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A P11D form should be completed if an employer provides taxable benefits in kind to their employees. Common benefits that might be provided are as follows:
- Company cars, vans and fuel
- Living accommodation
- Medical insurance
- Interest-free or low interest loans
A P11D(b) form should also be prepared to summarise the total taxable benefits provided and to show the class 1A national insurance due by the employer. Class 1A national insurance is payable at a rate of 13.8%.
The forms should be completed on an annual basis to report benefits provided in a tax year.
The income tax payable by the employee is collected via an adjustment to their tax code. The tax code is update once the P11D forms have been submitted to HMRC.
The deadline for submitting the P11D and P11D(b) forms to HMRC for the 2020/21 tax year is 6 July 2021. This is also the date that an employer should provide employees with a copy of their P11D form. If the forms are filed late, the employer may be charged a penalty of £100 per 50 employees for each month that the P11D(b) has not been filed.
Payment of class 1A national insurance due should be made to HMRC by 19 July 2021 if paying by cheque or 22 July 2021 if paying electronically. If the national insurance is paid late, HMRC may charge late payment penalties and late payment interest.
Alternatively, employers are able to report the benefits in kind they provide to their employees through the payroll system. This means the benefits can be reported on a real time basis rather than making a report at the end of the year.
Employers must register with HMRC to use the payrolling benefits service. The employer must register before the beginning of the tax year in which they wish to use the service.
Not all benefits can be reported through the payroll. Living accommodation and beneficial loan benefits should still be reported on a P11D form after the end of the tax year.
For benefits reported through the payroll, a P11D is not required. However, a P11D(b) form should still be filed to summarise the benefits provided and report the class 1A national insurance due.
For any queries on reporting benefits in kind, please get in contact with our P11D Expert, Holly Gough, who is based in our Taunton office and can be contacted by telephone on 01823 62 44 50 or email email@example.com.