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If you run a business, you might provide benefits, or non-exempt expenses, to some or all of your employees. If you do, it is important to be aware of the annual P11D form that needs to be completed and sent to HM Revenue & Customs (HMRC) by the deadline of 6 July 2020.
Before doing so, you will need to know what you need to report and if you need to pay tax and National Insurance (NI) on the benefits or expenses.
A P11D is a form used to report benefits provided and expense payments made to employees, by employers that are not putting it through the payroll.
The annual form allows businesses to report benefits that employees have received from their employer in addition to their salary, for example, company cars, health insurance, living accommodation and beneficial loans.
There are some benefits which can be provided tax-free, such as the provision of a mobile phone, social functions for staff and other ‘trivial benefits’, although there are various conditions that need to be met first.
Understandably, the whole process of filling out the forms for P11D poses a significant burden for business owners and managers.
To further complicate the task, the rules governing the taxation of different expenses and benefits change regularly and each is subject to their own separate rules. For the full list of expenses and benefits that you need to report, please click here.
Completing P11D returns can be time-consuming and complex, especially if you cover a lot of expenses or have a large workforce, which is why it makes sense to outsource this task to specialists.
To find out how we can relieve the burden on your business, please speak to us.