P11D Form Explained

March 11 2016, 1 Comment

What Is A P11D?

The P11D is an expenses and benefits form that needs to be completed by all employers in the United Kingdom. The form - which must be sent to the HMRC - is to report end-of-year cash-equivalents of expenses and benefits. It must be filed by employers, for their employees and also directors if they earned £8500 or more for that accounting year unless a dispensation has been applied for from HMRC.

The Form 

The form is broken down into the following 14 separate sections, which all need to be accurately filled in where applicable. These are as follows:

  • Section A – Assets Transferred
  • Section B – Payments made on behalf of the employee
  • Section C – Credit Cards and vouchers
  • Section D – Living Accommodation
  • Section E – Mileage Allowances
  • Section F – Cars and car fuel
  • Section G – Company Vans
  • Section H – Beneficial Loans
  • Section I – Medical Health
  • Section J – Qualifying Relocation Payments
  • Section K – Services Supplied
  • Section L – Assets placed at employee’s disposal
  • Section M – Other Items
  • Section N – Expenses Payment

Why Is It Needed?

 The P11D is required as it stands as an indicator to let HMRC know about what they classify as ‘Benefits in Kind’. This accounts for services or items paid for by an employer, as the benefits potentially increase an employee’s salary. As a result, there could be National Insurance contributions that need to be paid on them by the employer. 

Typically, these benefits include:

  • Private healthcare insurance
  • Company cars
  • Travel expenses
  • Accommodation
  • Entertainment costs
  • Interest free loans from the company
  • Childcare

What You Should Keep

  • The date and details of all expense or benefit owners provide
  • Any payment your employee contributes to an expense or benefit
  • Any information needed to work out the amounts for the end of year forms

It is highly important that an accurate record is kept. All records should be kept in an organized manner and you can use accounting software to easily manage this. As well as submitting a paper version for your original form, you can also complete a P11D using software or through HMRC’s online tools found on their website.

What to Be Wary Of

The deadline for the P11D form is July 6th and as with all tax forms, there are financial penalties for any late completions. If the date is missed, a further two weeks can be received to complete the required documentation for each individual employee (July 19th). Regardless of the reasoning, if after that the forms are still not submitted, the business in question will be hit with a £100 fine per 50 employees. This fine will continuously build each month before a reminder is set in November outlining the outstanding, accumulated £400 penalty.

Businesses may also be subject to penalties and interest for incorrect P11D forms, depending on whether it is evident and deemed that they are deliberately being misleading with their liabilities.

 It is crucial that the correct name, D.O.B, NI and gender of an employee is entered. As simple and obvious as that sounds, any mistakes will result in a form being rejected and you could face late fees. The same applies for entering the company car where the cash equivalent is necessary. Other common mistakes typically come in the form of incorrect data when its comes to usages such as credit cards which the company has reimbursed employees for. Any oversight in inputting data, even if its minor, will lead to rejection which further highlights the need to be prompt and accurate when completing the form.