Benefits in kind forms P11D are due
May 2006
It is time to start gathering together the information
to complete the forms P11D which report to HMRC details
of benefits and expenses provided to employees and
directors in the tax year to 5 April 2006. The forms
have to be submitted to HMRC by 6 July so you have
some time to track down the relevant information
and to complete the forms.
Some things to be aware of:
Company cars
The benefit is based on a percentage of the list price
plus accessories – not what the business paid
for the car. The percentage is linked to the CO2 emissions
of the car.
Provision of fue
Employees provided with free fuel for private as well
as business motoring will be assessed on a further
benefit calculated as a percentage linked to the CO2
emissions of the car and a set figure of £14,400.
This is a good time to check whether or not the individual
would be better off paying for their own private fuel.
Don’t forget that the employer also pays 12.8%
employer only Class 1A NIC on the value of broadly
all benefits in kind so there is a saving for the business
as well.
Vans
During 2005/06, for the first time, we had the situation
that where the private use of van is restricted to
ordinary commuting (home to work) then the scale charge
of £500 can be avoided. Make sure that contracts
and staff handbooks have been amended to reflect the
change as well as employees abiding by the rules before
deciding not to include the benefit.
Incidentally the £500 benefit is set to increase
six fold to £3,000 from 6 April 2007 so it may
be time to think about planning for this change as
you will need to consult with employees and put contractual
changes and monitoring procedures in place.
Incidental overnight expenses
HMRC allow employees to be paid £5 a night (£10
if overseas) for personal expenses frequently extras
on hotel bills which are tax-free. Unfortunately if
the limit is exceeded the full payment becomes taxable.
Make sure you are monitoring these expenses carefully
and reporting any amounts that should be taxed.
Internet link:
HMRC form P11D guidance
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