What are forms P11D Expenses & Benefits?
A P11D is the form used to report expenses and benefits paid to directors and employees that have not been subject to PAYE tax. HM Revenue & Customs require your company to notify these expenses for each director or employee after 5th April each year.
Does everyone have to have one of these forms?
No, only those who fall into certain categories. HSJ Accountants can advise you further if you provide all the necessary details.
What is a P11D (b)?
A P11D (b) is the form that is sent to HMRC with the P11D showing the amount of any additional tax or Class 1A National Insurance due on the expenses and benefits. Where no benefits have been paid during the tax year ending 5 April 2023 and a form P11D (b) or P11D(b) reminder is received, employers can either:
- Submit a ‘nil’ return
- Complete the 2022/23 Employer – No return of Class 1A form to advise that they have no P11D to submit and no Class 1A return to make.
When do the forms have to be prepared and submitted?
These forms must be submitted to HMRC by 6 July following the end of the tax year.
For 2022/23 they must be submitted by 6 July 2023.
Who pays the tax on the Benefits in Kind?
The person who has received the benefit in kind pays the tax either by it being coded through PAYE or through self-assessment.
Who pays the National Insurance on Benefits in Kind?
Class 1A National Insurance is paid by the employer. The Class 1A NIC is payable to HMRC by 19 July 2023 (postal payments) – 22 July 2023 (electronic payments).
Who prepares the forms?
It is the employer’s responsibility to prepare the forms but if asked to do so HSJ Accountants will prepare them for our clients from information they provide to us and which we will request. We provide the forms to our clients for them to check and sign before we submit them to HMRC.
Who Calculates the National insurance payable?
We will calculate the Class 1A National Insurance, tell our clients how much it is and the due date by which it must be paid.
What are taxable expenses?
They are expenses which the business incurs directly but have a personal benefit to you. For example, this could be if the business has paid for expenses from which you derive personal enjoyment such as gym membership.
These expenses will show in your company bank account but, unless you have claimed them on the expenses form and submitted receipts to us, we may not know what they are and so they will not appear on your P11D. If you believe there are any of these, please call us to discuss.
What are Benefits in Kind?
As noted above, where the company incurs costs or provides assets for the private use of the director these normally result in a Benefit in Kind charge. In respect of taxable expenses, the amount to report on the P11D form is equal to the amount of the expense. Where an asset is provided for private use, the amount to report on the form is the cash equivalent value –how this is calculated is dependent on the asset in use. Both are referred to as benefits in kind.
By reporting these amounts on the P11D, this means additional tax is payable personally and potential Class 1A National Insurance is payable by the company. Generally, Benefits in Kind fall into several categories and depending on the type of benefit there may be a Class 1A National Insurance Charge.
The following are examples of taxable benefits and expenses which you should tell us about:
- Assets paid for by the company and transferred to you at no cost or below market value e.g. Personal items paid for using company cheques or credit cards and money not refunded to company
- Payments made on your behalf e.g. paying personal bills from company account or with a company credit card
- Vouchers (in the case of child care vouchers any excess over £55 per week) or credit cards e.g. using company credit cards to fund personal expenditure
- Living accommodation – the cash value of the living accommodation is regarded as a benefit
- Mileage Allowance – amounts in excess of the HMRC approved rates
- Cars, vans and/or fuel provided by the company and available for private use (in the case of vans incidental private use can be ignored)
- Low or interest free loans, often referred to as director’s loans
- Private medical or dental insurance paid for from the company account
- Assets placed at your disposal, e.g. motorcycles, holiday homes
- Professional fees, subscriptions – some subscriptions to professional bodies may be exempt
- Training – only work-related training is allowable and only if paid for or reimbursed by the company
- Telephones and mobile phones – unless the contracts are in the company’s name.
Checklist for P11D Completion
Year ended 5 April each year
- Motor cars
The following information for each car provided for private use:
- Name of director or employee
- Make and model
- Engine capacity
- CO2 emission for the car
- Fuel type (Petrol, Diesel or Electric)
- List price when first registered including accessories (if known)
- Date when vehicle first registered
- Period when vehicle available for use by director/employee
- Whether private fuel is paid for by the company
- Whether other motor expenses are paid for by the company
- Did the director/employee make good any of expenditure mentioned above? If so, please provide details
- Vans made available for private use:
For each employer owned van:
- Dates of availability to employees/directors for private purposes. (Journeys from home to place of work are private but following a change in the rules are now treated as merely incidental). However, such things as regular trips to the supermarket for the weekly shopping are counted as private use
- Date when van first registered
- Full details of all shared vans (i.e. dates and employees).
- Other vehicle expenses:
- Expenses paid in respect of an employee or director’s private vehicle
- Mileage allowances paid including those paid within the fixed profit car scheme. Details of mileage allowances paid within a valid dispensation are not required to be included on form P11D but a note of the amount of these allowances paid during the tax year should be given to relevant employees who may wish to make a car expenses claim personally
- Beneficial loans to employees and directors:
If the total amount outstanding on all loans to any one employee or director is not more than £5,000 at any time in the year no disclosure required. If this is not the case, then please supply details of the amounts outstanding at 6th April and the following 5th April, together with details of all movements on the loan during the year. If any interest was paid by the director/employee to the employer in respect of the loan, please confirm the dates and amounts paid. If any loans to employees or directors were written off during the year, please supply full details.
- Private medical costs:
The cost of any private medical insurance premiums and expenses paid for by the employer on behalf of any employee or director.
- Any other Benefits in kind:
To find out how HSJ Accountants can help you with any declarations of Benefits in Kind you as an employer need to make – Contact us.
This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.