Meeting filing deadlines for form P11D Expense payments and benefits in kind are reportable to the employer’s HM Revenue & Customs (HMRC) office on Form P11D for most company directors, whatever their earnings, and employees whose remuneration is ‘at a rate’ of £8,500 a year or more. Employers must state the cash equivalent value of the benefit or expense, the figure, which the employee or director may have to pay tax on. Employers can submit forms using the internet, Electronic Data Interchange (suitable for large employers) or paper using the official return or in list form. Each Form P11D should contain details of all expenses and benefits provided (whether payment is made to the director or employee personally or to a third party including a credit card company). However, items included in an HMRC dispensation notice or covered by a PAYE Settlement Agreement can be excluded. Dispensations are issued to employers where expense payments are of the type, which would be covered by a statutory deduction, for example, professional subscriptions. In these circumstances, the employer has nothing to report to HMRC, as such the expense payment is not taxed and the employee does not have to claim a deduction. Employers may enter into a voluntary agreement known as a PAYE Settlement Agreement to meet the tax liability, otherwise payable by the employee, on certain expenses and benefits. Although not part of the P11D return, HMRC working sheets can be invaluable to employers in calculating the taxable benefit value, for example for a company car. The benefit value is based on the employer cost of providing the benefit or facility less any employee contribution towards that cost or the value as calculated by a statutory formula or scale charge. Providing each employee or director with a copy of the form, prior to its actual submission, allows any obvious errors or emissions to be identified. Employers should, wherever possible, file the forms in advance of the statutory deadline of 6 July, to avoid any service delays. HMRC must receive Form P11Ds by 6 July following the end of the tax year. By the same deadline, employers must give each employee or director in employment on 5 April a copy of their P11D information. A copy of the form submitted to the HMRC Office may be the easiest option for most employers. For those leavers within the tax year, the employer must, upon receipt of a written request from an employee who left employment prior to 5 April, provide the P11D information to the ex-employee within 30 days or, if later, 6 July following the tax year end. The individual uses this information to complete their self-assessment tax return and claim a tax deduction for expenses incurred wholly, exclusively and necessarily in the performance of the duties of the employment. Enquiries by taxpayers regarding the application of tax law to their particular circumstances should be made to the employer’s HMRC office. Employers can visit www.hmrc.gov.uk/employers/ebik/index.htm for detailed HMRC guidance on benefits and expenses. Paul Tew, Pay Magazine Snowdrop provides a range of Payroll solutions that are fast, flexible and easy-to-use, to suit the many and varied needs of each organisation. To find out more about the software and services that we provide, please click here >>