P11D – What is It?

A P11D form is the means by which an employer notifies HMRC of any employment benefits given to employees. It allows employers to detail the cash equivalents of benefits and expenses that they have provided during the tax year to their directors, and employees earning above a fixed rate. The most common benefits include company cars, interest free loans, medical benefit and car fuel allowance, although there are many more.

As an  employer you are not required to issue a form P11D to employees though you ares obliged to share with employees what is on the form, the easiest way is to provide a copy to the employee.

Taxable Benefits

Items that are taxable are those that the company pays for and from which the employee benefits such as  

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

Non-Taxable Benefits

Some benefits, whilst subject to specific rules, do not incur liability for  Tax or National Insurance such as

• Workplace car parking
• Pension contributions
• One mobile phone
• Qualifying child care (basic rate tax relief only)
• Relocation costs
• Relevant training
• Bicycles
• Long-service awards
• In-house gyms and sports facilities
• Cheap/free canteen meals
• Gifts unconnected with work
• Electric cars
• Business mileage payments
• Work and safety clothes
• Overnight expenses if away on business
• Staff parties

Exemptions

Since 2016 an exemption scheme has been in place which means that some expenses personally incurred by employees and reimbursed to dot need to be recorded such as

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

As an employer you are obliged to calculate a cash equivalent for any benefits that are subject to Income Tax and/or National Insurance and report those details to HMRC.  The information must be submitted by 6 July following the end of the end of the tax year (5 April). There are, as ever, substantial penalties for late or inaccurate filing of the returns.

This is a very broad brush outline your company’s P11D obligations, for a more detailed and definitive information please contact us and we will do our best to assist you.