If you are an employer who has provided any employee with benefits which have not been included in wages, then a P11D form should be used to report the information to HMRC. Although going forward employers may be able to choose between P11D or payrolling benefits.
The deadline for P11D’s to be reported to HMRC is the 6th July. This is also the date that all employees should be provided with a copy of the P11D and HMRC have been paid any Class 1A National Insurance owed from the P11D(b).
More information regarding P11D’s can be found here
Benefits to employees can now be payrolled providing you have registered for this with HMRC before the start of the tax year. This means that the cash equivalent of the employees’ benefits would be added to their pay then taxed through the payroll.
To register for payrolled benefits click here, if you have missed the deadline to register then you can apply to informally payroll benefits in writing to :
Complex Caseworker Team
National Insurance Contributions and Employer Office
When informally payrolling benifits a P11D still needs to be completed at the end of the tax year and marked ‘payrolled’. This stops HMRC collecting the tax that has already been deducted from employees.
Advantages of payrolling benefits
If you decide to payroll benefits, as an employer you do not need to produce P11Ds for employees. You will however still need to calculate the Class 1A National Insurance contributions and complete form P11D(b) by the 6 July following the end of the tax year.
The main benefits for employees are that their tax will be collected in real time, rather than being collected by means of an adjusted tax code following the end of the tax year.
To find out more on P11D and payrolling benefits click here
For further information on this or another financial topic contact AJR & Co Ltd to arrange a free 30 minute consultation.