If you, any employees, or other directors or their spouses / partners received any taxable ‘benefits’ in the period from 6th April to 5th April from your company, partnership or sole trade business, these benefits should be declared on forms P11D and reported to HM Revenue & Customs by 6th July, unless you have pay rolled the benefits. The forms P11D should then be provided to each employee to pass on to their tax agent (if applicable) and the ‘benefits’ in kind declared on each individual’s self-assessment tax return for the year ended 5th April (if required).
In addition, on certain ‘benefits’, the company, partnership or sole trade business is also required to pay Class 1A National Insurance Contributions (“NIC”) at 14.53% of the value of the benefit provided. This liability is payable by 19th July (if paid by post) or 22nd July (if paid online).
Listed below are some of the key ‘benefits’ which should be include on forms P11D, however, the list is not exhaustive:
- Loans to directors or employees where these were over £10,000 at any point in the tax year;
- Company cars, including private fuel if provided;
- Vans made available for private use, including private fuel if provided;
- Private medical, dental fees & insurance;
- Computer equipment or telephone landline costs, or where more than one mobile phone provided to an employees or director;
- Company or partnership assets being used for private use;
- Assets (e.g., cars, laptops, mobile phones etc) transferred to employees or directors at less than market value;
- Vouchers exchangeable for cash or non-cash vouchers in excess of £50;
- Living accommodation;
- Goods or services provided to employees or directors at less than market value; or
- Expenses reimbursed including household expenses / cash sums paid to employees or directors.
You will be charged penalties and interest if you are late paying Class IA NIC to HMRC.
You will get a penalty of £100 per 50 employees for each month or part month your P11D reporting to HMRC is late, for delays up to 12 months. Any such penalty is limited to 100% of the Class 1A contruition due.
If forms P11D are incorrectly completed negligently, there is a penalty of 100% fo the underpaid contrubutions.
We, therefore, recommend that in the first instance you speak to your payroll provider for further information or support in preparing forms P11D. This could include your payroll provider reporting P11D benefits as part of your payroll submissions, where available.
EMPLOYMENT RELATED SECURTIES
The deadline for employers to file their annual employment-related securities (ERS) returns with HMRC for the tax year is approaching. The filing deadline is 6 July.
ERS returns have to be completed by UK directors, employees or employees with UK work duties who have acquired shares or other securities (for example, loan notes, options etc) in their company; or if their company operates an employee share plan or arrangement, for example an enterprise management incentive (“EMI”) option scheme.
Transactions do not need to be part of a formal share or option scheme to be potentially reportable and can include one-off events, for example, certain corporate transactions and re-organisations. Reporting may also be required where shares/securities are located outside of the UK.
There also doesn’t have to be a tax liability for the transaction to be reportable, the employee may have brought the shares at market value, paid the income tax, but as an ERS event, still reportable.
To enable a report to be made, a company must ensure it has registered its share schemes and ERS events via the HMRC online PAYE portal, to enable a return to be completed. Failure to register, or thereafter file a return results in automatic late filing penalties. Further details of what needs to be reported can be found on the blog.