Top 5 tips for making sure you get your P11d right

Posted on 8th June 2021 by David Rudd

Small business payroll

Ok, before we start, what on earth is a P11d?

A P11d is a part of small business payroll, it’s a form that summarises the “benefits” an employer provides to employees free of any tax.  These “benefits” attract employer’s class 1a national insurance and personal tax on the taxpayer who receives the “benefit”.

Some examples include the following paid by the company for the employee:

  • Private medical insurance
  • Company Vans available for private use
  • Gym membership
  • Company car (and fuel)

Over the years we have seen both sides of the argument when it comes to benefits in kind (from a small business perspective and HMRC).  Here are our 5 top tips:


1) Stop before you incur expenditure on behalf of your team

The easiest way to comply with HMRC rules around P11d’s is to not pay for expenditure which will create one.  A good example is providing fuel with a car, this is a very expensive benefit.

Seems like an obvious one but we know you’re busy running your business so it can be easier to just pay for something on behalf of your team.

Before you do, stop and think, will this be a benefit the team will not be paying tax on?


2) Put any benefits through your payroll

So you’re happy to pay for that expenditure for the team, what about putting the benefit through payroll? Great solution!

It means no P11d is due to be filed.  The downside – much more admin for your small business payroll and your accountant!

NB any taxes due will be collected on a monthly basis instead of in July (after the end of the tax year).


3) Prepare the numbers early

The Scouts approach of “Be Prepared” is the best advice here.

Preferably before you incur the expenditure get an idea and projection of what the P11d (and the associated taxes) will be.

Armed with this data you will then be in a much better position to understand the true cost of the expenditure to your business.


4) Ensure you file the P11d and pay any taxes

The filing deadline for the P11d forms is 6th July following the end of the tax year (so for the tax year ended 5th April 2021, you have until 6th July 2021 to file).

The associated taxes need to be paid by 22nd July following the end of the tax year.

Don’t forget to give a copy of the P11d to each member of the team who has a benefit in kind.


5) Get in touch with your accountant!

If you know you have paid for something on behalf of one of your team, let your accountant know.  The penalties for non-compliance with HMRC rules related to P11ds can be eye-watering.  Speak to your accountant sooner rather than later!


Need help?

Remember, the Steven Burton & Co team have many decades of experience between us helping business owners just like you. If you need a sounding board, some advice or a steer in the right direction, then get in touch.

David Rudd

David is an Accountant with over 15 years’ experience in helping a large number of different business owners in numerous sectors from consulting agencies to every area of construction you can think of.

At home dealing with numerous different types of accounting software from Xero to QBO and everything in between.  David is always on the lookout for new technology to help business owners to create more time for themselves and their teams.

With a healthy ambition of never resting on the results of yesterday, David is at his best when working with ambitious business owners who want to improve their businesses for eventual sale.

In his spare time, David is often found cheering on his two boys at football, building Lego (which he pretends is for his boys) or watching the latest TV series on Netflix.

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