P11D Returns Service

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P11D Returns

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As of April 2018 HMRC have stated that it is now mandatory to file a P11D form every month which will cover any benefits for employees not covered in their pay, for example a company car or expenses.

No matter the size of your business, our professional accountants can help and support your needs.

What is a P11D form?

A P11D form is a form that covers the expenses and benefits of your employees. This form is used to report to HMRC benefits in kind. These are individual forms which must be filed for each employee or director and submitted to the tax office that their companies PAYE scheme is set up.

A P11D form is used to cover any expenses paid to an employee that is not in their wages or through their payroll. For example, company cars, food expenses, petrol expenses any interest free loans, private healthcare, travel tickets for work.

A benefit in kind from an employer is effectively viewed as a wage increase. National Insurance may have to be paid on any benefits in kind that are received. However, any contributions that need to be paid due to this will have to paid by the company and not the employee.


Who is responsible for filing a P11D?

It is the responsibility of the employer, not the employee, to file a P11D form. However, if you are self employed, a contractor or a freelancer will be you who has to file it, as you are effectively both employer and employee.


Reporting and Paying

A P11D form needs to be completed and sent to HMRC for each employee in receipt of company benefits of expenses.

Sometimes you may need to submit a P11D (b) for too, you will need to complete one of these if:

  • Your company has submitted even a single P11D form.
  • If you have paid any expenses or benefits to your employees through your companies payroll scheme.
  • If HMRC have contacted you via email or sending you a form asking you to.

A P11D(B) form lets HMRC know how much class 1A National Insurance that needs to be paid on any benefits or expenses that you may have given to your employees.

It is possible that even if HMRC has asked you to fill and give a P11D(b) form you may not owe them any Class 1A National Insurance. If you feel you don't then you can complete a declaration form. We can help you with this form and any other issues you may have.

All P11D form need to completed and filed with HMRC before the 6th July after the tax year you a filing for. For example, if your P11D form is for the tax year of April 2016 to April 2017, the P11D must be filled out and filed by the 6th July 2018.


Do I need to pay tax on benefits through my payroll system?

It is possible to pay and deduct tax through your companies payroll system. This can only be done if you have registered with HMRC before the 6th of April, which is the start of the tax year in the UK.

If you decide to pay the tax on your employees benefits through the companies payroll then you will not need to submit a P11D form.

However, any Class 1a National Insurance that is owed will still have to be paid and a P11D(b) form must be completed for this.


What must I report on my P11D and P11D(b) forms?

All benefits and expenses received by your employees is calculated at different rates. Our experts are on hand to help you through this process, and can support you on what must be declared and paid to HMRC. If you choose us we can complete and submit these returns for you.

However, should you choose to do it yourself it should be noted that you must include any loans for rail season tickets, company cares, others loans, any assets that you have given to an employee that can be used for personal use e.g. a mobile phone, health insurance. self assessment fees that are paid by the company, non-business entertainment expense e.g staff socials, and non-business travel expenses.

There is also a PAYE settlement agreement, this is for minor expenses or benefits and it can be possible to make one off payments through this scheme.


How do I report my employees expenses or benefits?

We here can take the hassle of completing these forms and returning them for you. However you may choose to do this yourself. There are several ways in which this can be done.

  • You may choose to buy a commercial payroll package.
  • You may choose to use HMRC's PAYE Online Service.
  • You may choose to use HMRC's Online End of Year Expenses and Benefits Service.

P11D and P11Db forms are also available on the government website for you to fill out and download, which you would then have to send to the P11D support team.


Some changes to the P11D

Before April 2016 your were able to omit certain expenses from your P11D if you received prior dispensation from HMRC to do so. For ease of reporting, this has been universally replaced by and exemption system. Now, almost all and any business expenses that can be incurred by an employee do not have to be filed on the P11D any longer.

Some of the expenses that have become exempted are:

  • Any travel for business.
  • Any expenses incurred for business entertainment.
  • Credit cards that have been used for business purposes.
  • Any fees and subscriptions for employees that are needed for the business.

What penalties are there for late filing my P11D?

Please note, that HMRC are on hand to reprimand you with a hefty penalty or fine for late or incorrect filing. This is why it is often advised that you use P11D experts to assist you in this. However, should you choose to do it yourself please be aware that you do have a two week grace period. If you miss the deadline or make an error, HMRC allows you two further weeks in which to rectify any or all of these two errors. If, by July 19th, you still have not filed your P11D or have not rectified any mistakes that you have made then HMRC will fine your company £100 per month per 50 employees.

HMRC will wait until November to send you a reminder, in which they will detail all the fines you have accrued until then, they will also outline any fines you will receive for mistakes, however they have been known to show leniency for some of these.

If the error made appears to be a genuine error, and not an omission for tax evasion purposes, and HMRC believes that you have taken the time, care and applied due diligence to the process before filing, it is possible that HMRC will not fine you. However, be aware that HMRC has been known to issue stiff penalties. These vary and can be 30%, 70 % or even 100% of the outstanding tax. HMRC will apply these if they believe that you or your company has acted deliberately, in an attempt to hide from HMRC the true liabilities, or even if HMRC believes that you acted carelessly. If you are uncertain of your ability to carry out this function adequately it is strongly advised that you seek professional support.


