If you’re an employer and provide expenses or benefits to employees or directors, and haven’t recorded them through your payroll, you might need to tell HM Revenue & Customs (HMRC) and pay tax and National Insurance on them.
Examples of expenses and benefits include:
- company cars
- health insurance
- travel and entertainment expenses
There are different rules for what you have to report and pay depending on the type of expense or benefit that you provide.
You must keep a record of all expenses and benefits you provide to your employees as HMRC may ask to see evidence of how you accounted for each expense or benefit at the end of the tax year. Records must be kept for 3 years from the end of the tax year they relate to.
Reporting and paying
At the end of the tax year you’ll usually need to submit a P11D form to HMRC for each employee you’ve provided with expenses or benefits.
|What you need to do||Deadline|
|Submit your P11D forms online to HMRC||6 July following the end of the tax year|
|Give your employees a copy of the information on your forms||6 July|
|Tell HMRC the total amount of Class 1A National Insurance you owe on form P11D(b)||6 July|
|Pay any Class 1A National Insurance owed on expenses or benefits||Must reach HMRC by 22 July (19 July if you pay by cheque)|
Remember you’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late. You’ll also be charged penalties and interest if you’re late paying HMRC.
If you have any queries on whether you need to complete P11Ds, or to discuss any of the points raised in this blog please get in touch with me here, or:
01738 441 888
The information in this blog should not be regarded as financial advice. This is based on our understanding in June 2018. Laws and tax rules may change in the future.