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How to Pay NI due on P11D benefits?

Hi Guys,

I have completed a P11D for a client and there is some NI due. However I cannot find clear instructions of how this payment can be made apart from it has to be done before 22nd July.

Clearly the employee will pay this NI but i need to be able to advise him of how to do so.

Thanks guys. :)

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Not sure if it makes a difference but the client is registered for self asessment and this will be filed soon. I will include these amounts then so will this liability not be added to the final tax owed? There is some rental income and dividend to declare too so a liability is definately owed.

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What NIC?

I might be missing something but if the P11D's correctly completed, there should only be Class 1A NICs due (if NIC is due at all) - and these are paid by the employer.

I don't think that even if there are Class 1 NICs due from the employer that you can pay that with self assessment tax (either IT or CT) - it'll just confuse things and you'll spend ages sorting it out.

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Try this link Paying Class 1A NIC

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OK, maybe I am confused. I was always under the impression that if an employee gets any taxable benefits such as company car, health care, then these get declared on a P11D and the employee has to pay the NI on this. Why would the employer pay the NI if the employee has had the benefit and the employer has already paid for the benefit? My understanding was also that the NI owed can either get paid in one go or the employee can have their tax code adjusted for the following year to take into account this amount owed.

Please advise where I have gone wrong! And apologise if I am making reference to NI when it is actually called something else!

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Taxable benefits are seen as another form of remuneration so the employer is seen to be "paying" the employee except instead of cash they employee receives a car, health care etc.

The employer must therefore pay employers NI on these benefits as they would if they were simply giving the employee the cash.

These amounts go on the P11D and the employer pays Class 1A NIC in one go.

The amounts used on the P11D go on the employeee's self assessment tax return in this case and the employee will have to pay tax on them. No national insurance is paid by the employee on these benefits.

If the employee was not taxed under self-assessment but simply had employment income and the benefits, their tax code would be adjusted so that the tax would be recovered through the tax deducted in their employment.

Hope that helps.

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Did you file form P11d (b)?

You said that you have completed a form P11d but have made no reference to the Employer Declaration form P11d(b) which should have been filed with HMRC by 6th July 2012 - but you can file by 19th July 2012 to avoid penalties.

The form P11d(b) provides HMRC with the calculation of Employer only Class 1A National Insurance due on the benefits provided.

In order to avoid the Class 1A payment being mixed up with the standard monthly PAYE & NI payments make sure the client uses their PAYE accounts office reference as the payment reference with the additional digits 1213 (ie. tax year 2012 payment no. 13 relating to Class 1A).

You can file the form P11d(b) online under the HMRC PAYE service - filing only section.

Hope this helps!

I suggest that if you are going to complete forms P11d every year that you go on a course to understand what you are doing. If you get them wrong the penalties can be very high!

 

 

 

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Hi Guys,

Many thanks, it is now alot clear. Yes, before the 5th July deadline I filed a P11d using Moneysoft which also filed the P11d(b). The NI amount calculated on that for some strange reason I thought was to be paid by the employee! Yes, i will defo go on a course but thanks for clarifying everything.

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Course?

I don't think you need to go on a course, you just need to read HMRCs website about the subject and read the forms they send to you.

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Hello o ?

Where are all the qualified people who usually jump up and down about unqualified people acting?  At first I thought this was just someone trying to help out a friend, but when you read it the word "client" is used. Roll on the day when HMRC or Trading Standards or someone says you have to take an exam or exams if you are not fully qualified and only act as agent in areas in which you have demonstrated a minimum standard of competence.  It is not easy for a mature practising accountant to get qualified because he can't practise whilst registered as a student.  So we need some other route that proves competence, for the poor old clients' sakes.  OK we all need to use consultants and look things up and ask advice on Accounting Web, but we should have a basic framework of knowledge so that we at least know what we don't know.

This reminds me of a man who once told me he was an upholsterer.  Where did you train? I said.  Oh, I just put an ad in the paper and got a commission.  When I had finished the customer screamed and yelled and made me do it again - and again - and again.  I learnt a lot from that he said, laughing.

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Class 1A

 

NB The advice to add 1213 to the accounts office reference is correct but  iif if the employer pays the Class 1A by Billpay this is not possible; the period selected should be Year: 2012 Month: 12. 

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get an expert

khalm0

if you don't know how to do such a simple exercise, i really think you should get the required help or tell your client to find someone else to do P11D's.

I think you have the answers above so will not add further.

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