P11Ds: what they are, why they matter and what you need to know
Every year we send our clients a request asking whether they need to file a P11D form. This annual check is necessary as circumstances can change year on year.
So here’s everything you need to know about them.
What is a P11D?
A P11D is a form you send to HMRC that tells them about the extras you give employees beyond their salary.
This could be things like a company car, private health insurance, an interest-free loan or even a gym membership the company pays for.
These aren’t cash, but they still have a value, HMRC wants to know about them because they’re taxable.
There are actually two forms involved which you may need to know about.
The P11D reports the individual benefits for each employee or director and the P11D(b) is the employer’s summary form that tells HMRC how much Class 1A National Insurance you owe on those benefits. Think of it as the bill that follows the list.
Do you need to file one?
The main question is, do you provide benefits to any employee or director that aren’t run through payroll?
- If it’s a yes then you probably need a P11D.
- If it’s reimbursing genuine business expenses (wholly and exclusively for work) then you’re usually fine.
- If you’re not sure? That’s exactly why we check in with you every year to make sure
What needs to go on it?
Here’s a list of common benefits that need reporting:
- Company cars and fuel
- Private medical or health insurance
- Life insurance (in some cases)
- Interest-free or low-interest loans
- Director’s loans over £10,000
- Personal use of company assets
- Company credit cards used for personal spend
- Living accommodation
- Gym memberships
- Professional fees (most are exempt if they’re needed to do the job, but don’t assume!)
The rule of thumb: if it’s a perk with personal benefit, it probably needs reporting.
Had benefits last year but none this year?
This is the one that catches people out.
If you filed a P11D last year but have nothing to report this year, you STILL need to tell HMRC. File a nil return by 6 July or you’ll get a penalty charge.
HMRC won’t take silence as a nil return, if they don’t hear from you, they’ll assume you’ve forgotten…. not that you have nothing to report.
It only takes two minutes to file and avoids potentially hundreds of pounds if you don’t.
The key dates to know
6th July is the big one to note. That’s when you file both the P11D and P11D(b) with HMRC AND give copies to the relevant employees.
19th July is when you pay the Class 1A National Insurance. That’s currently 15% of the total value of the benefits you’ve provided.
But miss the deadlines and it gets expensive fast.
Late P11D(b) submissions trigger an automatic £100 penalty per month and that’s per 50 employees, but even if you have one employee this counts as a partial 50. So a business with 3 employees with taxable benefits is looking at £100 a month from day one.
Miss the Class 1A NI payment deadline and a 5% surcharge lands on whatever you owe, another 5% at 6 months and again at 12. Plus interest.
Small delays= whopping costs.
Your checklist of responsibilities as an employer
✅ Identify who receives benefits
✅ File P11D and P11D(b) forms by 6 July
✅ Give employees their copies by 6 July
✅ Pay Class 1A NI by 19 July
✅ Keep records for 3 years
What employees need to know
If you receive benefits, here’s your bit:
- Check your P11D is accurate when you get it
- Expect your tax code to change as a result
- If you file a Self-Assessment return, you’ll need to include the details there too
Had a letter from HMRC?
Best advice is don’t ignore it! Make sure you act on it straight away.
P11Ds are one of those things that feel complicated until you understand what you’re actually dealing with. The deadlines are firm and the consequences of getting it wrong are real.
That’s why we check in every year without fail, if you’re not sure whether something needs reporting, just drop us a line and ask.
It’ll be better that it’s a quick message now than a penalty notice later.
Get in touch with the Shapes team at shapes.team
