The forms P11D, and where appropriate P9D, which report employees and directors benefits and expenses for the year ended 5 April 2013, are due for submission to HMRC by 6 July 2013. The process of gathering the necessary information can take some time, so it is important that this process is not left to the last minute.
Employees pay tax on benefits provided as shown on the P11D, either via a PAYE coding notice adjustment or through the self assessment system. In addition, the employer has to pay Class 1A National Insurance Contributions at 13.8% on the provision of most benefits. The calculation of this liability is detailed on the P11D(b) form.
HMRC have issued some guidance as to common errors on the forms in the latest Employer Bulletin. These include the following which can delay processing and cause problems with employees’ tax codes:
- Not ticking the ‘director’ box if the employee is a director.
- Not including a description or abbreviation, where amounts are included in sections A, B, L, M or N of the form.
- Leaving the ‘cash equivalent’ box empty where you’ve entered a figure in the corresponding ‘cost to you’ box of a section.
- Not correctly completing the box in Part 5 of form P35 (Employers Annual Return) or the declaration on the final FPS/EPS submission (for those employers operating PAYE in ‘real time’) to indicate whether or not P11Ds are due.
- Where a benefit has been provided for mixed business and private use, entering only the value of the private-use portion – you must report the full gross value of the benefit.
- Not completing the fuel benefit box/field where this applies. This means an amended P11D has to be sent in.
- Incorrectly completing the ‘from’ and ‘to’ dates in the ‘Dates car was available’ boxes. For example entering 06/04/2012 to 05/04/2013 to indicate the car was available throughout that year. If the car was available in the previous tax year, the ‘from’ box should not be completed and if the car is to be available in the next tax year, the ‘to’ box should not be completed.
Correct P11D completion is complex. If you would like any help with the forms P11D or the calculation of the associated Class 1A National Insurance liability please get in touch.