form p11d - expenses and benefits

tax year end reporting – expenses and benefits form P11D
Employers are required by law to give particulars of the expenses payments, benefits and facilities provided to directors and employees who earn at a rate of £8,500 or more per year to HM Revenue & Customs (HMRC) by the end of each tax year (6 April to 5 April). This information must be provided on the official form P11D. A form P9D is used for directors or employees who earn at a rate of less than £8,500 per year.

make life simpler
You do not need to include expenses payments or benefits on a P11D if that item is covered by a P11D Dispensation or a PAYE Settlement Agreement (PSA).

haysmacintyre can assist you by applying and negotiating for these agreements with HMRC.

form P11D dispensation
A dispensation is a notice from HMRC that removes the requirement to report qualifying business expenses and benefits to them at the end of the year on forms P11D or P9D. It is important to ensure that your agreement includes all the relevant expenses applicable to your organisation. There is no point in putting an agreement in place only to discover that you have omitted one particular expense which then still requires you to prepare a P11D. haysmacintyre can work with you to ensure you have everything covered.  Once granted, dispensations last indefinitely, unless reviewed or revoked by HMRC.

PAYE Settlement Agreement (PSA)
A PSA is a mechanism whereby the grossed-up tax and NIC liabilities on certain taxable benefits and expenses, chargeable on employees, are paid by the company. “Grossed-up? means that the company has to pay tax on the tax settled for the employee.

Benefits that are generally included in a PSA are ones that are minor, irregular or difficult to quantify on an individual basis. An example of this would be staff entertainment such as staff leaving drinks or other social events for staff only. The cost would give rise to a taxable benefit; however, to identify the cost attributable to each employee would be difficult. To avoid the charge being levied on the employees, an agreement is made with HMRC that the company will settle the tax liability on the employees behalf.

PSAs are annual agreements, which means that you need to make a new agreement each tax year.

haysmacintyre can work with you to identify the items to include in your application and negotiate on your behalf with HMRC should any queries be raised. 

employer compliance health check – peace of mind
Our clients have benefited from periodic health checks during which we undertake varying levels of review.  Typically this involves a run through of your systems and procedures and a discussion around your particular business circumstances.  The benefit of such a review is the opportunity for you to identify any problems you may have in advance of any HMRC employer compliance review and give you peace of mind; also to strengthen processes to ensure compliance is not compromised by process weaknesses.
 
With the benefit of our experience we can quickly identify any problem areas and make recommendations to you for remedial action.  The review will be either a telephone call, a more in depth meeting with a summary report or, a full compliance review backed up by a written report and action plan depending on your particular circumstances.

Under the current penalty regime if you take reasonable care to get your tax right, HMRC will not penalise you, even if you make a mistake.

taking reasonable care includes:

• keeping accurate records to make sure your tax returns are correct
• checking what the correct position is when you don’t understand something
• telling HMRC promptly about any error you discover in a tax return or document after you’ve sent it

If you don’t take reasonable care HMRC will penalise inaccuracies. Telling HMRC about inaccuracies will substantially reduce any penalty due, in some cases to zero.  HMRC advice is that you should check your systems and records to help produce accurate
tax returns.

If you would like us to assist you please contact our employment tax team .  Similarly if you have concerns about any other areas of tax we can put you in contact with the appropriate specialist adviser at haysmacintyre.

For more information please contact:

Anne Gregory-Jones
partner
020 7969 5520
agregory-jones@haysmacintyre.com