P11Ds: Most common mistakes

Completing the annual return of benefits and expenses form P11D carries many risks. A late or incorrect submission, or failure to submit can result in unnecessary penalties and perhaps even result in a HMRC PAYE compliance review.

Therefore, as companies prepare their 2014/15 P11Ds for submission by 6 July, we highlight some common mistakes to watch out for:

P11D dispensations

  • Not reporting all expenses, irrespective of whether tax relief is available, where no P11D dispensation is held.

  • In group structures the P11D dispensation has not been extended to cover all PAYE schemes.

  • Expenses not reported for certain groups of employees e.g. directors, not included in the dispensation.
General P11D completion

  • Not advising HMRC that no P11Ds are due through the final EPS return for the tax year.

  • Submitting duplicate P11D information on paper where P11D information has already been filed online.

  • Using a paper form that relates to the wrong tax year – check the top right hand corner of the first page.

  • Not ticking the 'director' box if the employee is a director.

  • Not including a description in the appropriate box where amounts are included in sections A, B, L, M or N of the form.

  • All P11D entries should be VAT inclusive, irrespective of whether the VAT can be recovered.
Expenses

  • Not including the cost of utility and related bills paid for accommodation even where the accommodation itself is exempt.

  • Expenses for employees who work at home not reported where in excess of £4 per week.

  • Home to work and other private mileage (e.g. call outs and excess fares) not reported.

  • Reimbursement of an employee’s personal mobile phone bill not reported (exemption only applies to employer provided phones).

  • Where company credit cards are used, expenses reported at both Sections C and N.
Benefits

  • Incorrect apportionment of private medical insurance where premiums renewed during the tax year.

  • Overdrawn directors’ loan accounts not reported as a beneficial loan.

  • Omitting entry at Section B Where PAYE on share option gains not recovered within 90 days.

  • Pool cars used privately by employees not reported.

  • Incorrect CO2 and/or fuel type for company car.

  • Incorrect List Price values used for company cars (e.g. wrong model, ignoring accessories).

  • Showing 5/4/15 in “To” box when company car continues to be provided into next year.
The deadline for submitting your 2014/15 Forms P11D and P11D(b) is 6 July 2015.

If you have a Class 1A NIC liability as shown on the P11D(b) for 2014/15 the payment deadlines are as follows:

  • postal payments 19 July 2015;

  • electronic payment 22 July 2015.
For further information please contact our Employer's Support and payroll team.