What is a P11D?
A P11D is the form used to report benefits in kind paid to directors and employees which have not been subject to PAYE tax.
By 6th July each year, employers must submit a P11D for each director and employee. Any NICs owed must be paid by 19th July, or 22nd July, if paid electronically. You must also provide your employees with copies of their P11d by the 6th July.
What is a P11D(b)?
A P11D(b) is the form that is sent to HMRC with the P11D showing the amount of Class 1A National Insurance due on the expenses. If there are no benefits to report, you need to send a ‘nil’ return to avoid penalties for failure to submit the return.
What happens if I don’t complete a P11D?
Failure to complete a P11D for a director or employee could have serious consequences, including penalties. You’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late. You’ll also be charged penalties and interest if you’re late paying HMRC.
What are Benefits in Kind?
Where the company incurs costs or provides assets for the private use of the director these normally result in a Benefit in Kind charge. This means additional tax is payable personally and Class 1A National Insurance is payable by the company.
Examples of taxable benefits which you should record in your bookkeeping portal and notify us of include:
1. Company car
2. Private fuel paid for by the company
3. Private health insurance
4. Self-assessment fees paid for by the company
5. A second work mobile phone
6. Non-business travel expenses
7. Non-business entertainment expenses
8. Loans
You may come across some benefits that are not taxable, such as:
Food provided in the staff kitchen
Parking
Payments to a pension
Workplace sports facilities
Workplace safety equipment
Work-related training
Business expenses paid for on a company credit card by an employee (work related)
Where are the Benefits in Kind declared?
The value of any benefits must be reported annually by means of a P11D. These details are then duplicated on the employment pages of your personal tax returns to ensure that you pay tax on the correct amounts.
What is Class 1A National Insurance?
Certain benefits attract additional National Insurance contributions; this is known as Class 1A NIC. It’s an employer liability which is a cost to your company but does not count towards your contributions for state benefits. For 2022/2023 it’s calculated at 14.53% of the total value of any benefits liable to Class 1A, this is a pro-rata amount based on the changes during the year to the rate. This amount has reduced to 13.8% for tax year 2023/2024.
How do I pay Class 1A National Insurance?
You can pay online by:
Direct Debit (one-off payment)
Bank transfer
Debit or corporate credit card
HMRC’s website for more details
What if my P11d is incorrect?
Ultimately, it’s your responsibility to provide accurate information to HMRC. Orange Genie Accountancy will make every effort to ensure your P11D is accurate based on the information you have added to FreeAgent or provided to us if we prepare your bookkeeping. Orange Genie Accountancy will send you your P11D for approval prior to submission. You should check this thoroughly.
Once you’re satisfied that the information on the P11D is correct, Orange Genie Accountancy, as your tax agents, will submit these forms on your behalf before the July deadline.