A P11D is a statement of any benefits you may be enrolled (in the UK) under at your place of work that is considered a taxable benefit (Your HR Department can probable confirm this for you). As the deadline to send the data to HMRC was in early July I thought this would be the best time to discuss it!
A taxable benefit means HMRC consider this as a benefit that tax should be paid on. This can either be paid by your company or by you depending on the policy your place of work enforces.
If the tax liability falls to you, your employer will issue a P11D statement to reflect what the monetary value of your benefit is. For example if you enrolled for Medical insurance and this was worth £400 this should show on your statement.
Now there is always a bit of confusion with what year the P11D relates to. To clear things up the P11D is issued in retrospect of the benefits you were enrolled under in the previous tax year. So this years’ P11D is issued in July 2014 and this will reflect all the taxable benefits you were enrolled under between April 2013 – March 2014 (2013/14 Tax Year).
Once HMRC have the data – they calculate how much tax is due. Normally this is reflected in a change to your tax code to lower your personal allowance so that the extra tax is paid.
Your current tax code is 1000L = £10,000 personal allowance
Benefit is worth £400
HMRC change tax code to 10,000 – 4000 = £6,000 personal allowance
New Tax code – 600L
This will usually kick in between July and August and the code will remain this way until the tax is paid.
So it is quite an easy process and it does not require the employee to do anything as most employers will do this on your behalf.
You can always ask your HR or payroll department for help if you do not fully understand the process.
Until next time…