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.
If you don’t feel confident in completing your own self-assessment tax return, feel free to contact us and we would be happy to complete this on your behalf. Call 0151 515 3636 or enquire online here.
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.
Sign up for our newsletter
Receive important tax news suitable for business owners and self-employed professionals.
Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
We specialise in supporting independent businesses and work with over 78,217 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 406 locations, meet with us online through video call software, or talk to us by telephone.
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.