P11D

Form P11D (Expenses and Benefits) is a tax form filed by United Kingdom employers for each director and for each employee earning over £8500 per year, and sent to the tax office with which their PAYE scheme is registered. P11Ds are used to report benefits provided and expense payments made to employees by employers that are not put through the payroll. The employees are also given a copy, should they need it for a self-assessment tax return.

This is not to be confused with form P11 (Deductions Working Sheet), which is for tracking deductions made by PAYE.

A similar form P9D (Expenses payments and income from which tax cannot be deducted) for employees earning less than £8500 per year.

Content

There are currently 14 sections of the P11D:

• A Assets Transferred
• B Payments made on behalf of the employee
• C Credit Cards and vouchers
• D Living Accommodation
• E Mileage Allowances
• F Cars and car fuel
• G Company Vans
• H Beneficial Loans
• I Medical Health
• J Qualifying Relocation Payments
• K Services Supplied
• L Assets placed at employee's disposal
• M Other Items
• N Expenses Payments

To calculate the amount that an employee will have to pay tax on, the employer has to calculate a cash equivalent of the provided benefit/expense. Most cash equivalents are straight forward being the amount the employer pays for the provision of a service less any amount the employee reimburses to their employer. However there are some quite complicated areas of UK benefits legislation that have to be interpreted to arrive at a cash equivalent e.g. Company cars, Beneficial loans etc.

Filing requirements

Employer's obligations are to calculate these cash equivalents and report these details to employees and HMRC by 6 July following the end of a tax year (ending 5 April). It is estimated that 5 million P11Ds are submitted to HMRC annually. The most popular method of submission remains hard copies however there is a significant growing proportion that submit via the File by Internet route using XML.

There is the potential for hefty penalties to be imposed if P11D returns are not completed or are incorrectly returned. Therefore most larger employers tend to utilise software to improve the accuracy of their data.

P11D dispensations

Because the rules require that all payments for expenses, including reimbursed expenses, be reported on form P11D, compliance can be onerous. To reduce the compliance burden employers can apply to HM Revenue and Customs for a dispensation, which removes the requirement to report expense payments for which employees can claim a corresponding deduction. It is a condition that the employer has in place an adequate independent system for checking and authorising payments.

See also

• Taxation in the United Kingdom
• UK labour law

Notes

References

External links

• HMRC website: Expenses and benefits: the basics
• HMRC website: Dispensation from expenses and benefits reporting
• HMRC Approved Software Supplier