Paying and reporting employee benefits
23rd May 2018
It’s that time of year once again when paying and reporting employee benefits and expenses is on the agenda ahead of the 6 July deadline.
Most business owners with employees on their books will need to inform HMRC of any taxable benefits handed out to members of staff over the past 12 months.
This could be a company car, health insurance, any non-business travel or entertainment expenses incurred, or assets you’ve provided that have had significant personal use in 2017/18.
Each type of taxable benefit is calculated differently, depending on the type of benefit you’ve provided.
Most of these can be deducted through payroll so long as you’ve registered with the Revenue before the start of the tax year.
Do you need to complete a P11D form?
If you’ve provided taxable benefits and expenses that were not deducted through payroll, you may need to submit a P11D form.
This applies to any employees earning more than £8,500 a year and directors who receive a benefit of expense from the business.
You’ll also need to send a P11D(b) form to enable HMRC to calculate how much you need to pay in class 1A national insurance contributions (NICs), and how much PAYE is due from the employee on the benefit.
Employees who receive benefits in kind will have different tax codes, so it’s important to get this right to ensure the correct amount of tax is paid.
Can we help with your P11D forms?
Absolutely. Our team of experts can either take this complex task off your hands to ensure you remain compliant with HMRC or advise those who wish to go it alone.
The Revenue advises that most errors are caused by employers, most commonly surrounding the adjustment of employee tax codes relating to the benefit provided and the PAYE codes used.
It’s safer and cheaper to file your P11D forms with HMRC online before the 6 July 2018 deadline, and this our preferred method of submission once you’ve signed these off.
While it’s still possible to send paper returns, the Revenue will check online returns and inform us of any errors so there’s less risk they will reject your submission if we file it online.
What late-filing penalties are in place?
There’s a penalty of £100 per 50 employees for each month or part month the P11D(b) is late, with interest also charged on late payments to HMRC.
The deadline for paying class 1A NICs is slightly later, on 22 July 2018 (or 19 July if paying by cheque), and financial penalties apply if you are late.