Expenses and benefits are declared via a P11D and P11D(b). The deadline for this year’s submissions is 6 July 2021. Failure to submit on time could result in a penalty.
WHAT IS A P11D FORM?
Each year a P11D form must be filed for each employee that has received taxable benefits and/or expenses that have not been put through the payroll or included in a PAYE settlement agreement (PSA). Any benefits that are covered by an exemption do not have to be declared.
The nature of the benefit determines the amount of information that is required. Typically, this is the cost to the employer of providing the benefit, any amount paid by the employee, and the taxable amount left to pay. If an employee has certain benefits, for example, a company car and fuel or employment-related loans, more information is required.
Usually, the taxable amount is the cash equivalent value. Although, in circumstances where the benefit is made available under a salary sacrifice or other optional remuneration arrangement, the taxable amount must be worked out using the alternative valuation rules. These rules do not apply if the benefit is one of the few that is exempt.
WHAT IS THE P11D(B) FORM?
The employer must also complete a P11D (b) form to declare that all required P11Ds have been filed. It is also the employer’s statutory Class 1A National Insurance return.
It is essential when calculating the Class 1A liability that any taxable benefits within the Class 1A charge are returned on the P11D. This also includes any benefits ran through payroll. If all taxable benefits have been payrolled or included in a PAYE settlement agreement, there would be no P11Ds to file, although a P11D(b) will still be required.
Where items have been included within a PSA, they are not included in the Class 1A National Insurance calculation on the P11D(b) form. Class 1B National Insurance contributions will apply instead.
If an employer has not provided any taxable benefits in the current tax year but did in previous years, they may still receive a paper P11D(b) or a P11D(b) reminder letter. They must complete a nil declaration online on the Gov.uk website because HMRC will be expecting the form to be returned. Failure to complete the form could result in a penalty charge from HMRC.
WHAT ARE YOUR FILING OPTIONS?
There are a several ways to submit your P11Ds and P11D(b) forms. Either of the options below can be used:
- Paper forms
- Using a payroll software package
- Using HMRC’s PAYE Online Service
- HMRC’s Online End of Year Expenses and Benefits Service
The deadline for filing is still 6 July 2021 for 2020/21 regardless of the method used. You must give your employees a copy of their P11D or details of their taxable benefits by the same date.
If there is an associated employer-only Class 1A National Insurance outstanding, this must be paid by 19 July 2021 if paid by cheque, or by 22 July 2021 if paid electronically.
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