What is a P11D form?

Business woman in her company car will fill in a P11D form

What is a P11D form?

Employers have only a week left to file P11D forms for those employees and directors who receive ‘benefits in kind’.

The form should be with HMRC by 6 July and any Employers National Insurance due must be paid by 22 July. But what is the P11D? Many people, especially those with company cars, will know it affects them but many don’t know what it means. 

So, we explain more about what the P11D means to you and your business.

What is the P11D?

If you or your employees receive benefits in kind a P11D needs completing each year. So, what are benefits in kind? They are sometimes known as perks and are benefits received by employees or directors that are not wages or salary.

These benefits include company cars and private healthcare. If you receive benefits report them to HMRC on your self-assessment return by 31 January following the tax year end.

The P11D form allows you to record your benefits on that return.Your employer gives this to you on or before 6th July.

Some benefits in kind are not taxed but others are. As benefits effectively increase your salary, National Insurance contributions may need to be paid on them. These contributions are paid by the company that employs you and not by you.

Who needs to file the form?

If you are employed by a business and receive benefits in kind, the company that employs needs to file P11Ds. 

If you have employees, it is your responsibility so don’t miss the deadline as you will face a penalty.

When I do I need to file?

P11D filings must be filed by 6 July following the tax year in question. So, for example, P11Ds being filed this year relate to the previous tax year, in this case from 6 April 2019 to 5 April 2020.

What to include in a P11D

As we have mentioned, any expenses and benefits an employee receives that a company pays for needs to be reported to HMRC. These are:

  • Company cars
  • Loans for rail season tickets
  • Other loans
  • Assets provided to an employee that have significant personal use
  • Non-business travel expenses
  • Non-business entertainment expenses
  • Self-assessment fees paid by the company
  • Health insurance

Exemptions for certain business expenses

There is now a system that allows exemption, whereby the majority of business expenses incurred personally by employees no longer need to be recorded on P11D forms. These include:

  • Credit cards used for business purposes
  • Fees and subscriptions
  • Business travel
  • Business entertainment expenses

P11D penalties

The P11D needs filing by 6 July. If you miss this deadline you won’t incur penalties immediately, but you must ensure you have done so by 19 July or you will immediately receive a penalty of £100 per month per 50 employees.

HMRC will send you a reminder if you haven’t filed by November along with all the penalties you have received until then. The simple answer is, do it now!

If you leave it until the end of the year to file and the P11D is incorrect, you also face further fines if HMRC believes you deserve them.

Penalties of 30%, 70% or 100% of the tax owed are applied if HMRC believes you acted carelessly, attempted to conceal your true liabilities or deliberately misled them.

What to do next

Quite simply, sort out your P11D for your business now and make sure you file to HMRC before the 6 July. It is quite a difficult time for many businesses this year, but make sure you don’t accrue a penalty by neglecting the P11D.

Once you submit the P11D(b) form which sums up the liability on all the P11Ds submitted you will need to pay National Insurance contributions. Remember, any Employers National Insurance due must be paid by 22 July and included in your monthly payroll payment to HMRC.

If you are unsure about P11D and want to know more, you can contact us by emailing [email protected] or use our contact form.