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Forms P11D

HM Revenue & Customs are increasing their general tax collection efforts and particularly the area of Benefits in Kind and employer compliance, so as a result it is likely your business will be affected.

Des Pearson, Tax Compliance Manager at HSKSG explains, “Forms P11D are often not given the due consideration they deserve by employers.  Penalties are harsh and the basics can easily be overlooked.  often it is only when HMRC decide to conduct an Employer Compliance Review that employers find this out, which of course is too late!”

More information on P11D can be found below. However please contact us if you are unsure of whether or not you should be preparing forms P11D.  We can also assist in the preparation of submission of dispensation applications to HMRC. Don’t wait until HMRC visit for an Employer Compliance Review!

Forms P11D should be completed for all company directors and most employees who receive benefits or have their expenses reimbursed.

Fines for non compliance:

Filing your P11D(b) late – penalty of £100 per 50 employees for each month, or part month, your return is outstanding after the 6 July deadline.

P11D(b) remains unfiled for more than four months – a penalty notice is issued shortly after 6 November and again the following March and July, if necessary.  Over time, the penalty builds up because you have not filed your P11D(b) on time and is calculated at £100 per 50 employees for each month or part month if you delay filing your P11D(b).

Incorrect completion of forms P11D – penalties of £3,000 per P11D per year and penalties for non-submission of forms P11D due are up to £300 per P11D per year.

What is a benefit in kind? 

The basic rule is that if you provide an employee with anything other than salary it may count as a benefit, and you will need to check whether you need to report it to HMRC and pay tax and/or national insurance on it to HMRC.

Common examples of expenses and benefits include company cars and health insurance.

Dispensation

A dispensation is a notice from HMRC that removes the requirement for the employer to report certain expenses and benefits at the end of the tax year on forms P11D (or P9D).  There is also no need to pay any tax or National Insurance contributions on items covered by a dispensation.

It also removes the requirement for employees to submit claims for deductions against expenses reported on forms P11D.

The main expenses routinely covered by dispensation are:

  • Travel, including subsistence costs associated with business travel
  • Fuel for company cars
  • Hire car costs
  • Home phone expenses
  • Business entertainment expenses
  • Credit cards used for business
  • Professional fees and subscriptions

Meet our experts

Anshu Mehan

Anshu Mehan FCA CTA TEP

Director - Taxation Services

Derby

Martin Tomes

Martin Tomes CTA

Director - Taxation Services

Nottingham

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