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Year-End Calculations And Return Of BiKs For 2021-22

Filling in your P11D and calculating NICs ...

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Posted by Roger Eddowes on 06/06/2022 @ 8:00AM

Employers who provide Benefit in Kind (BiK) to employees and directors must fill in the relevant forms by the fast-approaching year-end deadline. This blog post talks about what needs to be done and by when ...

Year-end P11D and BiKs calculations must be reported soon!

Year-end P11D and BiKs calculations must be reported soon!

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The P11D must include items such as any payments made and use of company assets by employees and directors that are not taxed as part of normal weekly or monthly remuneration, including:

  • The use of a company car

  • Private fuel provided by the employer

  • Private medical or life insurance premiums

All employees must get a copy of their P11D form.

So, how do these benefits affect an employee's tax? The taxable benefits are added to the employee's earnings and taxed at the appropriate income tax rates. HMRC usually estimates BiKs based on the previous year's return and reduces the employee's tax code for the year accordingly. The balance of tax due is collected in future tax years via PAYE or individual tax returns.

The taxable value of Benefit in Kind can be reduced if the employees or directors reimburse the company to reduce or fully repay the cost of the benefit provided.

For example, by paying back the cost of any private fuel provided in a tax year the Car Fuel Benefit Charge can be avoided.

For 2021-22, these repayments by employers need to be made before the 6th of July 2022!

When it comes to Employers Class 1A National Insurance obligations, as well as creating an income tax liability for relevant employees, the sum of the taxable benefits for all employees is used to calculate a Class 1A NIC liability for employers.

These calculations must be reported to HMRC by filing form P11D(b) on or before the 6th of July 2022. Payment of any Class 1A NIC due needs to be made to HMRC by the 22nd of July 2022 (or by the 19th of July 2022 if sending a cheque by post).

Until next time ...

ROGER EDDOWES
Business Godparent

 
 



Would you like to know more?

If anything I've written in this blog post resonates with you and you'd like to discover more about these year-end deadlines, it may be a great idea to give me a call on 01908 774320 and let's see how I can help.

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About Roger Eddowes ...

 

Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.