An employer who provides employee benefits to its workforce has to report these expenses to HM Revenue & Customs. If an employee or company director earns more than £8500, a form P11d is completed and returned to HMRC. However, if an employee or company director earns below £8500, a form P9d is completed with the details.
The completed form P9d has to be sent into HMRC by the deadline of 6th July 2011. A copy of the form will be provided for the employee, so that the details can be used when completing a self-assessment tax return.
It is possible to submit form P9d online, using one of several methods. You can use the Online PAYE Service which is provided free of charge. A commercial software package may also be used. If the employer is a large company, using the Electronic Data Interchange may be preferable. Another option is to outsource to an agent or accountant who will file online on your behalf. Filing online has a number of benefits, including speed and convenience. Some of the calculations are done automatically for you if you file online, which reduces the error rate and helps you to work out values of certain benefits. Filing online also allows you to correct any errors before final submission, ensuring correct deduction of tax for employees.
When calculating the £8500 threshold, all benefits must be included with salary. The threshold is also calculated on a pro rata basis, which means that if an employee only works for six months of a year, the threshold will be reduced to £4250 accordingly.
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