When your business pays expenses or offers employee benefits, you’ll more than likely have to submit a P11D return to HMRC.
If you’ve just started out on your business journey, this could be news to you. But even if you are familiar with the process, there are changes to remind yourself of.
Here’s everything you need to know about your business’s P11D form.
What is a P11D form?
A P11D form is a way of recording and reporting certain expenses and employee benefits to HMRC. These benefits usually include (but are not limited to):
- company cars
- medical insurance
- gym memberships.
As an employer, you must keep detailed records of all the benefits you provide, such as:
- the date and details of every expense or benefit you provide
- any information needed to work out the amounts you put on your end-of-year forms
- any payment your employee contributes to an expense or benefit.
- You must keep records for three years from the end of the tax year they relate to.
If you pay all of the tax on your employees’ benefits through payroll, you won’t need to submit a P11D. You will, however, need to submit a P11D(b) form and pay any class 1A National Insurance contributions (NICs) you may owe from the benefits.
You don’t need to fill out a P11D for employees who are paid below the lower earnings limit of £530 and receive a benefit. Furthermore, you won’t need to report any trivial benefits (which we’ll discuss later).
When do I have to inform HMRC?
The final deadline for any P11D declarations is 6 July 2023, so you must report any necessary benefits and expenses from the 2022/23 tax year. If a business fails to meet the deadline, it could incur a £3,000 penalty for each overdue form.
But, as of 6 April 2023, how you submit a P11D has changed. Employers, except for the digitally exempt, must file all P11Ds and P11D(b)s online. HMRC has introduced legislation to mandate online submission in three ways:
- through an online pay portal
- through an agent online service
- through HMRC-recognised payroll software.
Employers and agents can use the free online services to file up to 500 P11D and P11D(b) forms. For any more than 500, eligible third-party software has to be used.
What information should I include?
Guidance on filling out a P11D can be found online, but you will need to include the following information:
- your company’s name and address
- the tax year of the reported expenses
- the names and addresses of the employees who are receiving benefits or expenses
- a description of the benefits or expenses
- the value of the benefits or expenses
- class 1A NICs (P11D(b) only.
Remember, you won’t need to report trivial benefits as they are usually tax-free, but only if they meet the following criteria:
- it costs you £50 or less to provide
- it isn’t cash or a cash voucher
- it isn’t a reward for their work or performance
- it isn’t in the terms of their contract.
Don’t miss your deadlines
Reporting your employee expenses and benefits is essential as a business owner. Not only that, but the deadline is only around the corner.
Don’t worry; we can organise and file your P11D forms for you. We’ve done it countless times before.
If you need help filing your P11D expense forms, get in touch.