p11d completion

Annual P11D Returns are a return of Expenses payments or Benefits, provided by employers to employees (earning over £8,500) or directors.

The main categories of benefits are usually taxable benefits, such as company cars and private healthcare, however, employers are also responsible for declaring any other expense payments, even if they are non-taxable. The main examples are travelling/subsistence costs and entertaining. If, for instance, an employee has travelled on business, incurring train fares, meals whilst travelling and hotel accommodation, it would be easy to believe that no declaration would be necessary as the expenses are for business and there has been no benefit to the actual employee. However, under Inland Revenue rules, the expenses must be included on the employee’s P11D and a separate claim made to state that the expenses relate solely to business purposes.

We have been seeing a steady influx of PAYE Compliance Visits by the Inland Revenue and incorrect P11D Returns are frowned upon by the Taxman, despite the possibility that there is not actually any tax due! Simple omissions can plant a seed of doubt in the Taxman’s mind and this can open the door to additional questions, generally relating to whether any private expenses exist.

We would always recommend that Employers ensure that they keep full and accurate records relating to any expense claims, or items of expenditure which could possibly contain any element of private purposes and ensure that all relevant items are declared on the Annual P11D Returns.

If you require any assistance with regard to P11D Returns, do not hesitate to contact us.