P11D form is a tax document used by HMRC (Her Majesty’s Revenue and Customs), that employees fill in every year to report benefits and allowances given to their directors or employees.
It aims at giving HMRC information on certain taxable benefits that have not been entered into the regular payroll thus no deduction of tax or national insurance contributions (NICs) was made for the whole year.
What information does a P11D form include?
The details provided in the form are those about an individual employee like name, date of birth, National Insurance number as well as any additional bonuses beyond the salary they received.
They can range from housing and meal allowance (as per usual rates) to vouchers and credit cards. It is sent to HMRC so as to determine if there should be any taxation on these perks.
What is a P11D form used for?
A P11D is an employer’s return that reports benefits that were omitted from the normal way of paying staff earnings (pay-as-you-earn system/payroll). Similarly, it helps employers to notify and pay employer NICs due on non-payrolled benefits.
What details does a P11D form need?
They consist of:
- Transfers of assets
- Voucher schemes
- Provision of living accommodation
- Company cars and fuel
- Provision of vans and fuel
- Payments for private medical care or health insurance
- Beneficial loans at low interest rates
- Repayments made by way of expenses that would not qualify as business expenditure in respect of staff members or company directors;
For most taxable benefits this must be into your payroll from 2016 with exceptions which are marked with (*).
Does the P11D affect National Insurance Contributions?
Employers may account for Class 1A NICs (National Insurance Contributions) whilst paying tax on these expenses/benefits within the same payroll.
In relation to non-payrolled items, employers will complete PAYE reference and pay tax and NICs to HMRC via the P11D form. In addition, they need P11D(b) which serves as a companion for this purpose.
Who pays the P11D tax?
If you already have such benefits as medical insurance or private usage of a company car within your payroll, then you must have paid tax through PAYE. For other non-payrolled benefits, salary deductions are made on my salary or annual personal tax returns made in order to collect this tax.
This is used to show non-payrolled benefits on which Class 1A National Insurance Contributions are payable.
How is the P11D tax calculated?
The amount of taxation depends on the nature of the benefit. The rules may vary but generally, these perks should be treated like earnings and taxed accordingly.
Do I need to receive a P11D from my employer?
Yes if you received taxable benefits that were not covered in your payroll. This happens often with limited companies providing interest-free or low-interest loans
When are P11D forms due?
Employers submit their end-of-year filing responsibilities through PAYE Online Service by filing both P11D and P11D(b) forms. Those statements must be made by July 6 following the end of the year on April 5th. Class 1A NIC payments should be made by July 22nd unless no electronic methods were used before that time
What benefits are included in a P11d?
The P11D form reports “benefits in kind” which are additions to an employee’s salary such as cars given by employers, medical insurance, company credit cards, and travel expenses among others. Such a thing may be considered as a benefit if it is not part of the basic wage.
Are there any benefits exempted?
Although the majority of employment perks are taxable, HMRC has exemptions for items such as fees and subscriptions; business travel as well as trivial benefits worth £50 or much less unless they occur within a salary sacrifice agreement.
Is there an alternative to filing P11Ds?
For the payment of benefits in kind, employers have a choice to make on either filing individual P11D forms or using “Payrolling Benefits in Kind” (PBKI). This system calculates the value of employee benefits over the year and deducts tax through the payroll. After the end of the fiscal year, employees may receive statements that will indicate taxed benefits by June 1.
