As the new tax year starts so does the build up towards the deadline for submitting forms P11d(b) and P11d to HM Revenue and Customs (HMRC). These forms report the Benefits in Kind that employees have received during the tax year along with business expenses reimbursed where there is no dispensation in place.
The forms place a significant administrational burden on all businesses because of the complexity of them and the potential penalties that HMRC can apply for late submission or incorrect disclosure.
The P11d documents for the 2010/11 tax year should be submitted to HMRC by 6 July 2011. If you file your documents late you will be charged a penalty of £100 per month or part month for every 50 employees. An incorrect P11d can incur a maximum £3,000 fine.
The p11d’s are complicated forms and take a lot of time to complete. One way to reduce a lot of this administrative burden is to apply for a dispensation with HMRC. Contrary to popular belief, even though no tax is due from business expense reimbursements, the amounts reimbursed still need declaring on an employee’s P11d along with a corresponding s336 election. If you agree a dispensation with HMRC you can agree not to include these reimbursed business expenses on the forms. This can save hours, if not days, going through your records to collate all of the required information.
