Forms P11D – Common Errors

In many cases, we assist client’s to fill in the end of year P11Ds to report the value of benefits provided to employees including company cars and medical insurance.

However many businesses decide to complete their own P11Ds and we have listed our top tips below to ensure that forms P11D are completed correctly.

1. Watch for legal fees paid by the business for directors and employees. If these relate to personal matters, it’s probable that these should be declared on forms P11D.

2. Look out for loans made to directors and employees. These may not be formal loans made but could be if a director has an overdrawn loan account if they have taken significant funds out of the business for either a short term loan or perhaps have drawn more funds than they had available.

3. If the business pays for the mobile telephone costs of an employee or director, you should ensure that the contract for the phone is between the business and the phone company otherwise there may be a benefit in kind to declare.

4. If the business provides company cars make sure that you include the original list price of the car (not the cost to the business), the correct details for C02 emissions and if applicable the dates that the company car was provided or withdrawn during the year.

5. If the business provides fuel for company cars, make sure that this is declared on the P11D.

6. If the business reimburses employees for travel, subsistence, professional subscriptions etc then these costs should be returned to HMRC unless you have agreed a dispensation with HMRC.

7. If the business has gifted an asset to an employee or director, or even allowed use of an asset, this may be required to be returned on form P11D.

8. Ensure that employees keep records of business miles travelled and that mileage allowance is not paid in respect of private journeys.

We have noticed an increasing trend for HMRC to review the PAYE affairs of a business, particularly where one of the above errors is made.

If you wish to discuss any of these issues, please make contact with a member of our tax team on the following numbers:

Darlington – 01325 349700
Durham – 0191 3842244
York – 01904 784400