If any of your employees have expenses or benefits it is time to prepare your P11D and/or P11D(b) for the 2016-17 tax year. These must be submitted by 6 July 2017 and any Class 1A NICs due on these expenses and benefits must be paid by 22nd July 2017.
HMRC changed what needs to be reported on a P11D for 2016-17 and removed the need to apply for a dispensation. Most business expenses can now be reimbursed without needing to be reported and these must not be included on a P1D.
However there may be some expenses you will need to report. Even though they may not be taxable they could be subject to Class 1A NICs. HMRC's A-Z of expenses and benefits will identify which expenses need to be reported.
Examples of what would need to be reported on a P11D and would be taxable could be reimbursed mileage where an employee has used their own car and you have paid more than the allowed 45p per mile for up to 10,000 miles in the tax year or more than 25p per mile for over 10,000 miles. If you have paid round sum amounts for overnight stays or for subsistence which are not in line with HMRC approved amounts these would have to be reported. These types of expenses can, of course, be included in payroll and tax and NIC could be deducted on a regular basis.
Your employee can make a Section 336 claim if the expenses reported on the P11D are wholly and exclusively business expenses and this claim should prevent the employee paying tax on these expenses.
Benefits in Kind will need to be reported on a P11D as there will be Class 1A NICs due on these. Benefits in Kind would include company vehicles and health insurance. Employees may have already had their tax code adjusted to account for these benefits.
2016-17 was the first year that benefits could be payrolled. If benefits have been put through your payroll you will still have to complete a P11D(b) to report the Class 1A NICs due on them. However if there were one or more benefits which were not put through the payroll then you will have to complete a P11D as well as the P11D(b).
You must provide a copy of the P11D for your employee which will identify the expenses and or benefits you have reported. If you have payrolled benefits you must provide your employee with a letter explaining what has been payrolled. You can find out more information here about payrolling benefits.
When you pay the Class 1A NIC due you must pay this to HMRC using your usual Accounts Office reference number but with 1713 added as the final four digits.
If you have received a notification from HMRC to file a P11D or P11D(b) you must submit a return whether or not you have anything to report. You can submit a nil return online. If you have received a notification to report from HMRC and ignore it because you have nothing to report then you are likely to receive a fine. Find out more here.
Don't forget your P11d and P11D(b) or a nil return must be submitted by 6th July 2017.
