The P11D deadline is fast approaching with the deadline only a few days away on the 6th of July. It is really important to spend the time ensuring this form is correct because late or incorrect submissions can result in penalties issued by HMRC and could even trigger a compliance review.
What is a P11D?
A P11D is a form that employers are required to submit for employees who receive benefits and expenses throughout the year, these are known as benefits in kind.
Benefits in kind may constitute a variety of benefits such as healthcare, company car or interest free loans.
A cash amount is attributed to these benefits which effectively increases the employee’s salary. This may mean that additional national insurance is payable as a result of the benefits. The national insurance is payable by the company and not the employee.
Who should complete a P11D?
A P11D must be filed for each company director or employees who earn over £8,500 per year. P11D’s are filed by the business (e.g. the employer) and are not the responsibility of the employee to complete and file.
If you don’t pay any benefits to staff or directors except expenses incurred directly by the employee it may be possible to obtain a dispensation from HMRC. This will mean that you are then not required to submit a P11D each year.
If you are continuing to submit P11D’s each year but do not receive any benefits obtaining a dispensation is a great way or cutting red-tape and reducing your time spent preparing paperwork.
When should it be completed?
The P11D filing for the tax year 2014/15 is due on the 6th of July. If you submit the P11D late you will incur a fine of £100 per each month you are late for every 50 employees.
You have until the 19th of July to pay any additional national insurance due as a result. If this is not paid on time interest will be charged at the statutory rates.
Common mistakes when completing P11D’s
Expense repayments – expenses re-paid to directors and employees should be included on the P11D even if they do not constitute a benefit to the employee.
Directors Loan Account – If you are a director with an overdrawn directors loan account a notional interest charge will be made to the overdrawn balance with national insurance payable on the interest element.