May 2011 Monthly News

P11D Deadline

Another year has passed and the time has come again to prepare and submit P11D’s and P11Db. These forms can be submitted using the paper forms or online.

The deadline for submitting the forms to HMRC is 6 July 2011. If there is any class 1A National insurance due this must reach HMRC, by 22 July 2011 if you are paying online, or by 19 July 2011 if paying by cheque.

HMRC will impose penalties for late submissions and late payments.

A P11d is a form to record all expenses and benefits you have given to an employee who earns over £8,500 during the year. One form must be completed for each employee. If the reimbursed expenses are wholly, exclusively and necessarily incurred for the purposes of the business, you can prevent these expenses becoming taxable by filling in form P87 or writing to the tax office with reference to S.366. If the employee completes a self assessment tax return the P11D expenses can be entered on to the return, this will then correct your taxable income.

A few examples of expenses and benefits

·        Company cars

·        Medical insurance

·        Gym membership

·        Overdrawn directors loan account

·        Reimbursed expenses

If you are an employee and receive a P11d from your employer you need to check this carefully as you will be taxed on these expenses and benefits. HMRC will collect any tax due through your PAYE coding. It is down to you the individual to ensure your PAYE coding is correct and you are paying the correct tax. Over the last year we have seen that the PAYE codes have not been correct, if you circumstances change then you may be hit with an underpayment of tax as HMRC have not been able to collect it through your coding.

It is therefore advisable you seek a professional who can look over your PAYE coding notice to ensure you are being taxed correctly.