P11d forms are required to be completed by businesses for each employee or director that has received benefits in kind during a tax year. This form is required to be filed with HMRC by the 19th July following the end of the appropriate tax year. The total amount of benefits offered to employees will attract a National Insurance charge in the company which is declared on a P11d(b) form. The employee or director will then be issued with the P11d form which they must declare on their individual tax returns. This is treated as further taxable income for the individual.
There are numerous types of benefits in kind. The most common being company cars and fuel, private medical insurance provided by the employer and loans to employees. As a general rule, where a business has provided something to the employee with an element of personal use a benefit in kind is derived. There are notable exceptions – mobile phones & laptops (where these are mainly for business use) and entertaining expenditure up to certain limits are exempted.
It is important to consider the tax implications carefully of offering benefits to employees or directors. If there is any doubt then you should talk to us for guidance.
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