A Guide to the P11D Form

A P11D form is designed to provide HMRC with details of specific taxable benefits in kind that have not already been included on the payroll, but the exact rules covering what needs to be included are lengthy and complicated. So, what do you need to know before filing your P11D?

What is a P11D? 

You’ll need to file a P11D form if you’ve received any benefits in kind; as benefits in kind effectively increase your salary, there may be National Insurance contributions to be paid on them.

As well as some basic identifying information, such as name, date of birth and National Insurance number, you’ll also need to include the value of any benefits you’ve received on top of your salary when completing your form. This could include accommodation, cars and fuel, mileage, loans, relocation expenses and more. HMRC will use the information provided to calculate if you owe any tax on these benefits.

It should be noted that P11D filings aren’t dependent on your company year and must all be filed by 6 July following the tax year in question. So, your P11D for the 6 April 2021 to 5 April 2022 tax year must be filed by 6 July 2022. If you fail to do this, you can expect to receive fines of £100 per month or part month per 50 employees. You’ll also be charged penalties and interest if you’re late paying HMRC.

Be sure to include the figures from your P11D in your self-assessment. If you don’t, your tax return will be incorrect, and you will usually not pay enough tax.

Who needs a P11D? 

Anyone who earns £8,500 or more during the tax year and who received company benefits that are classed as extra income will need to file a P11D.

Benefits that can be included in the P11D 

Generally speaking, any non-payrolled items your company pays for and that you benefit from need to be included on the P11D form. In total, there are 14 sections on the form covering expenses, including company cars and vans, health insurance, beneficial loans and assets transferred. Living accommodation, credit cards and vouchers, and qualifying relocation expenses are also on the list. The taxable amount will depend on the type of benefit involved as there are different rules for different types. 

P11D exemptions 

In 2016, an exemption system was introduced, which means that many business expenses incurred personally no longer need to be recorded on a P11D form. Exempt expenses include business travel and entertainment, fees and subscriptions, and ‘trivial’ benefits up to £50 unless they’re part of a salary sacrifice scheme.

P11D common mistakes 

P11D forms can be complicated, and mistakes do happen. The handling of director’s loans is one area that can cause problems. If your director’s loan account is overdrawn by more than £10,000 at any point in the tax year, the overdrawn amount is effectively a loan from the business and is treated as an employment-related benefit. This means it must be included on the relevant director’s P11D form.

Phone calls are another area to watch as situations where the company has repaid the costs of calls made from personal devices can be overlooked. Keeping a note of all your business phone usage or getting a separate company phone is recommended.

Also, be aware that if your P11D is incorrect, you may face a fine unless HMRC accepts it was a genuine mistake. If they suspect you acted carelessly, aimed to deliberately mislead or attempted to reduce your tax liabilities, penalties of 30%, 70% or 100% of the owed tax can be applied.

If you discover you need to correct a mistake on the form, HMRC requests that you include all the benefits and expenses for the tax year, not just the ones you want to change. In this case, you must submit a paper form, even if you originally submitted online.

Of course, the detail you record on your P11D form is only as good as the data used to complete it, so make sure you keep your records up to date and stay on top of your accounts throughout the year. The right accounting software can make it much easier to achieve this quickly and effectively.

To find out more about how AccountsPortal can help, contact us today.