Why you should not miss this deadline
Deadlines are never welcome especially when it comes to tax but the most dreaded deadline of all, for employers and accountants looms ahead on 6th July. That deadline relates to the submission of Forms P11D for the year ended 5th April 2009.
These forms are for the recording of all benefits received by directors and employees which cannot be taxed through the payroll such as company cars, fuel provided for private as well as business use, medical insurance, payments of home telephone bills etc, etc. The forms also need to show the various expenses reimbursed to an employee throughout the year unless the employer has a written agreement from HM Revenue and Customs (called a dispensation) that such items do not have any benefit for the person and therefore do not need to be shown.
This form is dangerous! Why? Well first of all there are so many potential items that could be shown on it, some of which might not even be considered as a benefit. There is then the correct treatment of an item of expenditure. Did you know that if a director or employee has their home telephone paid for there are different rules if the contract is between the employee and the provider of the service from that if the employer is the party to the contract? The rental of the telephone is also treated separately to the calls and other services.
Of course the biggest danger is if you get the forms wrong (and it is not hard to get them wrong, regretfully). The law gives HM Revenue and Customs the right to charge up to £3,000 for every incorrect form The forms are also used to determine the Class 1A National Insurance liability, so if you do get the forms wrong you are likely to also under declare your National Insurance liability too on which interest will accrue if paid late. Mistakes can be very costly!
What must be done? Well of course the forms must be submitted on time. There are initial penalties of £300 for every form not submitted by 6th July. The Class 1A National Insurance liability must be paid by 19th July if being paid by cheque or if paid electronically cleared funds must be received by 22nd July.
If you are unsure whether you need to complete a form or what information should be entered it is well worth seeking advice, it could save you a substantial amount of money and time.
Biggleswade Chronicle - 19th June 2009
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