Two days to go until the P11D deadline, which is on the 6th of July 2019. So, it’s not too late for you to meet the deadline. By law, at the end of each tax year, HMRC must be provided with details of expenses, benefits as well as facilities provided to your employees and directors during the tax year.
Don’t forget that since 6 April 2016, dispensations are no longer available. However, you can still apply for an exemption and avoid the need for reporting on business travel, business entertainment expenses, phone bills, uniforms as well as work tools. Therefore, it’s in your best interest to get this done.
In order to qualify for an exemption, you must be:
- Paying a flat rate to your employee as part of their earnings. This must be either a benchmark rate or a special rate approved by HMRC
- Paying back the employee’s actual costs
Currently, you don’t need to apply for an exemption if you’re paying the HMRC’s benchmark rates for allowable expenses. HMRC states that you must also have a system in place to check the benchmark or special rate payments.
Also, your employees aren’t allowed to check their own expenses, therefore someone else within your company needs to do this to make sure they’re legitimate. Tell employees to keep proof of their expenses, for example receipts or bills, in case you need to check them.
Another option is the payrolling benefits and expenses, in order to remove the necessity of providing P11D’s. Again, well worth thinking about to relieve the stress of the annual P11D rush as well as the cost!
In order to take advantage of this facility you must register with HMRC before the start of the tax year you want to payroll the benefits for.
If you need any assistance, contact MP Payroll Solutions and we’ll happily assist you.