Common mistakes made on P11D forms

Loan Accounts for Directors

In the event that your companies directors loan account (DLA becomes overdrawn at any time throughout the financial year by more than £10,000, this information will have to be recorded on your P11D form. Interest must be paid on the amount that is overdrawn, moreover, National Insurance will also be paid by your company on the interest that has been paid. A tax liability will be faced if your Directors Loan Account (DLA) is overdrawn by £10,000 or greater at any time throughout the tax year, so it pays to keep a close eye on your Directors Loan Account (DLA). The tax that is owed to HMRC is calculated for each day that you Directors Loan Account is overdrawn by £10,000 or more.

Make sure that you are careful not to replace the money in the Directors Loan Account with your own money, only then to withdraw it within 30 days. This is a practice known as bed and breakfasting.


What if I use my home phone?

It is sensible to get mobile phones for your employees or yourself, as any costs that are incurred for work calls can be overlooked by HMRC. Either keep very accurate logs of calls made and money reimbursed to employees for said calls, or provide phones in the first place for ease of reporting.


Forgetfulness or Neglect on your P11D form

It is important to keep up to date with your accounts. Make sure that you identify and address any issues early by keeping up to records. This will ensure that you are inputting quality data on your P11D forms and make the process much easier when it comes to filing it.


I have made an error on my P11D, how do I correct it?

It is important to complete these form accurately as you can face penalties from HMRC if you have made a mistake, or if you have deliberately given incorrect information which leads to you not paying enough in taxes, or claiming too much tax relief. So it is important that you complete these forms properly and honestly. If an error is made you can correct it however you must resubmit all P11D and P11D)b) forms for that year or month, not just the one that you have made an error on. This must be done within two weeks of the deadline of the 6th of July, so by the 19th of July your complete P11D form without errors should be submitted to HMRC to avoid fines and penalties. We can help to minimize the risk of errors and therefore penalties. Our experts can complete and submit these forms for you, as long as the information you have given us is correct then there should be no issues with HMRC.

How can we help?

Our accountants are here to help with the process, it is up to you how much assistance you need. Whether you contact us to complete your P11D forms at the end of the tax year, or, to minimise risks and errors wish us to take more oversight of the process throughout the year, feel free to contact us to see how our professional, reliable, expert accountants can help.

Frequently Asked Questions About P11D


How do I get a copy of my P11D?

In the event that you lose your P45 you are unable to get a replacement. You will have to complete a New Starter Checklist for your new employer.

However, in the event you lose your P60 or lose your P11D, you are easily able to get a replacement copy from your employer.

You are also able to contact HMRC and they will be able to give you a copy of your P11D.

When should I get my P11D from my employer?

It is the responsibility of your employer to provide you with your P11D before the 6th July after the end of the tax year.

It is a good idea to keep your copy of the P11D form as you may need it to claim or return a repayment of tax.

Does my employer have to give me a P11D?

If you receive any benefits in kind, for example health insurance or a company car, your employer must inform HMRC of these by completing and filing a P11D.

If you have received any benefits in kind then your employer will have to provide you a copy of your P11D form by 6th July in the tax following the tax year.

For example, if the tax year has run from the 5th April 2015 to the 6th April 2016 then the copy of the P11D form will have to be issued to you by the 6th July 2016.

Do I need to file a P11D?

You will need to submit a P11D form for each employee to HMRC at the end of each tax year. Moreover, if you have submitted any P11D forms you will also need to submit a P11D(B).

Is life insurance a P11D benefit?

If the employer is paying the life insurance for the employee, then yes, life insurance is a benefit and should be reported on a P11D form.

However, if it is the employee who sorts out and pays the life insurance policy then it is not. However the pay out to the beneficiary will be tax free.

How are P11D benefits taxed?

The tax that is owed on benefits received from your employer is paid through the PAYE system to HMRC.

Employees must still pay tax on company benefits like accommodation, cars or loans.

Moreover, when items are for in cash, you still have to pay National Insurance and Tax which is taken through the PAYE system.

What does made good mean on P11D?

Made good means to have repaid money owing in some way.

For example HMRC states: Class 1A National Insurance contributions: Calculating Class 1A NICs: Amounts made good by the employee.Meaning the Class 1A National Insurance contributions have been made good, repaid.

Is private medical insurance a P11D benefit?

If you receive medical insurance that is paid for by the employer or company, it is considered a benefit and is therefore taxable.

However if you have medical insurance that you pay for yourself it is not.

HMRC will reduce your personal tax free allowance to make sure that you pay the correct amount of tax.

Is life cover a taxable benefit?

If the employer is paying for the life insurance then HMRC will consider it a benefit and it will taxed through the PAYE system by reducing your tax free personal allowance.

However, the insurance payout to the beneficiary will be tax free.

What is a benefit in kind HMRC?

Benefits in kind, which are sometimes referred to as fringe benefits or perks, are benefits that directors or employees receive that are not including in their wages or salary cheques.

These can be things such as private medical insurance, company cars or loans.

Do you pay tax on benefit in kind?

Yes. As an employee, any benefits in kind that you receive like accommodation, cars or loans, you have to pay tax on.

Your employer will take the tax at source on your wages through the PAYE system, so you should not have to do anything.

Anything that your employer pays in cash you still have to pay tax and national insurance on, these things are also considered by HMRC to be earnings.

Who needs to submit a P11D?

It is usually the employer or the provider of the benefits in kind that will have to file a P11D.

So if you're self-employed, that will be you who has to file it.

A P11D will have to filed with HMRC for each employee that has been provided with a benefits or expenses.

If you submit even a single P11D form, you will also have to file a P11D(b) form too.