P11d Section B Payments Made on Behalf of the Employee. This section relates to any amounts that should have been paid by an employee but were paid by the business.
What to Include Section B Payments Made on Behalf of the Employee
This section covers bills that were paid for an employee by the employer like an internet connection.
Any such bills should be made out to the name and address of the business. Where this is not possible and an employee is reimbursed then such bills should be included within this section.
It is in the best interest of a business to make sure bills are made out to their Business to avoid paying Class 1A National Insurance on these types of payments (although they may need to be included within section K or section N).
How to Calculate the Value Payments Made on Behalf of the Employee
The value of any payments made on behalf of an employee to be recorded on the P11d form will be the actual costs paid.
Any documentation supporting the value of any payments being recorded should be kept and stored to produced in the event that HMRC ask.
Tax on Notional Payments
Taxable benefits can arise on ‘readily convertible assets’ that’s something like a cash voucher or a voucher that can be easily converted to cash.
If such vouchers or convertible assets have been provided to employees or Directors, but not been repaid within 90 days of the tax year reporting on, then this value must be included within this section.
Who Pays Tax on Section B Payments Made on Behalf of the Employee
Tax on payments made on behalf of employees included in Section B is paid by just the employee – there is no Class 1a National Insurance payable by the employer.