Benefits In Kind – Forms P11D & P11D(b)
It is that time of year again when employers need to consider preparing their annual P11D & P11D(b) forms. These are the documents used to advise HM Revenue & Customs what taxable employment benefits have been provided to employees.
Taxable benefits are defined as expenses the business incurs but have a personal benefit for the employee.
The most common taxable benefits include providing company cars, fuel, private medical insurance, interest free loans, gym and golf club memberships.
The Class 1A National Insurance due is 13.8% of the calculated benefit.
Changes to the reporting requirements from April 2016
From 6th April 2016 there is no longer a requirement to report reimbursed expenses on the P11D form as there is now a statutory exemption in place covering these. It is expected this will reduce significantly the burden this placed on smaller businesses. This means that only taxable benefits like those listed above will need to be reported on the annual P11D form.
If the only entries on previous P11D forms were reimbursable expenses the employer will still need to notify HMRC that there are no benefits in kind or Class 1A National Insurance to pay, by way of the submission of a nil P11D(b). Failure to do so may result in financial penalties.
Common Errors to Avoid
- Submitting a paper form when an electronic form has already been submitted
- Omitting fuel benefit details, if received, when completing car benefit details
- Phone contracts should be between the business and the phone company not employee
- Ensure use of list price of vehicle used rather than cost price to business when bought
- Ensure entry of dates where the vehicle is not available for the entire year
The forms must be received by HMRC by or on Thursday 6th July 2017.
The payment of the Class 1A National Insurance must be made –
By Post – 19th July 2017
By electronic means (Faster payment) – 22nd July 2017
For more information or to answer any questions you may have on P11ds please contact your nearest Perrys office.
Article written by Doug Shanks