A P11D is the form used to tell HMRC about any benefits or expenses, so they can work out how much tax is due.
Who should complete a P11D?
If you’re an employer who gives out staff perks such as gym memberships, you probably need to complete a P11D. Basically, every UK employer who provides expenses or benefits to employees and directors should complete a P11D.
What sort of things should I include on a P11D?
The P11D is used to tell HMRC about the cash value of any expenses and benefits that don’t go through payroll. Essentially, anything the company pays or buys for the direct benefit of an employee, should be included.
Other examples might include the cost of living accommodation, private medical insurance, or gym memberships. Don’t worry if it all sounds a bit confusing! A good accountant can help make sense of it all. You can also read the HMRC guidance about what you need to include on your P11D form.
Do reimbursed expenses need to go on a P11D?
Because it’s only for benefits in kind, an employee’s regular salary doesn’t need to go down on the P11D form. Payments which are to reimburse expenses don’t need to be declared on it, either. So, for example, if an employee goes to an off-site client meeting and you reimburse their parking costs, this doesn’t count as a benefit in kind.
Sticking with the travel theme, giving an employee an interest free loan to buy a travel season ticket should go down on the P11D. This is because it’s a payment incurred by the business, for the direct benefit of the employee.
How do I submit a P11D to report on expenses and benefits?
You’ll need to complete a P11D for each director and worker who receives a ‘benefit in kind’ from you. As an employer you’ll have a PAYE account, and you can use this to complete and submit the P11D forms.
Why is a P11D required?
Benefits in kind effectively increase the value of what the employee is earning from their employer. Unlike their normal salary, though, benefits haven’t been subject to PAYE deductions in the same way. So, a P11D is used to declare this extra ‘income’ to HMRC.
Who pays what on the P11D bill?
Just like with most types of HMRC return, the P11D comes with a bill at the end of it! The employee is taxed on the benefits that they receive, and this is usually deducted through payroll. A bit like PAYE, the employer then pays these deductions on their behalf.
Benefits covered by P11D are also subject to National Insurance, but this is paid by the employer, not the worker.
Should employees be given a copy of their P11D?
It is good practice to give employees a copy of the information submitted on their P11D. If they’re self-employed on the side (which you might not know about!), they’ll need that information for their Self Assessment tax return. They can also ask HMRC for a copy of the information which you submit.
If you have questions about P11D, or providing expenses to your staff, we can help! Call 020 3355 4047 or use the live chat button on your screen. Or, get a free instant quote for our online accounting services.
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