P11D deadline approaching!

6 July 2018 is the deadline for employers to submit forms P11D detailing any benefits in kind received by their staff in the 2017/18 tax year (such as private medical insurance and company cars).

Please also note that if an employee might have benefited by the business paying for an item relating to the employee’s personal affairs, but it was intended that the employee would make good the transaction by reimbursing the employer, the reimbursement needs to take place by 6 July 2018 in order to ensure that a benefit in kind charge will not arise. This rule also applies to company Directors.

For example, a Director could use a company credit card to purchase their weekly shopping. In the past the transaction would probably be made good by posting the purchase to the Directors Loan Account. This would often not happen until the accounts were being prepared, which would often be after 6 July. In order to avoid any question of such transactions now being taxable, it needs to be shown that the process of making good has been undertaken by 6 July. If the transaction was not made good until after 6 July, then a benefit in kind charge will apply even if the matter was made good after 6 July.

The rules relating to the preparation of P11Ds are complex, and HMRC can apply some onerous penalties if forms P11D are not accurately submitted on time; so please let us know if you think it is possible that you might have a requirement to complete P11Ds, assuming this has not already been taken care of, or if you have any queries about the benefit in kind rules.