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What is a P11D?
What does it mean to you and your limited company?
A form P11D is an HMRC document used by an employer to annually report certain expenses and benefits paid or made available to directors and employees.
It is designed to provide HMRC with details of specific taxable benefits in kind which cannot, or the employer has chosen not, to be included in the payroll and subject to PAYE and NIC deduction during the course of a year.
What details does the form require?
The form requests details, including values, of such things as:
Assets transferred to employees
Vouchers and credit cards provided to employees and directors
The provision of living accommodation *
Cars and fuel provided for employees and directors
The provision of vans and van fuel
Payments for private medical treatment or insurance
Details of any low or interest free loans *
Expenses payments made on behalf of employees or directors which the employer does not believe would be eligible for tax relief as business expenses
Since 2016 employers have been able to payroll most taxable benefits (except those marked with an * above) rather than report them on the form.
This is a voluntary arrangement which is available to PayStream PSCs although as is common to a number of limited company contractors, the use of interest-free loans from their companies may still require a P11D to be completed.
Does it affect National Insurance Contributions?
The payrolling of taxable expenses and benefits enables employers’ Class 1A NIC to be accounted for at the same time as the tax on those benefits.
For those expenses or benefits not payrolled, the P11D enables an employer to identify, report and pay the tax and NIC over to HMRC. This is done with the assistance of a companion form P11D(b).
When do P11D forms need to be completed?
HMRC’s PAYE Online Service is used to report on forms P11D and P11D(b). This is part of an employer’s End of Year duties and the P11D declarations must be filed by 6 July following the end of the tax year on 5 April. Payment of Class 1A NIC is required by 22 July (earlier if not paid electronically).
PayStream's limited company contractors are provided with a P11D return completion service as part of their engagement.