TAX BASICS

What is p 11 d? Everything you need to know.

For employers who give perks or costs to their workers, directors, or family members or household members. The p 11 d deadline for filing is July 6th of the tax year.
In the tax year ending on April 5th, you must submit an end-of-year report to the HMRC. For each employee to whom you have granted expenses or perks throughout the tax year.

What is p 11 d?

Employers must submit a P 11 D form to the HMRC in the UK. Which details the monetary worth of any work-related taxable costs and taxable benefits you have received over the course of the tax year. The only items on this list are any additional perks or costs that have not been previously included in your pay. If any of these expenditures apply to you. Your employer will provide you with a copy of the P 11D form. Which you should review and maintain for your records. However, if you do not receive any taxable costs or benefits. It is also possible that you will not receive the form at all.

What are the exemptions and benefits reported in P 11 D?

Generally speaking, any items that the company pays for and from which the employee, director, or a member of their family or household benefits must be on the P11D form. Some examples of expenses and benefits which you should report to the HMRC includes the following:

  • Company cars
  • Loans for rail season tickets
  • Other loans
  • Health insurance
  • Assets provided to an employee that have significant personal use
  • Self-Assessment fees paid by the company
  • Non-business travel expenses
  • Non-business entertainment expenses

Certain business expenses are exempt, including:

  • Business Travel
  • Business entertainment expenses
  • Credit cards used for business purposes
  • Fees and subscriptions

What’s the difference between P 11 d and P11d(b)?

P11d and P11d(b) are the two sections that make up the form. Essentially, the P11d is an individual form for each employee, and it describes the monetary equivalent of the benefit in kind delivered during the course of the tax year (April 6th – April 5th), whereas the P11 is a group form.

The P11d(b) is the employer’s form, which summarises the information included in the employees’ individual P11d forms and states the total amount of taxable benefits supplied by the firm and the amount of tax owed.

Who needs to file a P11D?

P11D submission is the responsibility of the employer and not of you as an employee. However, in the case of many freelancers and contractors, the two are similar.

P11D penalties for late filing

If you file your tax return late or inaccurately, HMRC will be ready and waiting with the penalty axe. Let’s say you failed to file by the deadline of July 6th, either online or on paper. In such a scenario, you are not penalised immediately. But instead, you will have around a fortnight to rectify the situation and resubmit. However, the firm (not you individually) will be fined £100 per month (or part month) for every 50 employees if July 19th comes and goes and your P11D is still nowhere to be found.

HMRC will give you a reminder, as well as a list of all the penalties you’ve accrued up to that point. If you haven’t filed your return by the end of November. If your P11D is wrong, you may also be subject to fines. But only if HMRC determines that you are deserving of them.

Depending on whether your error was genuine and whether HMRC feels you exercised reasonable care before submitting, you may not be subject to any fines. However, if HMRC believes you acted recklessly, intentionally deceived them, or attempted to conceal your genuine responsibilities. They can impose penalties of 30 per cent, 70 per cent, or 100 per cent of the tax payable.

What is the p11d deadline?

P11D filings are not reliant on your firm’s fiscal year. Hence, you have to submit them by July 6th following the tax year. For the tax year April 6th 2020, to April 5th 2021. Your P11D deadline was July 6th 2021. Hence, anything after that is considered late.

In July of each year, businesses are expected to notify HMRC on a variety of transactions and activities. P 11 D returns are only one of the tax deadlines that a businesses has to meet each year. These are the ones that fall on July 6th:

  • P11D returns are expected on July 6th.
  •  July 6th is the last day to agree on PAYE settlement agreements for the previous tax year.
  • On July 6th, all corporations must notify HMRC of a wide range of share and securities transaction.
  • July 22nd – Any class 1a National Insurance due on expenses or benefits must be paid to HMRC (July 19th if paid by cheque)

What if I don’t receive a P11D? 

It’s possible that you will not receive a P11D from your company because it is not a form that they must provide.

If they do not supply you with a P11D, they must inform you how much each benefit you have received is worth.

Let’s say your employer deducts the amount of tax you owe on your benefits from your pay. In such a scenario you will not receive the P 11 D.

Do I have to pay tax on all work benefits? Are there any exemptions?

Generally, employees have to pay tax on the majority of the employment perks they receive. However, the HMRC is lenient in situations such as:

  • Fees and subscriptions
  • Travel for business, recreation, and subsistence are all included.
  • You can receive trivial benefits of upto £50. Unless they are part of salary sacrifice arrangement.

What Records should I keep?

It is the responsibility of the employer to keep a detailed record of all expenses and benefits provided to your employees.

Your records must verify that you have reported appropriately and that your end-of-year forms are complete and accurate.

What you should retain is as follows:

You’ll need to keep track of the following things:

  • The date and specifics of every expense or benefit you offer
  • Whatever information that is required to calculate the amounts you have listed on your end-of-year tax forms
  • Any contribution from your employee to an expense or benefit
  • It’s also a good idea to save any correspondence you’ve had with HMRC.
  • You have to retain the records for another three years following the end of the tax year to which they relate.

Sidharth Bharthan Menon
CEO, taxtotal​