a filing used to report any Benefits in Kind.
So, what are Benefits in Kind?
Generally, any 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:
- Interest free (or below HMRC interest rate) loans (over £10,000)
- Company cars
- Private healthcare
- Gym membership
- 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 most probably 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 the employee/employer need to pay anything?
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 (n.b. this will increase from 13.8% to 15.05% for the 22/23 tax year to account for the Health and Social Care Levy). 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 21/22 P11d is 6th July 2022. 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.
Important Note- Trivial Benefits
As an aside, one thing that doesn’t need to be included on your P11d are Trivial Benefits. Provided certain rules are adhered to, trivial benefits paid to your employees will not need to be declared and therefore not be taxed as a BIK. The rules are that the benefit must not:
- Exceed £50 (not even by 1p or the whole amount becomes taxable). If, for example, you take a number of staff out for a meal, this can be averaged out per head.
- Be cash (although gift vouchers are allowable, provided they can’t be exchanged for cash).
- Be a reward of normal employment duties.
- Be part of any contractual obligation/salary sacrifice scheme.
- If the benefit is paid to a company director, then there is an annual cap of £300 (again, each individual benefit can’t exceed £50).
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