If you paid any benefits or expenses to your employees or directors during the tax year, you are required by law to file form P11D with HMRC. One P11D form must be filed for each employee or director to which you provided benefits or expenses.
Most companies with full-time employees will need to file P11Ds. The only instances where this might not be necessary are if:
- there are no taxable expenses, payments or benefits to be returned for any employees or directors;
- the expenses and benefits have been taxed through your payroll;
- the expenses or benefits in kind are covered by a PAYE settlement agreement.
P11D forms must include all expenses and benefit payments made throughout a tax year, and must be filed with HMRC by 6th July 2020. There are penalties for late or careless filing, or for deliberately submitting incorrect returns.
For each P11D form you submit to HMRC, you are also required to file a form P11D(b). These forms are necessary to notify HMRC of how much Class 1A National Insurance you are due on your benefits and expenses payment.
You will need to submit a P11D(b) form even when you paid tax on benefits and expenses through your payroll.
Forms P11D and P11D(b) for the current tax year will be made available to download at these links from HMRC’s website in April.
It is worth noting that smaller gifts under £50 per employees can be considered as trivial benefits (as long as they fulfil some requirements), so they don’t have to be disclosed on P11Ds or be covered by a PAYE settlement agreement.
Completing P11Ds can be complicated and time-consuming, especially for companies with a large headcount. Our advice is to always keep good records of any expenses or benefit payments and start filling the forms with reasonable advance in order not to risk missing the July 6th deadline and incur into penalty payments.