Benefits In Kind - what's the implication?

3 weeks, 4 days ago by Oliver Atkinson

If you are a company director or an employee receiving benefits from your company, the likelihood is that each tax year you have to fill out form P11D and get it filed by the 6th of July.

You could be receiving anything, from medical insurance to a loan or gym membership through your employment. Whatever benefit you might have, HMRC want to know how much it’s worth so you can pay the excess tax and Class 1 National Insurance Contributions due on its value.

For any expenses and taxable benefits received, excluding car or van benefits, you can get around the excess tax charge by repaying the value of the benefit to your employer or company. This is usually done by simply sending the money to them, though you should consult with your employer before doing this. Whilst making good will negate the advantage of having received a benefit through the company, it does mean that the annual tax charge will no longer be applied and you won’t be required to make a payment to HMRC.

Of course this won’t work for everybody, as the value of the benefit is usually considerably more than the tax and NIC levied on it’s use, however if you do choose to make good on your company benefits, then the window for doing so is between the end of the tax year on the 5th of April, and the 6th of July - so for the current 2022/23 tax year the final date to make good will be 6th of July 2023.

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