P11D forms have to be completed by 6th July 2019, for the text year 2018/19, with any Class 1 NICs owed paid to HMRC by 22nd July 2019. As we write this post, on 18th April 2019. That means the deadline is less than 3 months away, so it makes sense to start planning for it now, if you are an employer. If you provide expenses and/or benefits to your employees then you will almost certainly have to submit a P11D advising HMRC of these expenses or benefits now that the 2018/19 tax year is complete.
What Benefits are included in the P11D calculations?
The most common benefits that are included in the P11D calculation are:
- Company car
- Health insurance
- Travel and entertainment
What Expenses are included in the P11D calculation?
The most common expenses that are included in the P11D calculation are:
- Allowance to purchase tools for which can also be used for private use
- Clothing other than uniform or protective clothing
- Credit card, used by an employee for business and personal expenses
- Mileage payments above the HMRC approved rates (currently 45p per mile up to 10,000 miles)
- Reimbursement of mobile phone costs if the mobile phone is held privately
- Meals and travel
- Season ticket costs
- Subscriptions or memberships
- Vouchers exchangeable for cash, goods or services
The following payments should always be included in the payroll if given to employees:
- Bonus or similar types of reward
- Car allowance
- Holiday pay
What doesn’t need to be included?
There are a few items that do not need to be included in the P11 D calculation. These cover any business-related expenses incurred by an employee which are reimbursed to them in full, and include:
- Travel expenses or subsistence when on a business trip.
In addition, staff training which is work-related does not have to be reported.
What happens once the P11D form has been submitted to HMRC?
Once your P11D forms have been submitted, HMRC will send out revised tax codes to employees who have received expenses or benefits to recover any tax due. In this way, HMRC recovers the tax that is due.
As outsourced payroll experts, we know that the whole area of expenses and benefits, and the P11D forms that go with them can be complex and time consuming. We can advise you on what expenses and benefits need to be reported and we can also complete your P11D forms too.
Contact us or call us on 0121 422 0550 to see how we can help.