The P11D form requires employers to report the benefits in kind their employees receive from the organisation. For many employers this year brought unanticipated addtional expenses relating to Covid-19 as they migrated employees to working from home.
Updated 9 July 2020
The P11D is the form employers use to report the benefits in kind which their employees receive from the organisation. These can be items or services in addition to their salary – such as private healthcare or company cars.
The P11D form must be filed with HMRC every year by the 6th July and any tax due paid to HMRC by the 22nd July of that year. Covid-19 related expenses will fall into both 2019/20 and 2020/21 tax years due to the prolonged lockdown measures.
Update: 9 July 2020 – Coronavirus Testing
HMRC have issued a statement after publishing guidance which indicated that employees would face a taxable benefit-in-kind (BIK) when their employer pays for coronavirus testing.
The HMRC guidance published on 6 July had said that, if an employer paid for a coronavirus test, their employee would be required to pay income tax on that benefit.
Since then a Treasury spokesman has said: ‘Given the importance of widespread testing, we want to ensure that all employers who wish to provide third-party testing to their employees can do so without increasing their tax liability. So, we will introduce a new income tax exemption for Covid-19 antigen tests provided by employers. HMRC will amend its guidance as soon as possible to reflect this change.’
For further guidance, see here
Has the lock-down affected your P11D submission?
The P11D form should include anything a company pays for which the employee benefits from. There are some exceptions for expenses such as business travel, business entertainment, credit cards used for business purposes and fees/subscriptions.
During the UK’s Covid-19 lock-down, many companies took on additional expenses as they migrated employees to a home working environment. HMRC has recently clarified how to treat certain expenses and benefits provided to employees during coronavirus. You can find more details here and here, however we’ve also given a simple overview in the table below.
Remember the P11D submission on 6 July 2020 only covered expenses/benefits paid between 6 April 2019 to 5 April 2020. The P11D submission on 6 July 2021 will cover expenses/benefits paid between 6 April 2020 and 5 April 2021.
Employees affected and not affected
HMRC’s recent clarification addresses employees who worked from home due to the coronavirus because either the workplace had closed, or they were following advice to self-isolate. Working from home related expenses should not apply to furloughed workers eligible for the Coronavirus Job Retention Scheme.
Coronavirus-related expenses – taxable vs non-taxable benefits
Table 1 – Homeworking, accommodation, company car availability and volunteer fuel and mileage costs during Coronavirus
Further notes from table 1 for Company Car availability – Where restrictions of movement applied because of coronavirus and prevented a company car being handed back or collected HMRC will accept the car is unavailable if it meets these criteria.
Table 2 – Transport costs and meal provision during Coronavirus
Reviewing Salary Sacrifice arrangements
Changes in circumstances because of coronavirus are accepted as a lifestyle change which allows salary sacrifice arrangements to be reviewed. If an employee chose to amend a salary sacrifice arrangement because of covid-19, the change must be reflected in the terms and conditions of their employment.
Can we help?
If your organisation needs help and guidance in its P11D submission this year, please contact one of our specialist team on the right of this page.
Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary, if you would like advice or further information, please speak to your usual Shipleys contact.
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