Why You Cannot Afford to Overlook Forms P11D

Often seen as an administrative headache by many companies, the importance of P11D compliance is frequently overlooked as a consequence.

There are however, significant penalties for non-submission or incorrect forms P11D. PAYE compliance is becoming more complex, and it is an area that HM Revenue & Customs view as a target for generating additional revenue, both in taxes and, more importantly, penalties.  Consequently, all employers should ensure that their systems and procedures are robust, and would stand up to inspection.

When P11D errors occur

Common mistakes include the treatment of company vehicles, pool cars, and the provision of benefits for staff. 

Failure to declare payments made to staff for travel, subsistence and entertaining expenses often occurs where there is no private use, yet a dispensation has not been requested and obtained. 

HMRC will pay particular interest in such payments and may charge a penalty even though there is no loss of tax.

Best practices for future P11D filings

Once your 2024/25 P11D forms have been filed, it may be worth considering whether you could:

•  Request dispensations to reduce administration for 2025/26

•  Consider alternative ways of rewarding staff which may not be taxable

•  Review changing vehicles that might benefit the company and employees

•  Ensure fuel is provided tax efficiently to ensure both the company and employees benefit

Get your payroll and company benefits in order

P11D is a useful task for reviewing the benefits you offer your employees, but it can be complex and time-consuming. Our payroll team at Shorts can assist in the P11D filing process and offer support on reviewing company benefits to ensure its long-term sustainability and growth.