In the run-up to the P11D filing deadline of 6 July, it is worth reminding that the completion and signing off of these forms should not be taken lightly. The full facts surrounding each employee and what benefit in kind they have received, together with any expenses (although subject to a dispensation being in place) needs to be precisely established. It is only then that one can establish the correct tax analysis and complete the appropriate box on the form.
An often heard comment when completing P11Ds, is that nothing has changed this year so we have just copied the figures from the previous year’s forms. Whilst this may of course be true, it may be storing up problems for the future. Consequently we would strongly urge you to check whether this is the case. If you would like us to undertake our mock HMRC P11D visit to test your systems then please let us know and we will arrange for one of our specialist employment tax consultants to visit you.
From previous experience, some areas where clients have had difficulties in the past are the provision of vehicles (cars / vans). This also includes deciding if / whether a vehicle is a pool vehicle. It is crucial that if a vehicle is a pool vehicle that there is evidence to support such a claim. If you incorrectly identify a vehicle as being a pool vehicle and do not report it on form P11D, then this can be a very costly mistake, as not only would HMRC seek to collect the unpaid tax, there would also be Class 1A NIC due, as well as interest and a penalty.
Another area where clients trip up is the provision of interest-free loans. The most common being the overdrawn directors loan account which is often forgotten about. It may be worth checking to see if a loan account has been operated in the year and acting accordingly.
There are plenty of pitfalls waiting out there for clients, and armed with an expert adviser you will be able to navigate a path around these to ensure that any possible future enquiry by HMRC does not lead to any further taxes falling due.
If you would like to arrange for one of our employment tax consultants to visit you, please contact us. Alternatively if you would like to find out anything further regarding our employment tax services, please click here.
