If you’re reading this article, then chances are you have at one time or another either received a P11D form from your employer, been responsible for preparing P11D’s for employees – or both.
What are they?
The P11D forms are formally described as covering the Return of Expenses and Benefits in Kind provided to Directors and Employees.
More simply put, if you run your own business, you are required to notify H M Revenue and Customs (HMRC) whether your business has provided any benefits, made any private payment on behalf of, or reimbursed employees and/or Directors for expenses. This information usually has to be disclosed and declared on a Form P11D.
The forms need to be completed for the tax year, so cover the period 6 April 2017 to 5 April 2018.
The benefits may be subject to a charge to Class 1A National Insurance, which also needs to be calculated, summarised and declared on Form P11D(b).
Some common benefits
- Company cars
- Provision of Living Accommodation
- Interest free or low interest Loans
- Private Medical Insurance
What do you need to do?
If you feel that these forms may be relevant to your business and you require some assistance, please contact Rawlinsons for some guidance. We will be able to provide you with all the help that you need, whether it is just some support or completing all the paperwork for you if you ask us to.
Deadline for submission: 6 July 2018
The Forms P11D need to be submitted to HMRC by 6 July 2018, along with the declaration of Class 1A National Insurance contributions due (P11Db).
A copy of the individuals Form P11D needs to be handed to them by the same day.
Deadline for payment: 19 July 2018
The Class 1A National Insurance must be paid to HMRC by 19 July 2018.
Optional remuneration arrangements
If an employee foregoes any amount of earnings in return for a Benefit in Kind since 6 April 2017, the taxable value of the benefit is now the higher of the amount foregone or the previous taxable value of the benefit. These are known as Optional Remuneration Arrangements (OpRAs).
These rules apply to all benefits, including previously exempt benefits. However, pensions, pension advice, childcare, Cycle to Work and cars with emissions of 75g CO2 /km or less remain tax advantaged.
There are some transitional rules in place for those with existing arrangements on 6 April 2017. If you would like any guidance on these changes, please contact Rawlinsons.
Increase in diesel supplement
From 6 April 2018, the diesel supplement, relating to the car benefit and the car fuel benefit charge increased from 3% to 4% for all cars that aren’t certified to meet the Real Driving Emissions 2 (RDE2) standard.
The Certificate of Conformity available from the manufacturer will confirm whether the car is RDE2 (also known as Euro 6d) compliant. Although it is not expected that there will be any cars on the market that meet the RDE2 standard prior to 2019/20.
The diesel supplement will continue to apply to those cars propelled solely by diesel (not diesel hybrids) and registered on or after 1 January 1998, which do not have a registered Nitrogen Oxide (NOx) emissions value. It will also apply to models registered on or after 1 January 1998, which have a registered NOx emissions value that exceeds the RDE2 standard.
Simplifying PAYE settlement agreements (PSA)
A PSA allows you to make one annual payment to cover all the tax and National Insurance due on minor, irregular or impracticable expenses or benefits for your employees. The process for administering and agreeing PSA has changed to reduce the burden for employers.
From 6 April 2018, a PSA will be agreed between the employer and HMRC and will remain in place for subsequent tax years unless varied or cancelled by the employer or HMRC. This means that employers will no longer have to renew their PSAs annually, so long as this enduring agreement remains accurate.
The government have announced that the tax and National Insurance (NI) relief offered through childcare vouchers will remain available to new applicants for a further six months.
It had previously been announced in the 2016 Budget that from 6 April 2018, childcare vouchers would be closed to new entrants and replaced by the new Tax Free Childcare (TFC) scheme.
However, the Government have announced that the new cut-off date will be 4 October 2018.
Need some help?
For more details about P11D’s and for guidance on what needs to be included, call our team on 01733 568321.