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P11D to submit – Expenses and benefits

Overview

At the end of the tax year employers will usually need to submit a P11D form to HMRC. It has to be submitted for each employee they have provided with benefits or paid expenses.  

What is the P11D form?

The P11D is a form that employers must file to report benefits paid to their staff. It needs to be filed because benefits, like salary, might need to be taxed. HMRC use the P11D to adjust employees tax codes so that they pay the right tax. So its important that its right.

When employers need to submit the P11D to HMRC?

The deadline to submit the P11D is the 6th July 2021. The P11D covers the tax year from 6th April 2020 to 5th April 2021. 

Benefits to include in the P11D

  • Company Car and fuel: Employees have a taxable benefit in respect of any private use of a car provided by an employer. It’s calculated according to number of factors, such as the list price of the car, the CO2 emission, etc. A separate benefit will also arise where private fuel costs are reimbursed by the employer. 
  • Living accommodation: There will usually be a taxable benefit for the employee if he occupies a property provided to him by his employer. Likewise, if the employer pays household bills on behalf of the employee, this will give rise to an additional benefit.  
  • Loans to employees: When a company lends money to an employee and no interest is charged or the interest rate is less than the HMRC’s official rate, this is likely to give raise to a taxable benefit. However, if the employer makes a loan to an employee and it never exceeds £10,000 throughout the tax year, the taxable benefit is zero. Note that if more than one loan is provided to the employee, the £10,000 rule refers to the aggregate of all loans in the year.  
Miscellaneous benefits

There are also many other benefits that need to be included on a P11D

  • Van: The use of an employer-owned van is a taxable benefit if the van used for private journeys by the employee. The value of the benefit is a flat rate of £3490 (£3,500 21/22 tax year). If employee pays employer to use the van privately or employee cannot use the van for 30 days in a row, it can be reduced. Where there is a chargeable benefit in respect of the van, there will also be annual charge of £666 (£669 21/22 tax year) for the fuel.  
  • Private medical insurance: Medical or dental treatment or insurance provided to employees will be a taxable benefit. That said, periodic medical checks or health screening (up to one a year) are exempt.  
  • Mileage allowance: Mileage allowances are paid when an employee uses his own car for work purpose. Amounts paid below the tax-exempt limits listed below are not classed as a benefit. However, if allowances are paid above these limits the employee will have a taxable benefit. 
Vehicles Frist 10,000 business miles Additional business miles 
   
Cars 45p 25p 
Motorcycles 24p 24p 
Bicycles 20p 20p 
Tax exempt benefits (examples)

Here are some examples of benefits that are not taxable:

  1. Employer’s contribution to the employees’ pension scheme 
  1. The reimbursement of removal expense is exempt, up to a maximum amount of £8,000 
  1. The provision of workplace parking  
  1. Subsidised staff canteen, as long as the canteen facilities are available to all employees 
  1. The provision of a mobile phone and associated calls is a tax-exempt benefit 
  1. Christmas party or other similar annual function for employees, will not give rise to a taxable benefit for the employees. Note, the costs of the party did not exceed £150 per head 
  1. Long service awards of up to £50 per year of service. The employee must have at least 20 years service 
  1. Tax-exempt payments to an employee in respect of additional costs incurred for working at home, if certain conditions apply.

There are many more benefits, not listed. Contact us directly for more information.  

For minor, irregular, or impracticable expenses or benefits, the employer may consider making one annual payment to cover all the tax and National Insurance for the employees. This is known as a PAYE Settlement Agreement. 

 For any further information – Contact us 

Overview At the end of the tax year employers will usually need to submit a P11D form to HMRC. It has to be submitted for each employee they have provided with benefits or paid expenses.   What is the P11D form? The P11D is a form that employers must file to report benefits paid to their staff. It needs to be filed because […]

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