Let’s Talk P11D: What’s the Deal?
Ever heard of P11D? It’s a tax form in the UK that Company Owners use to spill the beans about the cool stuff (perks and expenses) they’ve given to employees. These perks might not be part of the salary, but they still have tax implications.
Why Do We Need P11D?
In effect, the P11D helps HM Revenue and Customs (HMRC) figure out the tax that should be paid on the extra benefits employees enjoy. If you’ve got a company car, health insurance, or other non-salary benefits, they’ll likely end up on a P11D form.
What’s in the P11D Mix?
We’re talking about things like:
- Company Cars: If you provide a company car to yourself or to your employees, then HMRC want to know what they’re driving. The more gas guzzling it is the higher the charge. Check out our blog on electric company cars.
- Fuel for Company Cars: If you’re cruising in a company car with the tank filled, HMRC is keeping track, and there is an extra charge for this.
- Health Insurance: If you throw in private health cover, that goes on the list too.
- Interest-Free Loans: If you provide a loan to employees without interest, and the loan is over £10,000 then that’s on the P11D radar.
- Crib Provided: If you provide your employees with a place to crash, it’s on the P11D stage.
- Assets on Loan: If you or your employees use company stuff personally? That’s also in the mix.
- Mileage Perks: If you or employees are racking up miles and getting paid for it, above the company mileage allowance, that’s on the taxman’s checklist.
- Non-Business Travel Expenses: Finally, if you’re providing travel expenses that aren’t work-related, you guessed it, they’re on the list.
The P11D Process Made Easy
Employers get the fun job of filling out P11D forms for each eligible employee by July 6 after the tax year ends. They also submit a P11D(b) which is a summary of the P11ds.
Employees get a copy of their P11D by July 31. This helps them square up with HMRC when they do their personal tax returns, and is likely to alter their tax code.
What’s the Tax Deal?
The values in the P11D get added to what you earn. This can bump up your income tax and National Insurance. HMRC wants to make sure they’re getting the right slice of the pie.
There are options to include some things that might end up on a PSA, head on over to our blog to see if this makes for a better tax pill to swallow.
Knowing the lowdown on P11D is a smart move for both company owners and their team. It keeps things legit, dodges fines, and helps everyone play fair with their tax dues.
Disclaimer: This blog gives a simplified overview of the P11D form and isn’t financial or tax advice. For expert guidance, chat with a tax pro or HMRC directly.