Posted on 16th July 2019

If you’ve paid any benefits or expenses to your employees, you’ll need to pay Class 1A National Insurance payments for these and the deadline is looming.

At the end of the tax year, employers usually need to send HMRC a P11D form for every employee who has been paid expenses or benefits during that year. You’ll also have to submit a P11D(b) form, which will enable HMRC to work out how much Class 1A National Insurance you need to pay on those amounts.

If you’re paying tax on all an employee’s benefits via your payroll, you won’t need to fill out a P11D form, although you’ll still need to complete a P11D(b) form for National Insurance purposes.

The deadline for submitting P11D forms online to HMRC for the 2018-19 tax year was on 6 July, but all Class 1A National Insurance owed on expenses or benefits must be paid by 22 July. You can be charged penalties if your P11D(b) is late or if you’re late in paying HMRC.

Along with meeting payment deadlines, it’s important to know which expenses and benefits need to be reported and how to do so, which can be achieved through several different methods.

It’s essential to keep detailed records about every expense and benefit you provide. But there are some routine business expenses and benefits that don’t need to be reported to HMRC.

These exemptions include business travel, phone bills, business entertainment expenses, uniform and tools for work. You can qualify for an exemption if you’re either paying back the employee’s actual costs or paying an HMRC-approved flat rate to your employee as part of their earnings.

If this sounds complicated or difficult to understand, don’t worry – help is at hand. Get in touch with JNR Accounting today and we can make sure that your business is always compliant with benefits, expenses and Class 1A National Insurance rules.

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