Optimising your payroll efficiency: A guide to filing P11D forms
As a business owner, offering ‘benefits in kind’ is a brilliant strategy to attract and retain the best talent in your company.
However, it’s crucial to remember that these benefits are taxable, and correct reporting to HM Revenue & Customs (HRMC) is paramount to avoid expensive penalties.
P11D forms: A crucial part of your payroll process
The P11D form is a document devised to inform HMRC of any taxable benefits provided to directors or employees in your company.
It covers elements like expense payments, company cars, and private health insurance. These forms are typically submitted annually to HRMC as part of your company’s payroll obligations.
The submission deadline for your P11D form is 6 July for the previous tax year, and any associated taxes must be paid by 22 July.
Key data required in a P11D form
In addition to standard employee information such as names, birth dates, and National Insurance numbers, a P11D form requires detailed reporting on:
- Expenses
- Loans
- Company Cars
- Private medical treatment or insurance
However, bear in mind that when you process expenses and benefits through your payroll, you won’t need a P11D form.
Potential penalties for late or incorrect P11D form submission
As a business owner, you need to be aware that late submission of a P11D form can result in a fine of £100 per 50 employees for each month or part month that the form is overdue. Additional penalties may also be incurred if the delay continues past the 6 July deadline.
Furthermore, forms filled out inaccurately may lead to penalties, especially when the errors appear to ‘conceal’ information rather than resulting from a simple oversight. This makes it crucial to verify all data thoroughly before filing.
The future of P11D forms: Making Tax Digital (MTD) programme
With the Government’s Making Tax Digital (MTD) initiative, from the 2023/24 tax year onwards, all P11D forms must be submitted and amended exclusively online. That means your P11D form for this period must be filed by 6 July 2023, online.
You can submit P11D forms via HMRC’s PAYE online service, their online End of Year Expenses and Benefits service, or through commercial payroll software.
Need assistance with managing employee expenses and benefits or filing a P11D form? Reach out to us today, and let’s optimise your payroll process.