Jamesons blog

If you provide benefits to employees or reimburse expenses then its time to get these reported to HM Revenue & Customs on forms P11D. The deadline for submission is 7 July and late filing will give rise to a £100 penalty even if no tax is due.

In our experience businesses quite often miss out benefits that they have provided when filling in P11D's. It is quite obvious that a company car or health care subscription is a benefit but what about allowing employees to use company equipment at weekends or loans to a director or employee?

Expense payments are also often excluded, but they should be recorded on P11D's for each employee who has been reimbursed for expenses incurred and they should be supported by an expense claim signed by the employee if the expense relates wholly and exclusively to business.

To save the paperwork around expense payments consider applying for a dispensation from reporting expenses from HMRC. Its too late for the 2010/11 year, but applications now will be back dated to 6 April 2011.

Where employees use there own car for business you can pay them up to 40p a mile without having to report this on a P11D. If they take a passenger then you can increase this to 45p per mile. Remember that the rate drops to 25p per mile after 10,000 miles (since start of tax year). Any excess payments will need to be reported on the P11D.

If vans are provided to employees and are available for private use then a benefit in kind arises, there is also a benefit if fuel is paid for by the business. Unlike company cars, no benefit arises if private use is insignificant or for driving to/from work.

Next week I'll look at ways to make the most of benefits in kind with low or no tax effects.

Simon Garner