The deadline for employers to file their benefit in kind forms (6th July) is fast approaching.
If you are providing your employees (including directors!) with any form of benefit, then you are almost certain to have file forms P11D with HMRC by 6th July. HMRC do charge penalties of £100 per month (per 50 employees) for lateness.
Here are a few tips:
- Remember that the list price of any company car is based on when it was new. This is very important to remember, especially where second hand cars have been purchased.
- Ensure that you report any private fuel benefit. These days it is rarely beneficial to provide private fuel, and we usually recommend that the employee reimburse their private mileage at HMRC rates (current rates can be found here).
- Expenses must be reported on the P11D forms, inclusive of VAT. This means that you may have to double check the invoice to establish the correct amount to be reported.
- Staff entertainment – often missed by employers is the fact that staff entertaining is only exempt up to a maximum of £150 per head per year. Going over this will see a benefit arise.
- Company vans – the rules surrounding private use of a van are more relaxed than those for cars. Ensure that the van is not only available for private use (which is the test for cars) but also actually used for private purposes. This distinction is often missed by employers.
- Remember that an employer can provide one mobile phone to each employee without giving rise to a benefit. The employer, however, cannot reimburse a staff member for their own personal mobile phone without creating tax and NIC liabilities.
- Travel and subsistence must be reported on Form P11D, unless the business has a dispensation from HMRC. In any other circumstance, the amount must be reported on the form, with the employee making a separate job-related expense claim.
- Company credit cards must only be used for business purposes. Any private expenditure must be reimbursed by the employee, otherwise a taxable benefit will arise.
- Professional subscriptions are frequently covered by HMRC approval. Check the HMRC list here to ensure you don’t end up paying Class 1A NIC when you don’t have to!
- If in doubt, seek expert advice!
At Coburn McKenna we help our clients through the hassle of filing their P11D returns, ensuring they remain free to focus on their business. If you would like to see how we can help, contact Mark McKenna on 0151 489 1010 or send him an email.