P11D forms report expenses and benefits given to employees and directors through the tax year
If your organisation paid any benefits or expenses (which are not exempt), you need to file a P11D(b). You will also need to send HMRC a P11D for each director or employee in receipt of benefits or expenses, unless you have pre-registered to report/tax expenses through payroll before the beginning of the tax year. The tax year isn’t completed until employers have produced and submitted their P11D returns.
Don’t miss the P11D deadlines
The deadline for reporting any Class 1A National Insurance Contributions (NICs) that you owe for the tax year ending 5 April 2022 is Wednesday 6th July 2022.
Additionally, class 1A National Insurance Contributions are payable by 22nd July 2022 (19th July if you pay by cheque). The April edition of the Employer Bulletin issued by HMRC, gives detailed instructions on how to do this.
Failure to report to HMRC before the deadline, means a penalty of £100 per 50 employees is payable for each month or part month that the P11D is outstanding.
Furthermore, penalties and interest are also charged on subsequent late payments so it soon becomes increasingly costly to file and pay late!
Gather all relevant P11D information in advance
Below is a non-exhaustive list of expenses and benefits you may need include in your P11D:
- Taxable expenses (including employee entertainment etc.)
- Health benefits
- Company cars
- Employee loans
- Landline telephones at employees homes
- Non-business travel
- Living accommodation
It should be noted there are exempt benefits too that don’t apply to the P11D too, these include:
- Employer contributions to a registered pension scheme
- The provision of 1 mobile phone when the contract is between the employer and the phone provider
- Car parking, either at or near the place of work
- Training costs
- Christmas party or other annual functions costing below £150 per head
- Staff suggestion scheme awards up to £5,000
- Long service awards up to £50 per year of service if served at least 20 years
- Additional costs of working from home under a homeworking arrangement
Gathering all of this information together prior to the P11D will save scrambling around before the deadline.
Options for bubmitting your P11D’s to HMRC
Previously, one of the most popular methods of P11D submission for smaller companies in recent years has been via the HMRC Online End of Year Expenses and Benefits service .
- This Interactive PDF form enabled small and medium-sized companies of up to 150 employees file their P11D’s online.
- It also provided the ability to create, edit and send P11D and P11D(b) forms, to send both electronically or by post.
- Functionality to create a Nil P11D(b) to inform HMRC that you have no class 1A National Insurance Liability
In April 2022, this PDF submission option was retired by HMRC. As a result this is no longer an available method.
Following this service’s retirement there are now only 2 options available for your P11D form submissions.
- HMRC’s PAYE Online service. This option will be the go-to choice for many of the small businesses that formerly relied on the HMRC Expenses and Benefits service. This enables P11D submissions for up to 500 employees.
- Via payroll software (based on functionality). HMRC accepts online returns from some software systems in the required format.
Consider payrolling benefits
If you registered for payrolling expenses part way through the tax year, you must still complete a P11D, stating clearly which expenses/benefits have already been taxed, in order to tell HMRC how many class 1A National Insurance contributions are due. Find out more about payrolling expenses.
Expense management software
Finally, if you approach this time of year with a feeling of dread at the amount of paperwork involved, then it’s the perfect time to consider automating your expenses. MyExpenses offers comprehensive reporting tools and category settings to assist and help you submit your P11D’s. Take a look at the MyExpenses reporting capabilities or book a demo to find out more.