If you’re an employer and provide expenses or benefits to employees or directors, you might need to tell HMRC and pay tax and National Insurance on them.

Submit your P11D forms online to HMRC – July 6th following the end of the tax year.

A P11D is the form used to report expenses and benefits paid to directors and employees which have not yet been subject to PAYE tax. HMRC require your company to notify these expenses for each director or employee after April 6th each year.

Penalities for P11D(b)s in good time to meet the filing deadline. HMRC should also be notified of taxable termination packages exceeding £30,000, consisting of cash and non-cash benefits.

Employers must also give employees a copy of the information on their forms by this date.

You’ll get a penalty of £100 per 50 employees for each month or part month you P11D(b) is late. You’ll also be charged penalties and interest if you’re late paying HMRC.

Tell HMRC the total amount of Class 1A National Insurance you owe on form P11D(b) – By July 6th.

Class 1A NIC is an employer National Insurance charge usually based on 13.8% of the cumulative benefits advised on P11D submissions for employees.

Pay any Class 1A National Insurance owed on expenses or benefits – must reach HMRC by July 22nd (July 19th if you pay by cheque).

Employers must pay Class 1A National Insurance contributions on work benefits you give to your employees, such as a company mobile phone. If a benefit is subject to PAYE, Class 1A National Insurance is payable.

The deadline for receipt by HMRC of payment of Class 1A NIC’s included on form P11D(b) is July 19th for postal payments and July 22nd for electronic payments.

Failure to meet these deadlines will result in automatic interest, currently at 2.6% per annum, on the late payment of tax, and penalties starting at 5% when payment is 30 days late, increasing to 10% after six months and 15% after 12 months.

Employers should identify the amount payable and make arrangements to make payment to be with HMRC by the due date to avoid interest on late tax and penalties.

 

John Stolliday
John Stolliday

John Stolliday runs The Financial Management Centre in Luton East. John is a qualified accountant (FCCA) and bookkeeper (MICB) with UK and Middle East experience in the construction and building services sectors, handling company turnovers up to £100m and staff of 15. John has held senior roles, up to board level, in civil engineering, industrial engineering, pipelines, general building and building maintenance companies.