Forms P11D – submission deadline is approaching

26th May 2021 Tax CHW Accounting

If you are an employer who provides benefits or expenses to your employees, directors or members of their family or household then you should be aware of the P11D submission deadline of 6 July 2021 for the tax year 2020/21.

You must submit an end-of-year report to HMRC for each employee you have provided with expenses or benefits in the tax year ending 5 April.

What needs to be included in a P11D and what is exempt?

Generally speaking, any items the company pays for and that the employee, director or member of their family or household benefits from need to be included on the P11D form. Examples of expenses and benefits that need to be reported to HMRC are:

• Company cars
• Loans for rail season tickets
• Other loans
• Health insurance
• Assets provided to an employee that have significant personal use
• Self-Assessment fees paid by the company
• Non-business travel expenses
• Non-business entertainment expenses

Certain business expenses are exempt, including:

• Business Travel
• Business entertainment expenses
• Credit cards used for business purposes
• Fees and subscriptions

How is ‘family or household’ defined?

The employee or director’s ‘family or household’ is defined as:

• spouse or civil partner
• sons and daughters and their spouses or civil partners
• his or her parents
• servants
• dependants
• guests

The employer is liable for Class 1A National Insurance Contributions on the taxable value of most of the benefits at a rate of 13.8% for the year ended 5 April 2021.

 What is the filing deadline and are there penalties?

P11Ds must be submitted to HMRC before 6 July 2021. Also, by this date employers must have given employees a copy of the information on the forms and told HMRC the total amount of Class 1A National Insurance owed (this is on form P11D(b)).

If this deadline is not met, HMRC can impose penalties. Different penalties apply to each form as follows:

• For the form P11D(b), the penalty depends upon the number of employees and length of the delay. This is £100 for each complete or part month for every 50 employees
• If a benefit has been omitted or incorrectly detailed on the P11D, the maximum penalty of £3,000 can be imposed. HMRC could also impose further penalties for late submission of the P11D.

What is the payment date?

This liability needs to be paid by 19 July 2021 and late payments will be subject to an interest charge at a rate of 2.6% per annum.

If you need our help in this area, get in touch at hello@chw-accounting.co.uk. We have extensive experience of helping employers meeting their tax and NIC obligations in respect of employee benefits in kind.

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