06 May, 2020 03:35 PM
Admin Category: Payroll,

P11D Form: Everything You Need to Know

This blog provides a overall view of the P11D form and what you need to know

Every year you need to report to HM Revenue and Customs (HMRC) regarding the expenses and benefits your employees get provided by your company. The items are reported through a P11D form. In today's blog, Team Taj Accountants has come up with the most asked questions regarding the P11D form.

What is a  P11D form?  

The P11D form is used to report items or services to HM Revenue and Customs (HMRC) which you or your employees receive from your company in addition to your salary, health insurance, travel and entertainment expenses, and company cars.  

Based on them, you need to pay tax and National Insurance to HM Revenue and Customs (HMRC). There are rules that vary based on what you have to report and pay depending on what you provide to your employees. 

What is a P11D(b) form?

A P11D(b) is a form employers must submit to HMRC by summarising the individual P11D forms completed for the employees. Your P11D(b) tells HMRC how much Class 1A National Insurance you need to pay on all the expenses and benefits you’ve provided. 

You’ll also need to submit a P11D(b) form if:

  • you’ve already submitted any P11D forms
  • you’ve paid employees’ expenses or benefits through your payroll
  • HMRC have asked you to either by sending you a form or an email

Who needs to file a P11D?

Generally the employers need to file the P11D forms for employees to HMRC. But if you are self-employed or a contractor then you have to submit it by yourself and for yourself. 

When do you need to file a P11D? 

You need to file your P11Ds at the end of the tax year. For instance, for the tax year 6th April 2019 to 5th April 2020, you are supposed to file your P11D online by 6th July 2020. 

What do you need to include in your P11D?

For a common scenario what you generally have to include is:

  • Company cars
  • Travel and entertainment expenses
  • Health insurance
  • Assets provided to an employee for personal use
  • Self Assessment fees paid by the company
  • Loans for rail season tickets
  • Other loans

But as mentioned earlier, every expense or benefit is calculated differently based on the type of expense or benefit you are providing as an employer. For example, based on PAYE Settlement Agreement you might be able to make a one-off payment on ‘minor’ expenses or benefits.

What are the P11D exemptions and dispensations?

Expenses that you do not have to report to HMRC are known as ‘exemptions’. Previously you could’ve omitted expenses from P11D forms with a special dispensation from HMRC. Adoption of exemptions has replaced dispensations thus you can’t apply for a dispensation any longer. Now you can exempt the following expenses:

  • Business Travel
  • Business entertainment expenses
  • Credit cards used for business purposes
  • Fees and subscriptions
  • Uniform and working tools
  • Phone bills. 

Other than the above expenses, you must deduct and pay tax and National Insurance on all other expenses and benefits you give to your employees, and report them to HMRC accordingly. 

What are the P11D penalties? 

As you have to submit your P11D forms online to HMRC 6 July following the end of the tax year, crossing the date will lead you up to penalties. As a penalty, your company will get fines of £100 per month per 50 employees by the HMRC. Also, you may get charged for carelessly or deliberately giving inaccurate information in your tax return. So you need to keep reminding yourself of the due date, give your employees a copy of the information on your forms or let your local accountants in London take the headache for you. 

What are the common P11D mistakes and how do you correct them?

Some of the most commonly made mistakes are: 

Directors Loan Accounts (DLA) and expenses: If you are the director and you withdraw more than £10,000 from the Director’s Loan Account then HMRC will charge you interest on this at 2.5% for the 2020/21 tax year. If you need to pay loan interest on an overdrawn DLA then your company will also need to pay Class 1A NICs on the interest payments at 13.8% by completing and submitting a P11D(b) form to HMRC.

Also, the borrowed cash from the company which may not appear in the daily records leading to an overdraft record will cause you a penalty. Thus you need to be aware of it and whoever preparing you form may also need to be aware of it. 

Asset Transferring: On a daily basis when an asset is depreciated and the value of it gets decreased, the recording of the transfer does not apply correctly to the P11D. So it is important to add the perceived value in order to support the documentation. 

Employee phone usage: Cost occurance of the mobile calls by employees is not a taxable expense. But if the calls are too frequent and the cost is too rapid then it’s not something to be overlooked. In such cases Taj Accountants recommend you on providing company mobiles to omit the confusion and error.

How do you file a P11D to HMRC?

You must file the P11D form with HMRC within 6th July each year. For any tax due, you must send them to HMRC by the 22nd July each year. For filling you can use commercial payroll software, HMRC’s PAYE Online service and HMRC’s Online End of Year Expenses and Benefits service. 

But if you’re concerned about obtaining accuracy regarding your filing and looking for accountants in East London to take your stress away from your shoulders then you can contact our team of experts who’ll guide you through the way and provide you the most convenient service at a very reasonable price. Our expert team of Taj Accountants in East London aims to deliver our services with the top-notch technology. By contacting us you can run your assessment, P11D returns, check and submit to HMRC. You can contact us through our helpline number or online. 

DISCLAIMER: The purpose of the blog is to provide information and insight regarding the situation. The readers must contact experts before making any decisions based on the information. We highly appreciate you to contact Taj Accountants for further assistance.


How to apply for an exemption?

You have to apply for an exemption if only you want to pay bespoke rates to your employees. If you are already paying the benchmark rates for allowable expenses to HMRC then you don’t need to pay for an exemption.

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