P11Ds

All employers should remember the filing date for P11D returns with HM Revenue and Customs is 6 July 2016.

P11D returns are normally needed where employees earning over £8,500 per year (including value of the benefits), or any company directors, receive any benefits or expenses payments from their employer. For employees earning less than £8,500, Form P9D may be required.

Common benefits and expense payments include a company car, medical insurance, living accommodation, interest-free loans and travel and subsistence.

From 6 April 2016, employers who pay employees for expenses that are incurred wholly, exclusively and necessarily in carrying out their job are exempt from tax do not need to include these expense payments on a P11D return. Previously, HMRC needed to give a dispensation for this to be allowed and any dispensations in place will be abolished.

Failure to submit form P11D(b) by the 6 July deadline will incur a penalty of £100 per every 50 employees (or part of 50) per month, or part month until payment. Late filing penalties also apply for failure to submit forms P9D or P11D.

Any Employers Class 1A National Insurance arising from the P11Ds should be paid by 19 July 2016 (22nd if paid electronically).

Failure to meet these deadlines will result in automatic interest at 3% per annum on the late payment of tax, and penalties starting at 5% when payment is 30 days late, increasing to 10% after 6 months and 15% after 12 months.

Should you require any assistance or further advice please call John Langlands on 01382 312100 or Lynne Vaughan on 01382 312140 or your usual EQ contact.