News

If you are an employer and provide expenses or benefits to employees or directors, you may have to report these to HMRC and pay Class 1A National insurance.

Employers must keep accurate records of all expenses and benefits provided to employees to show the full details of the expenses or benefit provided and any contributions the employee has made towards these.

Any items that a company pays for and an employee benefits from will need to be included on a P11d form. Examples of some of the reportable expenses and benefits include:

• business car / van which is also available for private use
• non business related fuel
• payment of non business travel and entertainment expenses
• payment of private medical insurance
• provision of living accommodation
• interest-free / reduced interest loans to employees (including overdrawn directors current accounts)
• business assets provided to an employee/director with significant private use

At the end of the tax year employers must complete and submit P11D forms to HMRC for each employee provided with a Benefit in Kind. Employers will also have to complete a P11d(b) to report the Class 1A National insurance that will need to be paid by the employer. The rate at which the Class 1A NIC is payable is 13.8% on the cash equivalent value of the benefit provided.

The employee or director will also be liable to income tax on the value of their benefit at 20%, or if they are a higher rate or additional rate tax payer at 40% or 45% respectively.

The forms must be filed with HM Revenue & Customs before 6^th July 2019 and the Class 1A NIC must be paid on or before 19^th July 2019 for postal payments or 22^nd July 2019 for electronic payments. Please note that if a P11D(b) form has been issued by HMRC to you it must be returned before the deadline, even if there are no benefits to report. Failure to submit the relevant return and/or pay any NIC due will result in interest and penalties being imposed by HMRC.

If you require CavanaghKelly to compete and submit these forms on your behalf, we would appreciate it if you could complete the attached checklist for each employee and return it to us via IRIS OpenSpace by Wednesday 26th June 2019 in order that we may complete the forms on your behalf.

 

IRIS OpenSpace

CavanaghKelly uses IRIS OpenSpace, an industry leading platform which offers an encrypted and secure way of sharing information. By signing up to IRIS OpenSpace portal you will be able to access and share documents with CavanaghKelly staff only such as your accounts, tax returns and other documents such as P11D checklists. The documents uploaded and shared will be encrypted for your safety and will comply with GDPR regulations. If you would like to register for IRIS OpenSpace, please contact us for further information.

If you have any difficulties in obtaining the information requested or have any queries, please do not hesitate to contact Paula Gallagher in our tax department.