What is Benefits in Kind?
Benefits in kind are benefits paid for including reimbursed expenses by the company for the employees including directors’ for their personal benefits. Such benefits are subject to Class 1A National Insurance Contribution (NIC) at 12.8% payable by the company. Examples of such benefits include provision of company car (taxable on the employee’s personal usage), healthcare insurance and so on.
However, expenses reimbursed to staff which are wholly exclusively and necessarily in carrying out their employment will not be regarded as benefits. Such expenses include mileage allowance claim, travelling, entertaining and so on. The employee is entitled to claim tax relief under Part 5 of section 236 to 383 ITEPA 2003 on those expenses.
What is P11D?
Every company has to submit P11D and P11D(b) forms for the period 6th April to 5th April each year to HM Revenue and Customs on 6 July including appropriate copies to employees.
P11D(b) form also called Return on Class 1A National Insurance Contribution Due Return on expenses and benefits – Employer declaration.
Who is required to submit Form P11D Expenses and Benefits?
The employer is required to prepare P11D expenses and benefits form for each employee/director earning more than £8,500 including the taxable benefits.
What information is required for the preparation of P11D?
Provision of company car
Details required including when the new car was provided to the employee/director, the cost of the new car and copy of the car registration documents (log book).
If there was a change or cessation in the use of the company car, the date the employee ceased to use the car is required.
Mileage Allowance
If the directors/Employees use their own car for business and are reimbursed by the company
- The amount reimbursed
- Total business mileage done by the employee for the year ended 5 April.
Health Insurance
If any health insurance provided by the company for the Directors/Employees, the details of the insurance company, the amount paid for each director/employee is required.
Other expenses
Details of travelling and entertaining expenses reimbursed to the employee/director.
What records your company would like to keep to assist your accountants in preparations of the P11D forms?
To have a recording system in place to keep track of all expenses reimbursed to individual employee particularly travelling and entertaining expenses.
Please feel free to email us should you need further assistance on P11D forms submission.
