Need for P11D's

Need for P11D's

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I've recently taken on a limited company client with 2 directors.  Limited company started at the end of 2012.  Now the previous accountant has informed me that he has never completed P11D's for either director.  There are no benefits in kind but obviously as directors they should complete P11D's, although there is no class 1A nic that needs to be paid.  Is it better to inform HMRC and to complete them going forward, or is there a strong risk of penalties and interest if I do this? Or is it better to just continue as is, advice would be appreciated?

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By Kirkers
20th Jun 2014 11:20

I'm confused. If there are no benefits why would they need to complete P11D's?

Being a director doesn't mean they're obligated to complete one just for the sake of it.

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By sanderson
20th Jun 2014 11:27

I was under the impression that technically all directors should complete P11D's, even if they had received no benefits in kind as such.  In this case the only expenses that they take are mileage claims, which are processed at the HMRC approved rates. One of them also takes a salary of £10k per year.

 

 

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Replying to anthonystorey:
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By Kirkers
20th Jun 2014 11:34

Well

sanderson wrote:

I was under the impression that technically all directors should complete P11D's, even if they had received no benefits in kind as such.  In this case the only expenses that they take are mileage claims, which are processed at the HMRC approved rates. One of them also takes a salary of £10k per year.

 

 

I was under the impression (and please, forgive me if I'm incorrect) that if there are no benefits (whether class 1a is due or not) then no P11D is required.

HMRC guidance may ask for one, but that's all it is, guidance.

Lord knows the guidance doesn't always follow the law. Unless someone can point us in the direction of any legislation?

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By ireallyshouldknowthisbut
20th Jun 2014 11:29

.

No tax due, no penalty.

Which is why not all accountants do them when there is no BIK, despite HMRC's guidelines.

 

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By mrme89
20th Jun 2014 11:38

No benefits, no P11D.

 

Being a director doesn't make is compulsory to complete one.

 

You mention mileage - you'd only have to report if the director was paid in excess of the approved rates.

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By Steve Kesby
20th Jun 2014 11:47

Agreed

The point is that a director can never be in excluded employment (earnings less than £8,500), so P11Ds are, therefore, required for all directors and other employees earning more than £8,500, where there are benefits or expenses to report for them.

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Euan's picture
By Euan MacLennan
20th Jun 2014 11:55

Requirement to file P11Ds

An employer is required to file forms P11D for its directors and for its employees earning over £8,500 a year (including benefits), if and only if:

benefits have been provided, orbusiness expenses paid privately by the directors/employees have been reimbursed to them.

and even then, certain expenses, including mileage allowances paid for business use of private cars at no more than the statutory 45p/25p a mile, are excluded from the requirement to report.  Also, you can apply for a dispensation from having to report most expenses.

In the OP's case, as no benefits have been provided and the only expenses were mileage, presumably at not more than the statutory rate, there is nothing to report and hence, no requirement to file a P11D for either director.  Indeed, I am not sure that you can even file a nil P11D online.  There is no automatic requirement to file P11Ds for all directors, just as there is no automatic requirement to file SA tax returns for directors.

The latest Employer Bulletin No.48 reports on page 4 that there is consultation on removing the £8,500 earnings threshold and on removing the requirement to report expenses reimbursed to employees (in the absence of a dispensation) if the employee could claim tax relief on them as an expense of employment.

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