P11D Common Errors
As the 6 July deadline for submission of forms P11D and P11D(b) is impending, HM Revenue & Customs (“HMRC”) have released a list of common mistakes made when filing in the forms:
1. Duplicate forms
Although the forms can be submitted online, HMRC still accept forms sent through the post. Some employers have sent the same forms by post and online, leading to delays processing the forms and possibly incorrect penalty notices.
2. Wrong form
When using a paper form, the top right-hand corner should state “P11D Expenses and benefits 2014-15”, any other year means the wrong form is being used.
A P11D for a director should include a tick in the “director” box.
4. Missing description
A description or abbreviation is required when filling in certain sections of the P11D – Sections A (assets transferred), B (payment made on behalf of an employee), L (assets placed at the employee’s disposal), M (other items), N (expenses payments made to, or on behalf of, the employee).
5. Cash equivalent box
The “cash equivalent” box should be the cost to the employer minus any amounts made good or which have already been taxed elsewhere. Some forms are incorrectly completed by only having an entry in the “cost to you” box, this amount should be carried over to the “cash equivalent” box if there are no deductions.
6. Confirmation there are no benefits in kind
If there are no reportable items to be entered on the P11D form for any employee or director, then HMRC should be informed. This can be done electronically or by post on a P11D(b). If HMRC are expecting to receive a P11D(b) and one isn’t filed, then a late filing penalty will be charged.
7. Mixed use benefits
Where assets are used for a mix of business and private purposes, sometimes only the value of the private use portion is included. The full gross value of the benefit must be included.
8. Private fuel
Entries for company cars occasionally don’t include the details of fuel benefit, even though the benefit applies. This results in an amended P11D having to be submitted or penalties being charged.
9. Company car availability
Where a company car has been unavailable for the employee’s use, the benefit may be reduced. There are rules to follow to calculate which dates apply, sometimes the incorrect “from” and “to” dates in the “dates car was available” boxes are used.
The above is not meant to be an exhaustive list but just some examples of more common mistakes. Such errors may lead to a penalty notice for late filing (£100 per 50 employees for each month the form is overdue), interest charged on any late payment of Class 1A National Insurance, potentially a £3,000 penalty per incorrect form and/or a penalty up to 100% of the Class 1A charged to the employer.
The forms for the year ended 5 April 2015 need to be submitted to HMRC by 6 July 2015 to avoid late filing penalties. If you need any assistance with the preparation of forms or you have concerns about particular aspects, please contact our Tax Director, Jenny Marks.
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