If you’re an employer or a director in charge of employees at your company, you’ll need to declare any benefits your employees receive to HMRC. And the way to go about this is by annually submitting a P11D form by the P11D deadline.
If you work for a company, your employer will probably ask you to submit a P11D form to them. This is because they’ll need to show HMRC how much tax and National Insurance you paid during the previous tax year, especially in terms of any benefits you receive.
The P11D deadline falls on 6 July following the end of the tax year. It’s important to have your forms filled out and submitted on time whether you’re an employee or an employer. Submitting the forms late invites some unwanted (and expensive) penalties.
What is a P11D on company benefits?
A P11D form is a tax form that employers use to declare “benefits in kind”, which is business jargon for any extras your employees and directors receive in addition to their salary. For example, your company might offer health insurance, company cars, travel reimbursement, childcare costs, and more.
These benefits have an equivalent cash value. So, because HMRC is interested in the total amount that your employees earn annually, it needs to account for the value of these benefits when it calculates how much tax you owe.
P11Ds apply to people who pay their taxes as they earn (PAYE).
In general, any material gain that isn’t part of your employees’ basic salary is typically a benefit in kind, or an employee benefit. But you don’t need to include everything on your P11D—you don’t need to declare allowable business expenses, like office supplies, subscriptions, or business travel expenses, for example.
There are two kinds of P11D forms that employers need to submit:
- P11D form. This is a form that needs to be submitted for every employee and director, detailing their benefits in kind. If you’re an employee, this is the form you’ll be asked to fill in.
- P11D(b) form. This form includes a summary of all the other P11D forms that an employer submits. It declares all the benefits in kind offered by the business, along with any Class 1A National Insurance contributions that are due for the year. If you’re an employee, you don’t need to worry about this form—your employer will take care of it.
All P11D forms have to be submitted by the P11D deadline, which is 6 July following the end of the tax year. If you need to declare the benefits you received in the 2022/23 tax year, for example, your employer will have three months after the tax year ends (on 5 April 2023) to submit the form by 6 July 2023.
What goes on the P11D form?
The P11D is a grey A4 form called “P11D Expenses and Benefits”. If you’re an employee, you’ll need to fill in your personal details, like your:
- National Insurance number
- Date of birth
- Employer’s name
- Employer’s PAYE reference number
The body of the form will include details of the types of benefits you might have paid taxes on, such as mileage and fuel allowances, insurance expenses, interest-free loans, vouchers and credit cards.
Every section of the form will ask you to fill in specific details related to each benefit. For example, if you drive a company car, you’ll need to provide its make, model, and market value. The last box in each category shows how much tax was due.
Do I need to submit a P11D if I have no benefits?
P11D forms only need to be submitted for employees who receive benefits in kind. If you’re an employee who doesn’t receive any benefits, your employer won’t ask you to fill in a P11D.
However, if you’re an employer with employees and directors who don’t receive benefits in kind, you might still get a P11D(b) form from HMRC. In this case, you’ll need to inform HMRC that you have nothing to report by contacting them here before the P11D deadline. If you don’t inform HMRC by the deadline, they’ll assume you’re late and may start issuing penalties.
If you’re employing people and payrolling benefits, then you don’t need to submit a P11D form. Just make sure you register the benefits online with HMRC so they know that taxes are being collected via payroll.
What happens if you submit a P11D late?
If you’re an employer and you’re late submitting your P11D forms, HMRC will start issuing penalties. It’ll start by charging £100 per 50 employees for each full month that the return is late, following the P11D deadline.
If you don’t pay the National Insurance contributions that are due within 30 days of the due date, HMRC will add 5% to the amount of contributions due as a penalty. The penalty compounds the later your submission gets, increasing to 10% of the contributions due after six months, and 15% after 12 months.
Unfortunately, the penalties for missing the P11D deadline can be even worse. HMRC can request a penalty of £300 per P11D form submitted late by going through the First-tier Tax Tribunal (FTT).
How to submit your P11D before the deadline
Employers can report benefits in kind to HMRC in one of two ways:
- The first method is to file a P11D report online using the PAYE service
- The second is to report it using HMRC-approved payroll software
If you’re filing a P11D form, you need to include copies of your company’s benefits-related records for three years from the end of the tax year they’re due for.
These records should be dated, and they need to include a breakdown of the benefits in kind that your employees received, how you determined the amount to give them, and any payment you or your employee contributed.
What should you do if you make a mistake on your form?
Unfortunately, if you make a mistake on your P11D or P11D(b) form (if you include incorrect figures, for example), it will cost your company.
The amount in penalties depends on the severity of the error and the “taxpayer’s behaviour”. The penalty is calculated as a percentage of the tax that is lost as a result of the error, while the taxpayer’s behaviour refers to whether your company voluntarily disclosed the mistake or not.
If your company disclosed the mistake after being prompted by HMRC, it’ll need to pay more—possibly double the percentage. Here’s a breakdown of how much the penalty ranges are in different scenarios:
|Behaviour of employee
|Penalty for voluntary disclosure
|Penalty for prompted disclosure
|Deliberate but not concealed
|Deliberate and concealed
Of course, terms like “careless” and “deliberate” are ambiguous, and people may dispute how to categorise the mistakes. Still, if you come across a mistake, it’s always best to disclose it before your company is prompted to by HMRC.
P11D forms and P11D deadline: a summary
P11D forms are in the same family of tax forms as P45 (which shows how much tax you paid if you left your job before the end of the tax year) and P60 (which shows how much tax you paid on your salary in a full tax year). The difference is that P11D concerns the tax paid on the equivalent cash value of benefits you received.