Guide to P11D and P11D(b) Forms: Expenses and benefits for employers

May 9, 2023 George Whitehead

P11D and P11D(b) Forms: HMRC filing and deadline

This week article has been curated by our Accountant in London, George Whitehead, providing his advice about employee benefits and what’s required from you as an employer if you provide benefits to your employees. There is a legal requirement to report all benefits provided to HMRC each tax year, here’s how:

What is a P11D/P11D(b) and when are they required?

A P11D is a type of tax form used in the UK to report taxable expenses and benefits provided to employees, by their employers, that have not been run through payroll.
Employers are required to submit P11D forms to HMRC for each employee who has received benefits, or other non-cash payments during a tax year. A tax year runs from 6th April to 5th April. Benefits can include, but are not limited to, private medical insurance, company cars or even employer loans that have been written off.
Employers are also required to submit a P11D(b) form to HMRC which would report all expenses/benefits incurred, in aggregate, during the year and any Class 1A National Insurance that is owed.
Essentially, both the employee and employer are taxed on the value of the benefits.

How are P11D and P11D(b) calculated and taxed?

For P11D:

First you will need to identify all taxable expenses/benefits that the employee has received and the cash equivalents. For example, the cash equivalent of medical insurance will be the cost of the cover for the individual.
You must then total all taxable benefits cash equivalent less any exemptions or allowable deductions.
The figure calculated in step 2 is what is reported on the P11D from.

For P11D(b):

4. Employers will then need to complete a P11D(b) which summarises the total amount of Class 1A National Insurance contributions due on all the taxable benefits provided to employees. The Class 1A National Insurance contributions percentage rate for the 2022/2023 tax year is 14.53%.

Therefore, if a company has 5 employees each benefiting from private medical insurance costing £150 per year, per employee, the amount of Class 1A payable by the company would be:

£150 x 5 = £750 (the cash equivalent of all taxable expenses/benefits)

£750 x 14.53% = £108.98*

If employees are required to complete a self-assessment tax return, the total amount of benefits received will need to be used in the calculations. This is because the value of the expenses and benefits reported on the P11D may be subject to income tax and/or National Insurance contributions, depending on the individuals’ circumstances.

In the example above, the employee would need declare taxable expenses/benefits of £150.

What is the deadline for filing and payment?

For the financial year just ended, 6th April 2022 – 5th April 2023, the deadline to have all P11D forms and the P11D(b) completed and filed would be the 6th July 2023.
Payment of Class 1A National Insurance is due by the 22nd July 2023 (19th July 2023 if paying by cheque).

What are the consequences for late filing and payment?

If the filing deadline is not met, penalties and interest could be incurred. The following statement has been taken directly from the .gov website – https://www.gov.uk/employer-reporting-expenses-benefits/deadlines

“You’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late. You’ll also be charged penalties and interest if you’re late paying HM Revenue and Customs.”

If the P11D is incorrect, further fines may be payable.

Are there alternatives to completing a P11D?

The only other alternative is for employers to register to payroll benefits for their employees. This means a P11D for each employee is not needed however, the employer will still be required to complete a P11D(b). Please keep in mind that not all benefits can be included in the payroll and therefore a P11D must be completed for such employees receiving non-payrolled benefits.

If you’re intending to payroll benefits and expenses, you must register them with HMRC using the payrolling employees taxable benefits and expenses service on the .gov website. You must do this before the start of the tax year. Therefore, it is too late for the current tax year but it worth keeping in mind for the 2024/25 tax year.