As the 6th July deadline for P11D filings approaches, payroll teams are reminded of the importance of both timely and accurate submission, and the implications and penalties that failure to comply can cause.
Our payroll experts have created this short guide into P11D compliance to help payroll services navigate this tricky piece of administration, and ensure that your business doesn’t fall foul of HMRC for tax year just closed.
What is a P11D Form?
If you or your employees benefit from any payment in kind from your company you are obligated to report these expenses and benefits to the tax-man in the form of your end of year expenses report. This applies to both employees and company directors.
What should be included on the P11D form?
Anything that the business pays for and in which the employee benefits from must be reported to HMRC via the P11D form. This includes any company vehicles, private health packages or the likes of loans for rail ticket travel or cycle to work schemes. Other non-financial benefits like expenses and travel costs that aren’t related to company business also must be included in the P11D.
Some examples of what should be included in the P11D form:
- Company vehicles
- Interest-free loans (for example rail travel or cycle to work schemes)
- Other loans (for example, Director’s loans)
- Private health packages
- Gym memberships
- Assets that have significant personal use
- Expenses or travel costs not related to company business
This isn’t an exhaustive list. All items or services the business provides employees and directors with, which have a financial benefit must be included. Furthermore, if these benefits can be considered an increase in salary, the employee’s National Insurance Contributions may increase, and these must be paid by the organisation.
When do I need to submit the P11D? Form?
The deadline for reporting is 6th July. P11D declarations relate to the tax year that’s just closed on 5th April. Any expenses or benefits paid out during 6th April through 5th April must be included.
Arguably it’s kind of HMRC to provide that additional few months for reporting expenses and benefits after the end of the tax year, many payroll professionals do consider P11D reporting an additional filing burden that they could do without.
Who do I need to report on within the P11D form?
You are obligated to submit an end-of-year report to HMRC for each employee you’ve provided with expenses or benefits in the tax year just ended.
There are three main ways to report.
1 – Report online via HMRC’s online service
If you have 500 or fewer employees you can file via HMRC’s PAYE online service.
2 – Report by post
If you can’t access online reporting methods, you can report by post, by completing Form P11D and P11D(b), available from HMRC or linked below.
3 – Reporting online via commercial payroll software.
This method is growing in popularity and – perhaps for obvious reasons – our primary recommendation. P11D reporting can be a tedious, laborious task, one which many payroll professionals dread rolling around each year. By leveraging the slick online journeys and automations of commercial payroll software, you can take the pain out of this complex administrative task and divert your teams to higher value work.
At Qualitas, we do recognise that not all businesses have the team resources or cashflow to invest in high-cost payroll software. That’s why we offer all of our clients P11D reporting as an additional service. Take advantage of our leading-edge software investment and let us take the pain out of this manual reporting process for your payroll teams.
Take the pain out of P11D reporting
Take the pain out of P11D reporting by outsourcing to a payroll provider.
Save time on manual admin, prevent the risk of human error and fines, while taking advantage of our up-to-the minute software automations.