It’s P11d time of the year again. But what is a P11d?
For the uninitiated, it’s a tax form required by HMRC from UK-based employers detailing the benefits and expenses an employer has provided to directors, and employees earning more than £8,500 per year. It’s due on the 6th of July and failure to comply can fetch penalties up to £3,000.
But there is good news. As an employer you can provide employees the following benefits in kind tax free:
- Staff parties:
- Free/subsidised meals:
- Mobile phone:
- Parking space:
- Sporting or recreational facilities:
- Removals expenses and benefits:
- Long service awards:
- Suggestion scheme:
HMRC allows an exemption of £150 for each employee each year for annual staff parties. You can read more about it in our Christmas blog here.
For 2014/15, an employer you can pay up to £40k in an employee’s pension scheme and the employee can use carry forward to pay in even more.
As long as meals are available to all staff an employer can avail a tax-free benefit.
An employer can pay up to £55 a week (£243 per month) in childcare vouchers which will be exempt from tax and NICs.
An employer is allowed to provide each employee with one mobile phone free of tax and NICs without needing to report it on the P11d form.
The provision of parking space at or near the employee’s place or work is a tax-free benefit provided it is available to all employees
If an employer provides employees the use of sporting facilities or a gym membership, then the cost of providing these facilities can be treated as non-taxable. This is however subject to certain conditions.
If an employee changes residence as a result of a transfer or start of a new job within the employer’s organisation, then the first £8,000 of removal expenses that qualify will be exempt from tax. This however needs to be reported on the P11d form.
If any of your employees is marking his/her 20th year of service you can present them with a monetary award without fear of income tax or National Insurance deductions.
If you’ve formally set up a suggestion scheme, which is open to all employees, you can give up to £5000 tax-free for each suggestion that generates a real financial benefit for the company.
P11d forms have to be submitted to HMRC by 6th July this year, and if there are any outstanding Class 1A NICs employers must pay them by the 19th of July. However be careful, filing a P11d form is complex and there are a number benefits that are taxable. Please use this article for information purposes only and consult a professional before taking any action.