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Taxshield Support July 11, 2012 P11D / P11D FAQ's

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Many expenses and benefits must be reported to HMRC on forms P11D and P9D at the end of the tax year (for details of the reporting requirements for specific expenses and benefits, follow the A to Z link at the end of this section).

It's important to choose correctly between forms P11D and P9D for each employee. The form to use depends on the employee's earnings and on whether they're a director of your company, as explained below.

Employees earning £8,500 or more a year - form P11D

Use form P11D to report expenses and benefits provided to an employee earning at a rate of £8,500 or more per year. See below for what to include within the £8,500 threshold.

Employees earning less than £8,500 - form P9D

Use form P9D to report expenses and benefits provided to employees earning at a rate of less than £8,500 per year. See below for what to include within the £8,500 threshold.

What the £8,500 threshold includes

The £8,500 threshold doesn't only include wages or salary that you pay the employee. You must also include the value of the expenses and benefits they receive from you.

The £8,500 operates on a pro rata basis if the employee only works for part of the year. For example, if an employee only works for six months of the year then you'll need to use a form P11D if their earnings in that period are £4,250 or more.

Company directors - usually form P11D

Use form P11D for almost all company directors. Only use form P9D if all of the following apply:

  • they earn at a rate of less than £8,500 per year
  • they have no material interest in the company - see below for explanation
  • they are either a full-time working director or a director of a charity or non-profit organisation

In broad terms, a director has a material interest in a company if (alone or together with associates) they own or can control more than 5 per cent of its ordinary share capital.

 

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