Taxable expenses and benefits guidance updated ahead of P11D deadline

Ahead of the P11D and P11D(b) deadline on 6 July, and in light of Coronavirus, the Government has updated its taxable expenses and benefits guidance.

If you provided benefits in kind or non-exempt expenses to employees during the 2019/20 tax year, you may need to report these via a P11D form. These are benefits provided in addition to an employees usual salary and that have not already been deducted via the payroll.

Despite various extensions and deferrals being available to businesses presently, there is no extension to the P11D deadline.

Consequently, employers must have submitted complete P11D forms to HM Revenue & Customs (HMRC) and have provided a copy to respective employees by Monday 6 July 2020. Even if you put employee benefits through payroll during 2019/20, you must still submit a P11D(b).

A P11D(b) notifies HMRC of the total value of benefits that you have provided to employees. The form also shows the amount of Class 1A national insurance contributions (NICs) payable by the employer.

Employers must pay any Class 1A national insurance owed by 19 July 2020 if paid by cheque, or 22 July 2020 if paid electronically.

Incorrect or late P11D submissions

Incorrect or late submissions can result in financial penalties, amounting to up to 100 per cent of the tax owed.

To avoid penalties, complete forms accurately first time around and submit to HMRC in a timely manner. It is unfortunately the case that rectifying errors on a P11D submission at a later date can be extremely difficult.

Attention to detail is particularly pertinent, given the current Coronavirus crisis. It is possible that you may be providing new taxable benefits and expenses, that are reportable, in response to this.

Completing a P11D form for the first time

If you need to complete a P11D form, you should already be undertaking the necessary preparations to do so.

For some of you though, this may be the first time you’ve needed to report employees benefits or non-exempt expenses. Alternatively, as aforementioned, you may need to report benefits in addition to those that you normally would do. Either way, the task may seem a little daunting, which is where we come in!

We have a team of tax experts on hand, who can assist with completion of the relevant forms. We can also advise on whether certain benefits or non-exempt expenses need to be reported, in the first place.

We’ve also produced a useful Q&A, to help you understand your obligations when it comes to completing and submitting a P11D or P11D(b).

If you think you could benefit from some assistance, ahead of the 6 July deadline, contact us today.

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