Form P11Ds for 2014/15 should be submitted to HM Revenue & Customs (HMRC) on or before 6 July and any liability to class 1A National Insurance should be paid by 19 July, or 22 July if payment is made electronically.
A fixed penalty of up to £300 per form can be charges for P11Ds that are not sent in on time, with further penalties of up to £60 per form each day until they are filed.
What is Form P11D?
The P11D is a statutory form required by HMRC from UK based employers detailing the cash equivalents of benefits and expenses that they have provided during the tax year to their directors, and employees earning at the rate of more than £8,500 per year.
Changes from 2013/14
Beneficial Loans
Interest-free loans, up to £10,000 are now exempt. Before 6 April 2014, the amount was £5,000 and the official rate of interest, as determined by HM Treasury, that applies to beneficial loans was reduced from 4% to 3.25% from 6 April 2014, the first change since the 2010/11 tax year.
Notional payments
When an employee receives a “non-cash payment” that is regarded as a readily convertible asset, the employer is required to calculate and deduct PAYE taxes (income tax and National Insurance) based on that payment.
It is often the case that, when the PAYE taxes relate to a “non-cash” asset, there is insufficient cash salary or wages from which the tax can be deducted.
Until 5 April 2014, if the employee had not paid to the employer the PAYE taxes otherwise due within 90 days of the receipt of the non-cash asset, the outstanding PAYE would be treated and taxed as if it were a loan being written off.
It would therefore be shown as a benefit on the P11D. There was no tax refund facility even if the employee subsequently made a late, but full, reimbursement.
From 6 April 2014, the deadline for the employee to make reimbursement has become 90 days from the end of the tax year (4 July) in which the non-cash payment was treated as received.
If you would like to discuss your businesses requirement to complete a P11D please get in touch.
