Completing P11D forms is an important part of bookkeeping for businesses and freelancers alike.
At Accountants East London, we regularly support our clients through the P11D process, and have compiled the following guide to provide an overview of P11D forms.
What is a P11D form?
Submitted annually, a P11D form reports any benefits-in-kind to HMRC.
Benefits-in-kind are goods or services which supplement a salary, for example company cars or private healthcare.
A salary is increased by such benefits and consequently there may be National Insurance contributions owed by the company on them. The P11D allows for these items to be reported.
Who needs to complete a P11D form?
P11D forms are completed and submitted by the employer, not the employee. Note: freelancers and contractors, being considered an employer, will also need to submit the form annually.
When and how should P11D forms be submitted?
As we’ve mentioned, the P11D form should be completed and returned to HMRC on a yearly basis.
However, slightly confusingly, P11D forms do not depend on a company’s financial year. Instead, they must be filed by 6th July after the completion of the tax year.
For example, the P11D completed for the financial year running 6th April 2020 to 5th April 2021 should be submitted to HMRC by 6th July of this year.
P11D forms should be submitted online. Businesses with up to 500 employees can use HMRC’s PAYE online service. Alternatively, HMRC’s Online End of Year Expenses and Benefits service can be used. Both tools can be found here.
HMRC offer an Employee Helpline and various booklets to assist with the process.
You can also make use of commercial payroll software to submit a P11D form. Many business owners and contractors opt for this, making use of an accountancy firm which makes annual PAYE returns part of its core offering.
What needs to be included in a P11D form?
For identification purposes, you will need to include your employer PAYE reference, the employee’s name, national insurance number, date of birth and gender.
After that, all items paid for by the company for the employee’s benefit, must be included on the P11D form. These benefits might include:
- Company cars
- Loans for rail season tickets
- Other loans
- Health insurance
- Self Assessment fees paid by the company
- Non-business travel expenses
- Non-business entertainment expenses
HMRC provide information about the type of expenses that should be included on the P11D form, and those which are exempt.
Indeed, many business expenses incurred by company employers do not need to be submitted. Some examples are:
- Business Travel
- Business entertainment expenses
- Credit cards used for business purposes
- Employer-provided childcare
- Fees and subscriptions
If you are unsure whether an expense ought to be included on the P11D form, get in touch with one of our team members for advice.
Mistakes to avoid when submitting a P11D form
It is vital you take care to complete the form accurately and in a timely fashion to avoid financial penalties from HMRC.
Also, don’t forget the P11D(b) form which tells HMRC the total amount of Class 1A National Insurance you owe (essentially summarising individual P11D forms) and must be submitted at the same time.
P11D Forms – Our Guide
So long as you are proactive and accurate in your bookkeeping, completing a P11D form should pose no problem.
Specialist knowledge is useful, however, in identifying which expenses should, and shouldn’t be included, especially when dealing with more complex expenses e.g. Directors’ Loan Accounts.
If you would like some help with your P11D form, give us a no-obligation call today.