What is a P11D form? - Ultimate P11D Form Guide

As an employer, certain routine employee expenses don’t need to be reported to HM Revenue and Customs (HMRC). These are referred to as ‘exemption’. Dispensations have been replaced by exemptions and employers can’t submit an application for a dispensation now. Employers don’t have to report certain business expenses and benefits like:

• business travel
• telephone bills
• business entertainment expenses such as client dinners, team outings etc.
• uniform and tools for work

To qualify for an exemption, the employer must either be:

• paying a benchmark rate or a bespoke rate, approved by HMRC, to the employee as part of their earnings
• paying back the employee the real costs

An employer should subtract and pay tax and NI on all expenses and benefits given to the employees, and inform about them to HMRC. Employers don’t need to apply for an exemption if they are paying HMRC’s standard rates or flat rate for permissible expenses. Employers only need to apply for an exemption if they want to pay bespoke rates to their employees.

P11D dispensation will not apply after 5 April 2016. HMRC was able to grant special consideration from reporting some expenses under section 65 and 96 ITEPA 2003. If an employer had agreed a bespoke rate with HMRC between 6 April 2011 and 5 April 2016 as part of their dispensation, the employer can apply to carry on using them. The employer can only apply the bespoke rates for upto 5 years starting the date they were approved.

The due date for filing P11D form is 6th July. If you will miss this deadline, you will incur fines & penalties from HMRC. Therefore, P11D form should be submitted to HMRC before the deadline. If you missed the deadline and even crossed the date of 19th July, your company will incur fines of £100 per month (or part month) per 50 employees.

In case you failed to file P11D form by November, you will receive a reminder along with the penalty amount from HMRC.

Initially, the employer will receive a reminder from HMRC stating that the P11d is overdue if the payment is not received by 19 July. Post this date, the employer will receive a penalty notice when the return is 4 months overdue and the minimum accumulated penalty amount is £400. To avoid paying such a huge amount as penalty it is imperative to submit the form latest by 19 July.

You can also face fine in case of incorrect filing of P11D form. If HMRC believes that your mistake is genuine and you took proper care before filing P11D form to HMRC, you may not face any fines or penalties but if HMRC believes that you acted carelessly and the error is done by you to deliberately mislead them or to hide any information, you may be charged with a penalty of 30%, 70% or 100% on the owed tax from HMRC.

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