Expenses and Benefits from Employment
This guidance sets out HMRC's approach to applying legislation on expenses payments and benefits received by directors and employees.
The benefits code applies to directors and employees.
Depending on the specific expenses paid or benefits provided to directors and employees, one of the following five requirements will normally apply:
- report the expense or benefit on form P11D and, where a P11D or P11D(b) is completed, pay Class 1A National Insurance contributions (NICs)
- treat the expense or benefit as if it is a payment, adding the value to the employee's earnings and calculating PAYE tax. See Paying your employees' expenses and benefits through your payroll
- add the item's value to the employee's earnings for Class 1 NICs purposes (where the item attracts a Class 1 NICs charge) through the payroll
- there is no tax or NICs to pay, but at the end of the tax year, the expense or benefit is reported on form P11D
- there are no reporting requirements and no tax or NICs to pay.
By 6 July following the end of the tax year particulars of any expenses, payments, benefits and facilities provided to directors and employees must be submitted to HMRC on form P11D.
For more detail on this subject download the toolkit to the right hand side.
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