Employers have 2 months to report employee benefits and expenses ahead of the 6 July 2018 deadline.

At the end of the tax year, employers are required to report any taxable benefits given to staff over the previous 12 months that have not been deducted through payroll.

These benefits include:

  • company cars
  • health insurance
  • non-business travel or entertainment expenses 
  • assets provided by an employer that have significant personal use. 

Each taxable employee benefit is calculated differently, depending on the type of expense or benefit provided.

Most taxable employee benefits can be deducted through payroll, as long as the employer registered with HMRC before 6 April 2017.

Employers will need to send HMRC a P11D form for any taxable expenses or benefits that have not been deducted through payroll.

Even if you put employee benefits through payroll in 2017/18, you’ll still need to send a P11D(b).

This form enables HMRC to calculate class 1A national insurance contributions and how much PAYE is due from the employee on the benefit.

This is then normally collected from the employee by adjusting their tax code.

Employees who receive benefits in kind will have different tax codes and it’s important to get this right to ensure they pay correct amount of tax.

Employers who fail to meet the deadline may face a penalty of £100 for every 50 employees for each month or part month the form is late, as well as interest on late payments to HMRC.

Talk to us about your P11D requirements.