Whether you’re employed, self-employed, or an employee yourself – dealing with the tax office (HMRC) can leave you swimming in paperwork and holding on to forms that you’re not quite sure what to do with, or even if you need to keep them. We’re going to have a look at some of the different forms issued by the tax office, what they’re for, what they cover, how important they are, and how long you need to keep them. We’re starting with the P11D
A P11D is a form provided by HMRC is used by employers to show an individual’s year end expenses (also referred to as ‘company benefits’ or ‘benefits in kind’).
Employers must fill in P11D forms for every employee that is earning £8500 or more during the tax year and is in receipt of an applicable company benefit. Not every employer will provide a P11D to their employees, but they must have the information available upon request; and the employer is responsible for providing the forms to HMRC by 6 July of the relevant tax year.
The form then gives the tax office the details they need to update a person’s Pay As You Earn (PAYE) record, and aids them in calculating how much tax is due, and what the correct tax should be for that person.
For individuals who are also required to fill in a self-assessment tax return, the details on the P11D must be entered into the employment page on the return that relates to the relevant tax year.
There are 14 sections covered on the P11D, and employers are required to fill them out as appropriate. Employers need to have specific information for each section and will also need to know whether they are subject to Class 1A National Insurance – most employers pay Class 1A contributions on most benefits, and on the P11D form, these requirements are labelled with a brown ‘1A’ box.
The sections (A-N) cover:
This may include cars, property, goods, or other assets. Employers will need the cost or market value of these assets, the amount from which tax was deducted, and the cash equivalent or relevant amount (1A).
Payments made on behalf of the employee
Details of the payments made, and any tax on notional payments that has been made during the year but not borne by the employee within 90 days of the end of the tax year (5 April)
Vouchers and Credit cards
Details of qualifying payments (including qualifying childcare vouchers) must be entered with the gross amount, the amount made good from, and the cash equivalent.
The cash equivalent or relevant amount of accommodation provided for an employee or their household (1A).
Mileage allowance payments not taxed at source
The taxable amount in excess of the exempt amount (where it’s not been able to be taxed under PAYE).
Cars and car fuel
Details of the car (make, model, date first registered), approved CO2 emissions, approved zero emissions mileage (if applicable), engine size, fuel / power type, dates the car was available, list price of the vehicle, accessories (non-standard), employee contributions to the cost of the car, employee payments for private usage (if applicable), date free fuel was withdrawn, cash equivalent for car (1A) and for fuel (1A).
Vans and van fuel
Total cash equivalent for vans made available (1A) and fuel made available (1A).
Interest-free and low-interest loans
The number of borrowers, outstanding amounts, maximum amount outstanding at any time in the year, total interest, date the loan was made or discharged (if applicable), and the cash equivalent after interest paid by the borrower (1A).
Private medical treatment or insurance cost, amount made good, and cash equivalent (1A).
Qualifying relocation expenses, payments, and benefits
The excess over £8000 of relocation expenses and benefits for each move (1A).
The cost to the employer, amount made good, and cash equivalent or relevant amount (1A) of services supplied to the employee.
Assets placed at the employee’s disposal
Description of the asset, the cost of the benefit, the amount made good (from which tax has been deducted), and the cash equivalent or relevant amount (1A).
Other items (including subscriptions and professional fees)
Descriptions of the other items, their costs, amount made good, cash equivalent (1A), and the income tax paid (but not deducted from director’s renumeration) where applicable.
Expense payments made to or on behalf of the employee
Qualifying travelling and subsistence payments, entertainment, use for home phone, and non-qualifying relocation expenses should be entered here, as well as any other appropriate expenses.
What To Do with Your P11D Once You Get It.
If an employer provides you with a P11D, it’s important to check it carefully – make sure the figures are correct, as this will affect the amount of tax you pay, and incorrect figures could result in an over or under-payment of tax.
If the figures are incorrect, employers can submit a correction to HMRC – however, they must make sure to completely fill the form in, and not just submit the corrected amount (the data on the corrected form will overwrite the previously submitted one).
The P11D form should be kept filed with your accounts, and kept safe – as it provides data you might need (for self-assessment tax return filing), and a record of the benefits you’ve received from your employer.
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