Whilst the 2022/23 tax year may have recently ended, the filing obligations for it continue, not only with personal tax returns for the year, but also with the filing of 2022/23 P11ds. But, what are P11ds, and do you need to complete one?
What is a P11d?
A P11d is a report used to declare any Benefits in Kind.
What are Benefits in Kind and do I need to file a P11d?
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
If you’re an employer with a PAYE scheme open, then you most likely will need to file a P11d. 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 14.53% (thank the introduction and the reversal part way through the tax year of the Health and Social Care Levy for that odd percentage! Going forward, the rate will return to 13.8% from 23/24). However, what this 14.53% 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 22/23 P11d is 6th July 2023. 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.
Do I need to include Trivial Benefits on the return?
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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