Flexible monthly business insurance
Most of us will be familiar with some of the more commonplace paperwork that we associate with HMRC, such as a P45 or P60, or even a self-assessment tax return. One form that you may be less familiar with, but is just as important, is the P11D.
What is a P11D form?
In simple terms, a P11D form is the way in which your business declares to HMRC what expenses and benefits you have given to your employees over the course of the previous financial year, allowing HMRC to calculate how much tax and National Insurance is due.
Unlike your company accounts or corporation tax return, not every business will automatically have to submit a P11D form, but if anyone in your business has received any sort of benefits, perks or personal expenses, there is a good chance you will have to submit a P11D.
Who has to file a P11D form?
Your business needs to complete and submit a new P11D form for each ‘relevant employee’ or company director who has received any benefits-in-kind during the financial year, in addition to their salary. It is the responsibility of the employer, rather than the employee, to submit a P11D form.
What is a benefit-in-kind?
HMRC defines a benefit in kind as anything of any monetary value that the business gives to an employee or director that is not ‘wholly, exclusively, and necessary’ to perform their contractual duties. In simple terms, benefits-in-kind cover anything that the company gives to, or pays for on behalf of, an employee or director which that person benefits from.
This can include:
- Private health insurance
- A company car
- Loans for rail season tickets
- Any other kind of loan
- Gym membership
- Assets provided to an employee that have significant personal use
- Employee or director self-assessment fees paid by the company
- Non-business travel expenses or mileage allowance
- Non-business entertainment expenses
What is a P11D(b) form?
In addition to a P11D form for each employee or director in your business who has received benefits-in-kind during the year, you are also obligated to submit a P11d(b) form as well.
This form can be filled in and submitted online, or printed out and submitted by post, and it calculates and summarises all the Class 1A National Insurance you need to pay on all the expenses and benefits you've provided to employees and directors throughout the year.
Exemptions from filing a P11D form
Prior to 2016, the rules surrounding what could or could not be omitted from a P11D form meant that any omission had to be given special dispensation by HMRC in every instance.
Since then, a system of rules has come into force that permit certain blanket exemptions, meaning that you do not have to account for all expenses that your employees personally incur on a P11D form. Expenses that are exempt include:
- Company credit cards used exclusively for business purposes
- Business travel expenses
- Business entertainment expenses
- Fees and subscriptions paid by employees for business use
Other exemptions include:
- Ministers of any religion or denomination who earn less than £8,500 per year
- Carers who benefit from board and lodging at the home of the person they care for. In this case, board and lodging benefits are exempt from tax.
How to submit your P11D
HMRC makes clear that their favoured method of submission for P11D forms is online, though they accept postal submission of paper forms, only in situations where submission of an online form is not possible.
There are generally two ways in which you can submit your forms online:
- PAYE online for employers - for businesses with up to 500 employees
- HMRC-recognised commercial payroll software
If you are not able to use any of the online submission methods, then you can download a P11D form here, to print out and submit via post.
Deadlines to file and pay your P11D
The deadline to submit your P11D and P11D(b) forms is 6th July following the end of the tax year in question. For example, for the 2022/23 tax year, the deadline to submit your forms will be 6th July 2023.
The deadline to pay any Class 1A National Insurance contributions you owe for the benefits and expenses provided is 22nd July, if paying electronically, or 19th July if paying by cheque.
Who needs a copy of a P11D form?
By law, you must provide any employee or director of your business with a copy of the P11D form that relates to them, if it is applicable and they have received any benefits-in-kind.
You must provide this copy by the deadline of 6th July after the end of the tax year.
P11D for the self-employed
If you are self-employed as a freelancer or sole-trader, then you do not need to submit a P11D form, as your expenses will be included in your self-assessment tax return.
If you are the sole director of a limited company with no partners or employees, then you will effectively be in the position of being both your employer and employee, and you will have to submit P11D and P11D(b) forms each year if you have received any benefits in kind from your company. If you’re about to start a business and you’re unsure which company structure to opt for, then read our handy guide to UK company structures to learn about the different types.
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This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.