All About P11Ds

Employers and tax advisers face deadlines all year round, and with July approaching, all hands are on deck to ensure that P11Ds are filed correctly and on time with His Majesty’s Revenue and Customs (HMRC).

This article therefore provides some information on the purpose of a P11D, expenses and benefits to be reported and other information that will be relevant at this time.

Purpose of P11Ds

A P11D is a form used to report expenses and benefits paid to employees (including directors) by an employer. A form is completed for each employee that receives expenses and benefits; however, employers are also to complete a P11D(b) which summarises the expenses and benefits for all employees.

Employers are expected to share completed P11Ds with the relevant employees or directors for their review and record, and any Income Tax due on the reported benefits is usually collected through an adjusted tax code from HMRC in the next tax year. It is pertinent to note however, that the information from the P11D should be included in a Self-Assessment tax return where the employee is required to file one. This is why a P11D form is not required where the expenses or benefits are paid for the employee and taxed through the employer’s payroll.

The information from the P11D(b) on the other hand shows the total expenses and benefits paid by the employer as well as the National Insurance Contribution (NIC) due in this regard. The NIC calculated in this form is payable by the employer after the tax year ends by 6 July annually. Unlike the P11D, a P11D(b) form and the NIC are still applicable even where expenses, benefits, and the tax due are handled through payroll by the employer.

Expenses and Benefits to be Reported on P11Ds

Expenses and benefits provided by employers to employees or directors should be reported on a P11D. Where the employer also provides these expenses or benefits to their employee’s or director’s family or household, they should also be reported on a P11D. Spouses, civil partners, children (including their spouses or civil partners), parents, servants, dependants, and guests are considered family or household for this purpose.

The following shows a list of some expenses and benefits that should be included on a P11D:

• Cars or vans transferred to employees
• Property, goods, or other assets transferred to employees
• Payments that should have been paid by the employee but were paid by the employer instead
• Income provided to employees through third-party arrangements e.g. vouchers, credit tokens, readily convertible assets
• Living accommodation provided by employer
• Mileage allowance payments not taxed through payroll
• Cars and vans made available for use including private use
• Car and van fuel
• Notional loans, interest-free or low interest loans to employees
• Private medical insurance premiums and treatment including dental expenses
• Relocation expenses and benefits over the maximum allowable amount
• Assets and services placed at the employee’s disposal
• Subscriptions and fees
• Educational assistance, scholarships
• Entertainment costs for client and employees
• Income Tax paid on behalf of a director

Expenses and benefits such as phone bills, business travel, uniform, and tools for work need not be reported on the forms where the employee is paid the benchmark or special rate as approved by HMRC as part of their earnings or the employer is simply making a reimbursement of the employee’s actual costs.

Relevant Deadlines, Penalty, and Interest

P11Ds and P11D(b)s should be completed and filed with HMRC on or before 6 July following the end of the tax year. Employees should also be given a copy of the P11Ds by this date and employer’s NIC paid by 22 July or 19 July (for payments by cheque).

Late filing of the P11D(b) results in a penalty of £100 for every fifty (50) employees for each month or part month the form is late. There are also penalties and interest for late payments to HMRC.

Record-Keeping Requirements

Employers are required to keep a record of the following information for three (3) years from the end of the tax year that they relate to:

• The date and details of every expense or benefit provided
• Any information needed to work out the amounts included on your end-of-year forms
• Any payment employees contribute to an expense or benefit
• Any correspondence you have with HMRC in this regard.

Looking Ahead

It is important to note that the government has announced the introduction of mandatory payrolling for most expenses and benefits, and employers will be required to comply in this regard from April 2027. This would therefore mean that where employers provide expenses and benefits to their employees, the Income Tax and NICs due from the employee and employer will be payable monthly from this date. Therefore, adequate planning and preparation should be undertaken to ensure payroll systems are ready for this change.

Completing and filing P11Ds and P11D(b)s need not be complicated. Therefore, whether you are an employer concerned about compliance or an employee that needs support in ensuring their P11D form includes the right information, please contact us today on 0151 709 9999 or email info@amyerson.com, to discuss how we can help you.