The P11D deadline is just a few months away, which means employers that need to complete one, should be making the necessary preparations now. If this is the first time you have been required to report employees benefits or non-exempt expenses, you may be wondering where to start. Which is why we have covered all the ‘need to know’ information in this blog. Additionally, all payroll clients will shortly be receiving an email about this from the payroll services team here at Kingston Burrowes.
What is a P11D form?
A P11D form is used to report benefits in kind or non-exempt expenses, that some or all employees may have received from in addition to their usual salary during the tax-year ended 5 April 2021 and have not already been deducted through payroll.
Even if employee benefits have been processed through payroll during 2020/21, a P11D(b) must still be sent.
The form enables HMRC to calculate how much an employer must pay in Class 1A national insurance contributions (NICs), in addition to how much PAYE is due from the employee on the benefit.
How do a P11D and P11D(b) form differ?
In simple terms, a P11D(b) summarises the P11D forms that have been submitted to HMRC and forms a declaration of the amount of Class 1A NICs that are due for the year.
Who is responsible for the filing of a P11D form?
It is always the responsibility of the employer, rather than employee to file a P11D form.
When is the P11D deadline?
The deadline for P11D submissions to HMRC is 6 July (following the tax year in question). For the most recent tax year (6 April 2020 – 5 April 2021), the deadline will be 6 July 2021.
What should be included on the P11D form
A number of non-exempt expenses and benefits should be included on the form, if you have purchased them for your employee’s advantage. This includes the following, among others:
- Company cars
- Health insurance
- Non-business travel expenses
- Non-business entertainment expenses
Records needed to support a P11D submission
A record of all expenses and benefits provided to employees should be kept. This includes the dates and details of all expenses or benefits provided, as well as related information used to calculate the amounts you entered on end-of-year forms. Payments contributed by employees to an expense or benefit should also be retained. These records must be kept for a minimum of three years from the end of the tax year they relate to.
Due date for National Insurance
For the 2020/21 tax year, any tax due on the benefits provided to employees, must be paid by 19 July 2021 for cheque payments, and by 22 July 2021 for electronic payments.
Penalties for late submission or submission of incorrect information
To avoid unnecessary penalties from HMRC, it is essential that the correct information is provided on time. Late submissions are subject to a penalty of £100 per 50 employees, per month, for each month that the return is late. Late payment to HMRC will also incur fines and interest. If HMRC judges that you have deliberately or accidentally provided incorrect information on the P11D, then a penalty would be incurred, which could amount to up to 100% of the tax owed.