What is a P11D?

With the numerous benefits associated with being self-employed, this method of working does come with additional responsibility compared to a contractor’s permanent counterparts, including being aware of certain forms and legal requirements.

As a limited company contractor, you will need to fill out and send off a number of different forms to HMRC, one of which is called a P11D.

What is a P11D and why does my company need to file one?

Any company who provides their staff with taxable benefits, will need to ensure that they have filled out and sent off a P11D form; which is used to report those benefits to HMRC.

You must also include any benefits or facilities provided to members of the director’s or employee’s family or household.

The government explains that for most purposes ‘‘family or household’ is defined as the employee’s spouse or civil partner, sons and daughters and their spouses or civil partners, his or her parents, servants, dependants, and guests.’

You may not need to complete a P11D if there are no taxable benefits or if the benefits have been taxed through the payroll.

By sending off this information, you are notifying HMRC of any tax or National Insurance Contributions that the company may need to pay on benefits – otherwise known as benefits in kind.

Typical benefits in kind that you would include on a P11D include:

• Any private healthcare provided
• Health insurance
• A company car
• Life insurance
• Personal use of a company asset, such as a computer

When do I need to submit my P11D form and how long do I have to pay?

You will need to submit your completed P11D form by 6^th July and any amount that you owe must be paid by 19^th July.

There will be penalties for missing the deadline – a fine of £100 per 50 employees will be issued for each month or part month that your form is late and you will also be charged penalties and interest if you are late with the payment.

Changes to be aware of

There have been a few recent changes made to the P11D form, these include:

• An end to the £8,500 threshold for taxing certain benefits in kind

Previously, you would have only needed to provide information for expenses and benefits in kind offered to either employees or directors earning a rate of £8,500 or more per year, or directors earning a rate less than £8,500 a year (unless a full-time working director with no material interest in the company or a director of a charity or non-profit making firm).

This has now completely changed with regards to the threshold being lifted for taxing certain expenses and benefits, meaning that it now applies to all employees, no matter what their level of income.

• Voluntary ‘payrolling’ of benefits in kind

A new framework means that employers are able to deduct the tax that is due from benefits in kind through their payroll instead of using an employee’s tax code.

The types of benefits in kind allowable for this different process include cars, car fuel, private medical insurance and certain subscriptions, such as gym memberships.

If an employer wishes to use voluntary ‘payrolling’, they will need to make HMRC aware of their intentions beforehand.

To find out more about contracting please call us on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.