The deadline for submitting and paying P11Ds is approaching – are you ready?
With the P11ds submission deadline just around the corner, employers are advised to take proactive measures to ensure compliance with HM Revenue and Customs (HMRC) regulations.
What is a P11D?
The P11D form, which employers submit to HMRC every year, lists benefits like private healthcare, company cars, childcare or season ticket loans given to employees.
It’s used to inform HMRC about any taxable perks that need to be included in your self-assessment tax return. Additionally, employers might have to pay National Insurance contributions on these benefits.
What you need to report and pay will depend on the type of expense or benefit you offer, so it is important to check the regulations for each one to ensure compliance.
The P11D form requires some basic details about the employee, like their name, date of birth, and National Insurance number, alongside all the extra benefits they receive on top of their regular salary.
HMRC then uses this information to determine if the employee owes any tax on these additional benefits.
Who is required to file P11Ds?
Employers are responsible for filing Form P11D. Depending on their business structure, you might need to file these forms as a self-employed freelancer and contractor.
You are not required to report expenses and benefits for each employee at the end of the tax year if all their expenses and benefits are payrolled.
At the end of the tax year, don’t forget to also file an online P11D(b) form with HMRC to report any Class 1A National Insurance you owe. This crucial step ensures you stay compliant and on top of your tax obligations.
When is the deadline?
The deadline for submitting P11Ds is 6 July. If you miss this deadline then you will be required to pay a penalty fee. This can be about £100 each month for every 50 people employed.
You should also be careful that the information you fill out is accurate and HMRC can also penalise you for submitting the paperwork wrong.
You should also be aware that HMRC no longer accepts paper P11D filings – all submissions must be made online as of March 2023.
You are also legally obligated to provide your employees with a copy of the expenses and benefits report by 6 July.
Are there any exemptions?
There are some exemptions that you should be aware of. You do not have to report business expenses and benefits such as
- Business travel
- Phone bills
- Business entertainment expenses
- Work tools
- Uniform
To qualify for an exemption, you will need to either pay a flat rate to your employee as part of their earnings, which can be either a benchmark rate or a special (‘bespoke’) rate approved by HMRC, or you will need to reimburse the employee’s actual expenses.
You only need to apply for an exemption if you opt for the bespoke rate option.
By focusing on compliance and transparency, employers can maintain a fair tax system and build trust with both their employees and tax authorities.
For assistance with P11ds contact our team of payroll specialists.