As an employee or director, you may receive additional benefits from your employer which are in addition to your salary or wages. For example, these may include health insurance, a company car or an interest-free loan.
These ‘benefits in kind’ will be taxable, so the value of the benefit needs to be reported to HM Revenue and Customs (HMRC) by your employer on form P11D at the end of the tax year or via the payroll.
To avoid receiving a big tax bill, HMRC will normally look to adjust your PAYE tax code so that your tax bill for your benefit is collected during the year from your wages.
Although your benefit has been reported to HMRC and you are likely to have paid some or all the tax due on it, you will still be required to enter the details from your P11D onto your self-assessment tax return. A tax return should give a complete picture of your tax affairs, and therefore include all your taxable income, allowances, deductions and reliefs. Any tax you have paid at source (such as the PAYE on your wages) is deducted from your eventual bill; meaning you don’t get taxed twice on your wages and benefits in kind.
If you don’t include the figures from your P11D, it will appear as though you have overpaid tax because your PAYE will be higher than expected and HMRC may incorrectly refund the tax on your benefit in kind.
Date published 7 Jan 2020 | Last updated 7 Jun 2022This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.