Preparing P11Ds for the 2020/2021 tax year may be a bit different given most of us have worked remotely over the past year.
It is that time of year when we need to prepare P11D forms for the 2020/2021 tax year. Our Tax Director, Glynn Halls, explains that as well as all of the usual suspects to consider like company cars, private medical insurance, etc., there are some additional things that you need to bear in mind:
Phone/broadband or mobile phone use
It is important to note you can only be reimbursed for the business use of your home phone/broadband or mobile phone, where there has been an additional cost incurred. So, if your business use all falls within your existing free minutes and data allowances then there are no additional costs incurred and therefore, you cannot claim any business expense.
However, you can claim where additional costs are incurred, in this case, you will need to record in detail the costs of the calls or data used to support your expenses claim.
Business mobile phones
If you have given your employees a business mobile phone, this is not considered to be a benefit in kind, even where there is personal use. You will also need to bear in mind that there are rules about the number of phones that a company can provide. These mobile phones cannot be for the use of family members unless of course, they are also a director or employee of the business.
Preparing P11Ds after working from home
You may not be aware that an employer can pay a tax-free amount of £6 per week (or £26 per month) to an employee in respect of the additional costs incurred by working from home (known as ‘a use of home’ allowance). This is designed to cover the additional costs that an employee may incur whilst working from home in relation to heat, light, and water, etc.
If an employer does not pay a ‘use of home allowance’ to their employees, the individual who has worked from home can make their own claim for tax relief directly from HMRC.
How can we help you?
All of the above are some of the things to consider in relation to what needs to be reported on/when preparing P11D forms. This can all seem very complicated and confusing, so if you feel you would like further background or details of the filing and payment deadlines, please do contact us to find out how we can help you.
Do get in touch on 01444 716 946.