Employment Benefits in Kind Returns
Do you provide your employees with any benefits as a perk of the job, or make regular payments to directors that could be classed as a loan?
 
If the answer is yes then as an employer you are required to complete the required forms and submit them to your tax office by 6 July 2017.
 
If any company directors have an overdrawn account over £10,000 at any point in the year where loans were made and not repaid, or the dividends are not being declared on the 2017 tax return it needs to be reported.
 
There are three major forms relating to benefits that may need completion. Forms P11D, P9D and P11D(b).
 
Form P11D is required for every Director and employee who is paid at an annual rate of £8,500 or more, if you have provided them with any benefits or expenses, during the tax year 6 April 2016 to 5 April 2017.
 
Form P9D is required for every employee whose earnings are at a rate of less than £8,500 per annum.
 
Most benefits in kind attract Class 1A NIC and form P11D(b) is used to calculate the Class 1A NIC due by the employer.
 
On the P11D forms, the benefits have to be divided into two types to facilitate the tax and National Insurance calculations that follow.  Some items reported on the form do not create a tax charge others do.  
 
Tax and National Insurance is not charged if the expenses are wholly and exclusively for business.  If you have a dispensation for these expenses they do not need to be reported.  However any other Benefits in Kind (company cars, medical insurance etc) would need to be reported.
 
Please note that you cannot gain a dispensation in retrospect of a tax year, however if you do pay expenses and would like to remove the administration burden of completing these returns you can complete a dispensation form going forward.
 
The Class 1A NIC charged on company benefits provided by an employer in the year ended 5 April 2017 is due for payment on 19 July 2017.  If it’s not paid by that date, the tax office will charge interest.
 
Please see the attached checklist to help you decide if you need to report anything on the P11D. 
 
Do not ignore this and get the returns filed as soon as possible as there is a penalty of £100 (for every 50 employees) if the forms are not received by 6 July 2017, with an additional £100 penalty for each further month late.
 
We would be pleased to offer assistance in completing these forms so please contact us to see how we can help you. 
 

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