HMRC form P11D
As an employer, you’ll need to complete a P11D form for each employee you’ve provided benefits to during the tax year, and a P11D(b) form which shows how much Employer National Insurance (NI) you’ll have to pay on the benefits you've provided to each employee. National Insurance that's payable on benefits is called 'Class 1A’ NI.
Since April 2016, employers are no longer required to report most reimbursed business expenses on a P11D form. Therefore, as an employer, you would only need to include information on the value of benefits provided to each employee, or you may not need to prepare P11D forms at all. For more information, please see the following HMRC guidance.
If you’re unsure whether you need to complete a P11D form or what information you need to include, please speak to your accountant or HMRC.
The P11D and P11D(b) forms must be filed every year with HMRC by 6th July following the end of the tax year. Please note that it’s not possible to prepare forms P11D or P11D(b) in FreeAgent and these forms would need to be filed externally. However, if you do file P11D forms, you will need to record the liability and explain the NI payment in your FreeAgent account.
For more information on how to complete P11D forms, please see the following HMRC guidance.
Recording the liability in FreeAgent
To show that a payment of Class 1A NICs is due to HMRC, you will need to create journal entries. Please note that you’ll need full (level 8) access to your FreeAgent account to create journal entries.
Navigate to the ‘Accounting’ tab at top of the screen and select ‘Journal Entries’ from the drop-down menu.
Select ‘Add New Journal Entries’ in the top-right.
Next, create the following journal entries for the amount due to HMRC:
- Debit code ‘402 - Employer NICs’ or ‘408 - Directors’ Employer NICs’ if the adjustment is for a director
- Credit code ‘814 - PAYE / NI’
A record of journal entries being created will appear in your Audit Trail report.
Explaining the payment of Class 1A NI to HMRC
Once the relevant bank transaction has been imported into your FreeAgent account via a bank feed or uploaded from a bank statement, you will need to explain it using the appropriate ‘Type’ and ‘Category’.
Navigate to the 'Banking' tab at the top of the screen and select 'Bank Accounts' from the drop-down menu.
Choose the relevant bank account from the list.
Select the transaction that relates to the NI payment.
Select ‘Payment’ from the ‘Type’ drop-down menu.
Select ‘PAYE/NI’ from the bottom of the ‘Category’ drop-down menu.
Select ‘Explain Transaction’ to complete the process.
A record of the bank transaction being explained will appear in your Audit Trail report.