P11D forms are a way of reporting expenses payments made by employers to employees which must be submitted every year.
A P11D form is used to report anything you, or your employees, receive from your work to HMRC that isn’t included in your salary. These are known as ‘benefits in kind’ and includes anything you receive as a benefit from work.
P11Ds are always filed by the employer so, if you’re an employee, you don’t have to worry about them. If you’re self-employed or contracted, you are responsible for filling out your own P11D form.
Almost any item paid for by the company and given as an employee benefit or expense should be listed on a P11D form. That includes things like travel, health insurance, company cars, living accommodation, company credit cards and relocation expenses.
What is the P11D submission deadline?
Regardless of your business calendar, all P11D forms must be filed either online or on paper by July 6th for the tax year in question. It is absolutely vital to meet this deadline and its subsequent grace period or you may be faced with heavy fines.
If you miss the July 6th deadline, you have a grace period of two weeks (until July 19th) to get your P11D forms filed. After July 19th, fines of £100 per month for every 50 employees in the company will apply. By around November, HMRC will have started actively chasing you for P11D and sent a list of the total penalties incurred.
Penalties for P11D errors
Other penalties can be accrued for inaccuracies in P11D forms. This is at HMRC’s discretion; if they judge you to be carelessly or deliberately concealing expenses, you could face penalties of 30%-100% of the tax owed.
So what is it about P11D forms that catches companies out and hinders them from submitting the forms in time? For a start, the form itself contains 14 sections and can be a huge headache even for seasoned accountants, with complicated and variable guidelines from HMRC. Completing P11Ds is notoriously time-consuming, especially for large organisations with many members of staff.
Furthermore, P11D rules and regulations are complex and changes to the P11D system are expected over the next few years with regards to reporting and regulation. Without proper guidance, filling a P11D can be extremely complicated and, when done manually, open to a raft of punishable errors.
Using Payroll Software for NAV to calculate P11Ds
MiraclePay is the leading payroll solution for Microsoft Dynamics NAV and helps hundreds of businesses complete their P11Ds with total ease. This HMRC-approved software captures employee benefits and expenses data required for year-end reporting. The P11D data can be sent to HMRC in paper format or electronically via the e-government gateway. Simple, efficient and completely hassle-free.
It’s often best to ask an expert for guidance; here at Miracle, we understand P11D forms inside out and we’re always happy to help companies struggling with legal jargon or the many grey areas in filing expenses. Contact us today at miracle@eque2.com and let us help with the management of your payroll.