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What is a P11d and why do I have to pay it?

The P11d is a form used to report benefit in kind (the perks) that employees receive through-out the year to HMRC. Some benefits are taxable through payroll, but for those that aren’t you need to let HMRC know.

What’s the difference between P11d and P11d(b)?

The form is made up of two parts: P11d and P11d(b). The main difference is the P11d is an individual form for every employee and details the cash equivalent of the benefit in kind provided over the tax year (6 April – 5 April).

The P11d(b) is the employers form which summarises the employees individual P11d forms and declares the total taxable benefits the company has provided and details the tax due.

What counts as benefit in kind?

Pretty much any item the company pays for, and the employee gets a benefit from. Such as:

  • Company car
  • Medical/health Insurance
  • Mobile phones
  • Gym memberships
  • HMRC have a detailed list here.

As an employee, the taxable benefits may be offset against their PAYE code for the next tax year. Their tax-free personal allowance could be reduced so that HMRC can collect the tax due on the benefit from the employee.

The tax due by you the employer, is Class 1A National Insurance. It’s 13.8% of the cash equivalent value of the benefit: this is because the benefit in kind the employee receives is classed as an extension of the employee’s salary.

As an employer you are responsible for letting your accountant know about all the benefits that could fall into the ‘benefit in kind’ category then we can accurately report it to HMRC for you. If you don’t know, always ask!

Who needs to complete the P11d form?

The employer needs to complete both parts – the P11d and the P11d(b): not the employee, unless they are freelancers or contractors then they do it themselves.

When do you need to submit the P11d form?

It’s due to be submitted by 6 July following the end of tax year and must be paid by 22July. Any tax due must be paid to HMRC by the 22nd July each year.

Is it worth including employee perks?

A great employee is 100% worth keeping, and a perks package can make up a pretty attractive offer! If you’re running a creative agency or cutting edge tech business, you want to stand out to employees and build a unique culture and it can all tie back into the perks you include.

We’ve worked with a lot of businesses that like to be different, just like us. If you need some ideas just ask.

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