P11D Forms and How to Submit Them

Thursday June 11, 2015

Your P11D form must be submitted by 6th July 2015.

One of most confusing areas of PAYE is the names and purposes of the different forms that HMRC need you to complete.

These forms often have impenetrable numerical names that don’t really give you any clues about what they are for  - but the deadline for completing P11D is upon us.

If you’re a RIFT Accounting client already then your Account Manager will have been through this with you and will be making sure that  everything is in hand with your P11D filing – but it’s always good to understand what is going on. If you're not yet a client and you want to switch to us, it's easy. If you're just getting started and wondering how an accountant can help you, have a look at our checklist.

The actual purpose of P11D forms is to tell HMRC everything they need to know about your income, expenses and allowances.

Here is a run down of what the P11D covers.

Just to remove one final confusion before we start - you may also see reference to  P11D(b), this is a form employers must submit summarising the individual P11D forms they’ve completed for their employees. Phew.

Here we go, then.

P11D: Reporting Benefits in kind

P11D forms are used to report on something called benefits in kind. These are items or services that you receive from your company in addition to any salary such as private healthcare, interest-free loans (to pay for train season tickets, for example) or company cars.

These benefits must be reported to HMRC, as the value of them effectively increases your salary. This means there may be National Insurance contributions to be paid on the benefits  -although the contributions are paid by the company, not the individual.

Who Must File A P11D Form?

P11Ds must be filed for:

  • any company directors or employees who earn over £8,500 per year,
  • any company director who owns more than a 5% shareholding in the company.

P11Ds are filed by the company, not the employee although for many small business owners, freelancers and contractors that means doing them yourself – unless RIFT is doing them for you!

What Must Be Included On A P11D?

In broad terms, every perk or benefit you have received from your business in the last tax year. Fields on the P11D form include entries for company credit cards, company cars and mileage, relocation expenses, medical cover as well as general expenses.

There are a number of common mistakes to watch out for when completing our P11D:

  • Forgetting to include credit cards!

    Credit card transactions must be included, even if they were direct company expenses and incurred in the normal course of business they count as “benefits” for the purposes of the P11D form.

    The easiest way to handle this is to remember to keep your credit card statements from throughout the year to help you when to come to do this, but don’t worry if your haven’t as you will be able to request past statements from your bank. Just make sure you leave enough time to do this!

  • Directors’ Loan Accounts Being Overdrawn

    If your Directors’ Loan Account is overdrawn when you file your P11D form you will not only be charged interest on the overdrawn amount, but an additional National Insurance charge on that interest.

    Keep a close eye on your Directors’ Loan Account throughout the year to make sure you can settle the overdrawn amount before the end of the year and avoid these additional charges.

  • Not Including Home Phone Charges

    If an employee has made calls from their home telephone or personal mobile and the company has repaid the expenses then these should be included, but are frequently forgotten. Make sure you keep a note of all your business calls on your home phone or personal mobile.

As with any kind of tax filing, it gets easier the better records you keep. RIFT Accounting will help you use Clear Books to make sure your records are always up to date, your accounts reconciled and any emerging problems addressed early.Talk to us today if you need help.

What Are The Penalties For Not Filing A P11D?

As with all tax submissions there are nasty penalties waiting should you file late or incorrectly.

If you miss the deadline of July 6th (for both online and on paper) you won’t incur penalties immediately. There is the possibility of being granted two weeks’ grace to put things right.

If  it reaches July 19th and your P11D is still nowhere to be seen, your company will incur fines of £100 per month (or part month) per 50 employees with missing P11Ds. This means that for most small business owners the fines will never be more than £100 per month, but it’s still something you want to avoid!

If you still haven’t filed by November, HMRC will send you a reminder, along with details of all the penalties you’ve accrued up until then.

If your P11D is incorrect you could also face a fine but only if HMRC believes that you knew you were making an incorrect submission. If HMRC believes you acted carelessly, deliberately mislead them or attempted to conceal your true liabilities penalties of  30%, 70% or 100% of the owed tax can be applied.

If you can convince HMRC that your mistake was genuine, and they believe you took reasonable care before filing, you most likely will not be fined.  .

Other Submission Dates To Be Aware of in July

  • July 5th  Last date for agreeing PAYE Settlement agreements for 2014-15
  • July 6th Deadline for submitting form 42 to report share related benefits provided to employees.
  • July 6th Deadline for P3D, P11D, P11D(b) for tax year ending April 2015
  • July 19th Deadline for postal payments to reach HMRC Accounts Office for any outstanding Class 1A NICS for tax year ending April 2015
  • July 22nd Final date for electronic payments to be cleared in HMRC’s banks account for any outstanding Class 1A NICS for tax year ending April 2015
  • 31st July Deadline for second self assessment payment on account for tax year ending April 2015

Call us on 01233 653006 and see how we can help you today.

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