Expenses and benefits returns P11D and P11D(b) for 2020/21 need to be filed by 6 July 2021. Meeting this deadline is important as penalties may be charged for returns that are filed late.
A form P11D must be filed for every employee who has been provided with taxable benefits and/or expenses in the 2020/21 tax year which have not been payrolled or included in a PAYE settlement agreement. Benefits covered by an exemption can be ignored.
The information that is needed in respect of each benefit depends on the nature of the benefit. In many cases, all that is needed is the cost to the employer of providing the benefit, any amount made good by the employee and the resulting taxable amount. However, for some benefits, such as company car and fuel and employment-related loans, more information is required.
The taxable amount will normally be the cash equivalent value. However, where the benefit is made available under a salary sacrifice or other optional remuneration arrangement, the taxable amount should be worked out using the alternative valuation rules, unless the benefit is one of the few to which these rules do not apply.
The P11D(b) is the employer’s declaration that all required P11Ds have been filed, and also the employer’s statutory Class 1A National Insurance return.
When computing the Class 1A liability, it is necessary to take into account taxable benefits within the Class 1A charge returned on the P11D and also any payrolled benefits. If all taxable benefits provided in the 2020/21 tax year have been payrolled (or included in a PSA), there will not be any P11Ds to file; however, a P11D(b) is still required.
Items included within a PSA are not included in the Class 1A National Insurance calculation on the P11D(b) – Class 1B National Insurance contributions are payable instead.
If an employer has not provided any taxable benefits in 2020/21, but did in previous years, and receives either a paper P11D(b) or a P11D(b) reminder letter, they will need to complete a nil declaration online on the Gov.uk website to avoid being charged a penalty.
There are various options for filing P11Ds and P11D(b)s:
- using a payroll software package;
- using HMRC’s Online End of Year Expenses and Benefits Service;
- using HMRC’s PAYE Online Service; or
- filing paper forms.
Whichever method is used, the forms must be filed by 6 July 2021. Employees must be given a copy of their P11D or details of their taxable benefits by the same date.
Any associated employer-only Class 1A National Insurance must be paid by 22 July 2021 if paid electronically, or by 19 July 2021 if paid by cheque.
Partner note: Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682), reg. 85.