When to use a P11D form if you’re self-employed

Here we take a look at when to use a P11D form if you’re self-employed.

What is a P11D form?

If a company provides their staff with taxable benefits, or ‘benefits in kind’, then a P11D form will need to be filled out and sent to HMRC.

It’s used to declare any items or services that either you or your employees have received via your company in addition to a salary.

This notifies HMRC of any tax or National Insurance Contributions (NICs) that the company may need to pay on these benefits.

What do I include on a P11D form?

Any benefit or expense that hasn’t been taxed through payroll will need to be included on a P11D form.

Typical benefits in kind that you would need to mention are:

• Any private healthcare provided
• Health insurance
• A company car
• Life insurance
• Personal use of a company asset, such as a computer

P11D exemptions

Previously called dispensations, exemptions are routine employee expenses that you don’t need to report to HMRC.

You will only qualify for an exemption if you are either paying a flat rate to your employee as part of their earnings (this will need to be a rate approved by HMRC), or paying back the employee’s actual costs.

Examples of the types of benefits that don’t need to be reported (if you qualify for exemptions) include:

• Business travel
• Phone bills
• Business entertainment expenses
• Uniforms or tools that are used for work purposes

When do I need to submit a P11D form?

A P11D form needs to be sent off on an annual basis and is not dependent on how your company year falls.

The deadline date for completing and filing to HMRC is the 6th of July and the amount owed will need to be paid by the 19th of July.

Missed deadline penalties

As is the case for other tax liabilities, missing the deadline date will result in penalties.

You’ll receive a fine of £100 per 50 employees for each month or part month that your P11D form is late.

You will also be charged penalties and interest if you’re late with payment.

Keeping records

It’s vital to keep records as proof of any benefits and expenses – you may even find yourself in a situation where HMRC asks to see them should they make an inquiry. 

You must keep these records for at least three years from the end of the tax year they relate to.

Examples of the type of information you’ll need to have is:

• The date and details of every expense/benefit you provide
• Any payment your employee contributes to an expense/benefit.