P11D forms are required because HMRC recognise that employees and directors can be paid in many different ways, some of which may not have been taxed yet during the year. As an example, if you are paid a salary or a bonus then this will normally be taxed at source via the PAYE system. Likewise, if you receive dividends then these will normally be taxed when you submit your Self-Assessment return. BUT, if you receive other “benefits in kind” from the business or expenses which are not allowable business expenses then these will not yet have been taxed. And the P11D form is therefore required to be submitted each year in these instances. The deadline for paying the tax on benefits is always the 22nd July each year.
HMRC have provided detailed guidance surrounding P11Ds HERE (https://www.gov.uk/employer-reporting-expenses-benefits ).
You will need to submit a P11D form where:
- HMRC ask for one – So if you have received written communications from HMRC to submit a P11D return you must let us know!
- If you have previously submitted one
- If you have received “benefits in kind” from the business or expenses which are not allowable business expenses
If either of the first two situations applies and you have not received any benefits for the current year, then you must either submit a “Nil” return, or make a declaration online that a return is not required. The declaration option is useful where you don’t plan to receive benefits in the future because it means you do not have to submit Nil returns each year (unless HMRC request a return).
We have provided guides on our website to explain where expenses are allowable business expenses:
- Employees – HERE (https://www.qaccounting.com/guide/guide-to-expenses/ )
- Self-Employed – HERE (https://www.qaccounting.com/guide/self-employed-expenses/ )
As your Accountant we will submit P11D returns / declarations for clients on request and confirm the associated tax that is payable.
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