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What is a P11D Form? Everything You Need to Know

A P11D form serves as a comprehensive document in which employers can report specific taxable benefits in kind to HM Revenue & Customs (HMRC). These benefits are either ineligible or intentionally excluded from regular payroll processing, subject to PAYE and NIC deductions throughout the year.

The intricacies of what should be included in a P11D can often be challenging to grasp, often undergoing periodic revisions.

In the wake of the COVID-19 pandemic, numerous businesses have ramped up their spending, recognising the importance of reconnecting with their employees on a personal level and curbing staff turnover. Consequently, it is vital to ensure accurate reporting of these expenditures to sidestep any potential repercussions.

In this article, we share everything you need to know about P11D forms, from their completion process to the scenarios wherein individuals may expect to receive one.

Why Have I Been Sent A P11D Form?

All employers, regardless of their business structure, are mandated to file a P11D form. Even self-employed individuals may find themselves obligated to submit one, depending on their specific circumstances.

Unfortunately, P11D filings are not dependent on your company year. The deadline for P11D submission is fixed on the 6th July annually, irrespective of whether you opt for online filing or traditional postal submission.

Failure to meet this deadline can lead to penalties. If the 19th of July passes and your P11D remains outstanding, your company will face fines of £100 per month (or part thereof) per 50 employees. By November, if the submission is still outstanding, HMRC will issue a reminder along with a breakdown of the penalties accumulated.

Additionally, HMRC reserves the right to impose penalties if inaccuracies are detected in your P11D submission, although such penalties typically arise only in cases of deliberate misreporting.

As an employee, you’ll be issued a P11D form if you’ve received any taxable benefits in kind from your employer throughout the year. Additionally, unless your employer has made alternative arrangements with HMRC, the form should include reimbursements for business expenses you’ve personally covered. You should keep the form in your records as you may need to refer to it when completing a tax return or claiming a repayment of tax.

Please note, if your employer takes the tax you owe on your benefits out of your salary, you might not receive a P11D form.

How To Fill Out a P11D Form

A P11D documents ‘benefits in kind’. This refers to various supplementary perks provided to employees alongside their regular salary. Typical examples include childcare expenses, private medical insurance and a range of other offerings, including:

  • Company cars
  • Employer loans over £10,000
  • Memberships
  • Accommodation

If you find yourself uncertain about what to include in your P11D, it’s advisable to record anything beyond your employees’ basic salary.

A copy of the document should also be provided to the employee. This will enable them to complete their tax return, review any tax deductions and/or prepare claims for tax relief.

Are There Any Exemptions?

Before 2016, businesses could exclude expenses from P11D forms by securing a special dispensation from HMRC. However, this process has since been replaced by an exemption system. This alleviates the obligation to report most business expenses personally incurred by company employees on a P11D form. Exempt expenses now include:

  • Business travel
  • Business entertainment
  • Credit card use for business purposes
  • Fees and subscriptions

What Is A P11D (b)?

Occasionally on HMRC’s website, you may encounter references to form P11D(b). This form is a requirement for employers, serving as a summary of the individual P11D forms they’ve filled out for their employees.

For HMRC, it signifies a declaration that you’ve provided all the relevant information concerning expenses and benefits, confirming that no details have been knowingly left out.

Is There An Alternative To A P11D Form?

Instead of completing individual P11D forms for each employee, business owners have the option to utilise the ‘Payrolling Benefits In Kind’ (PBIK) system. Under this arrangement, the value of employee benefits is assessed annually, and the corresponding taxes are deducted via the company payroll.

Employers opting for this method must notify their employees accordingly. Subsequently, employees will receive a statement detailing the taxed benefits, which must be given to them before the 1st of June following the end of the tax year.

What Is A P11D Form? Contact Us About P11D Expenses and Benefits

At Hartley Fowler, we’re proud to provide a range of tax services to ensure compliance, including assistance with P11D forms.

As part of our P11D compliance service, we offer support in various areas including:

  • Completion of the P46 (Car) form when initiating or discontinuing the provision of a car for an employee’s private use.
  • Handling the P11D expenses and benefits form.
  • Assistance with dispensations.
  • Calculation of Class 1A National Insurance Contributions (NICs).

To find out more about our unrivalled P11D compliance services, please get in touch. Alternatively, please arrange a free consultation with one of our experts.