If you’re an employer and need to report end-of-year expenses and benefits for employees who earned £8,500 or more then P11D forms are to report on benefits in kind. These are items or services which you may provide in addition to any salary (perks, basically), such as private healthcare, interest-free loans (to pay for train season tickets, for example) or a company car. The annual P11D form allows you to report these perks to HMRC. As benefits in kind effectively increase your employee’s salary, there may be National Insurance contributions to be paid on them (although it’s important to note these contributions will be paid by the company, not the individual).
Who files a P11D?
P11Ds must be filed for any company directors or employees who earn over £8,500 per year, or any company director who owns more than a 5% shareholding in the company. P11Ds are filed by the company, not the employee – although for many freelancers and contractors that is one and the same!
When to file your P11D?
P11D filings are not dependent on your company year, and must all be filed by July 6th following the tax year in question. So, for example, your P11D for the tax year running April 2014-April 2015 must be filed on July 6th, 2015.
What to include on a P11D?
Broadly speaking, every perk you have provided to your employees in the last tax year. Fields on the P11D form include company credit cards, company cars, and mileage, relocation expenses, medical cover as well as general expenses.
You can view the form here, P11d form (PDF).
As with most tax filings, HMRC is ready and waiting with the penalty hammer should you file late or incorrectly. If you miss the deadline of July 6th (either online and on paper) you won’t incur penalties straight away – you have about a fortnight to put things right and file. Should July 19th come and go and your P11D is still nowhere to be seen, your company (not you personally) will incur fines of £100 per month (or part month) per 50 employees. If you still haven’t filed by November, HMRC will send you a polite reminder, along with details of all the penalties you’ve accrued up until then. If your P11D is incorrect you could also face fines – but only if HMRC believes you deserve them. If your mistake was genuine and HMRC believes you took reasonable care before filing you most likely will not face any fines, however penalties of 30%, 70% or 100% of the owed tax can be applied if HMRC believes you acted carelessly, deliberately mislead them or attempted to conceal your true liabilities.
Here is more guidance for employers who provide expenses or benefits to employees or directors on what to include on P11ds form and how to submit the form and make payment to HMRC.