What’s a P11D and when are they needed?

Limited Company, News, P11Ds,

P11Ds are part of the annual cycle of submissions required by HMRC. They become necessary if you provide your employees or Directors any benefits or expenses.

The primary areas to consider are:

  • Company cars.
  • Accommodation costs.
  • Health or dental insurance.
  • Travel expenses.

Obviously, some of these will have been affected by Coronavirus over recent years, and things like accommodation costs may not have been relevant if you’ve been working virtually, but if HMRC usually receive submissions, they will still expect them!

There are lot of different expenses and benefits that you may be providing to your staff or to Directors that need to be considered and potentially need to be included in forms P11D. The form tells HMRC about the benefits and expenses and enables them to calculate the amount of tax or Class 1A National Insurance that should be paid on those benefits or expenses.

You need to submit a P11D to the Revenue for each employee who receives any of those sorts of benefits.

WHEN DO YOU NEED TO SUBMIT A P11D(B)?

  • If HMRC they ask for one.
  • If you submit any P11Ds.
  • If you’ve paid any benefits or expenses through the payroll.

The deadline for submission to HMRC is 6th July each year.

If the Revenue have asked for a P11D but there’s nothing to submit, then you can apply for a Declaration. This means that in future years you won’t need to submit a P11D.

If you’re paying tax on the employee’s benefits and expenses through the payroll, you don’t need to submit a P11D for them but you DO need to make sure that you include those amounts on the P11D(b) because you need to take account of the Class 1A National Insurance. That Class 1A National Insurance needs to be paid over by the 19th July.

WHAT ARE THE TWO P11D DEADLINES?

  1. The 6th of July for the P11D to be submitted to HMRC.
  2. The payment of the Class 1A National Insurance by the 19th of July.

The two deadlines attract penalties and interest if they are missed.

All of the different types of expenses and benefits are calculated differently, so you need to make sure that you consider all of the different types and that you’re looking into each one.

If you would prefer for us to do that for you, of course we can! We prepare P11Ds for clients every year, and always check with them whether anything may have changed since the previous year. Things change, and it’s easy to forget that a new benefit added during the year needs to be included.

It’s actually quite a simple process for us to prepare P11Ds and P11D(b)s as we can usually draw the necessary information from your accounting software, once we know that one is needed and what we need to look for.

We usually contact clients during April and May to check whether a P11D is required, and to confirm whether the entries have changed from last year.

If you’re a client and can gather together all of the necessary information before we ask for it, that’s very welcome! Please feel free to send it over to us in advance of our request. You can either send it to us by email, or use the Document Exchange, linked from each webpage or the footer of our emails.

You can see a little more about P11Ds in this video. As ever, if you’d like to discuss these or anything else, please get in touch.

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