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We have compiled a list of questions and answers to help you to understand more about P11d’s. Wondering what a P11d is? We answer that question too.
Q: What is a P11d form and why do I have to complete one?
A: A P11d is a declaration to HMRC of benefits paid by a company on behalf of one of their employees. The ‘cash equivalent’ of the benefit is calculated and added to the form along with the details of the benefit.
Q: What is classed as a “Benefit” and do all “benefits” have to be declared?
A: Typically a benefit is something the employee benefits from which doesn’t relate to the company or only partly relates to the company. For example, a gym membership, a health care scheme, a company car (even if used for business), a company van (if taken home), vehicle fuel, interest free loans of more than £10,000, rail season ticket, home telephone and more. A full list of benefits can be found here. This list will also let you know what is exempt.
“Benefits” provided also extend to the employee’s:
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- Spouse/civil partner
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- Guests
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- Dependants
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- Servants
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- Parents
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- Children
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- Children’s spouse/civil partner.
Any benefits paid to the above, must also be declared. The employee will pay the tax and the employer will pay the national insurance on the benefit.
Q: Is tax payable on a benefit?
A: Yes. The employee’s tax code is changed so that tax is collected on the “cash equivalent” of the benefit. However, the employee does not pay national insurance on the benefit so there is a saving here for the employee. The employer also pays tax called Class 1A National Insurance. This is calculated as a percentage of the “cash equivalent” benefit and is paid annually.
Q: How often are P11d’s submitted and when?
A: Annually by 6th July based on the benefits provided during the previous tax year to 5th April. The related tax/ni is due by 22nd July.
Q: What if I, or my staff, have benefits but I don’t submit a P11d?
A: HMRC will fine you £100 per 50 employees for each month, or part month, you are late.
Q. How do I calculate and submit a P11d?
P11d’s can be calculated and submitted using commercial software or you can use HMRC’s PAYE online software.
Q. Do I have to fill out a P11d form for all employees?
That depends. You can choose to “payroll” employees’ benefits (see next question). As long as you “payroll” all employees’ benefits, you do not have to complete and submit P11d’s at all, however, in all circumstances, you must complete a year end P11d(b) which is a summary of all benefits and the Class 1a NIC due. If you do not “payroll” benefits, you must complete a P11d for all employees at the year end along with a P11d(b).
Q. What does “Payrolling Benefits” mean?
A: You can choose to declare and calculate benefits through your payroll software as they happen. There are advantages to using this system:-
- Employee’s tax codes are changed in-year and therefore the tax starts to be paid shortly after the benefit(s) is received. If you wait until the end of the year to declare the benefit, the employee could end up paying 2 years’ tax in 1 year.
- You do not have to complete P11d’s at the year end but you must still calculate and complete a P11d(b) which is a summary of all benefits and the Class 1a NIC due.
To “Payroll” benefits, you must register to use the scheme in the previous tax year. You can register through your HMRC online PAYE account. You must ensure your payroll software has the facility to handle payrolling benefits.
UPDATE: From April 2026, there will no longer be a choice of either payrolling or end of year reporting. All benefits in kind will need to be reported via payroll.
Q. Do I have to include exempt payments and PAYE settlement agreements in my P11d form?
No, if covered by the exemption for reimbursed or paid expenses, or If you have a PAYE settlement agreement then there’s no need to show benefits in kind, expenses, or payments covered under this.
If you would like us to calculate, complete, and submit your P11d’s please book an appointment below. Our costs for completion can be found here
