P11Ds - Return of Expenses and Benefits

May 23, 2018

It is that time of year again when your organisation’s P11D forms will need to be prepared and submitted to the Inland Revenue. The most common entries being the car or van benefit, with or without fuel for private use.

 

In addition to the above, directors/employees are sometimes provided with private health insurance.  The best way of dealing with this is to ensure that the contract is between the employer and the insurance company and therefore the amount is treated as a benefit in kind and reported on a P11D. 

 

However, sometimes the employer will offer to pay the employee’s personal medical insurance directly. In this case the contract for the health insurance will be between the insurance company and the director/employee and the payment is treated very differently to the above.  If the company pays the bill on behalf of the employee the amount is entered onto the P11D for tax purposes but is dealt with through the payroll for National Insurance.  This, as you can imagine, gets very messy.

 

This does not just apply to medical insurance but also any contract in the director/employee’s name that the employer settles on behalf of the director/employee.  Another common one that springs to mind is a mobile phone bill. 

 

The moral of the above is to set up medical insurance/mobile phone contracts between the employer and the supplier directly which simplifies the treatment of dealing with the whole reporting process.

 

The above is just a small part of the P11D system so please get in touch with Torr Waterfield if you require any help. Call Torr Waterfield on 0116 24243400 or email info@torrwaterfield.co.uk.

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