The deadline for the P11D forms is 6 July 2021. In most cases, this is a routine exercise. Due to COVID19, some additional consideration may be required. HMRC have published guidance about specific items that need some thought because of the pandemic.
COVID19 tests that the government provides as part of the national testing scheme, for example, for healthcare workers and other frontline staff, are not treated as a benefit in kind.
For other organisations, the cost of providing antigen testing kits outside the national testing scheme is not a benefit in kind. There is no benefit where the employer offers money to an employee in order to get a test.
Personal protective equipment (PPE)
An employer must provide PPE free of charge for their staff when a risk assessment shows PPE is needed to carry out their duties. This is not a benefit in kind. If the employer is unable to get the PPE, there is an obligation to refund the cost of purchasing the PPE to employees who purchase it directly.
The cost of providing living accommodation for employees working in a permanent workplace will be a taxable benefit unless a specific exemption applies even if they are working at that permanent workplace because of COVID19. If the workplace is temporary, the cost of providing the accommodation must still be reported, yet the employee may be able to claim relief.
If an employee is unable to return home due to COVID19, an employer may agree to pay for lodging expenses, e.g. hotel room, temporarily. These expenses will be taxable but may be covered by a PAYE settlement agreement if this is agreed by 5 July 2021.
An employer can reimburse the cost of transport between the workplace and the employee’s home. It is treated as earnings and should be taxed via payroll. There are some circumstances where an exemption applies. For this to be the case, all four of the following conditions must be met:
- The employee has to work later than usual and until at least 9 pm.
- This happens irregularly
- By the time the employee finishes work, either:
- Public transport has stopped.
- It would not be reasonable to expect them to use public transport.
- The transport is by taxi or similar road transport.
The employer can reimburse the employee if they have a car-sharing arrangement and stops due to COVID19. In either case, the exemption can only cover a maximum of 60 journeys in any tax year.
If an employer provides free or subsidised transport, this is taxable and should be reported through a PAYE settlement agreement.
When an employee works from home or has been furloughed, it may be the case that the employer has retained any company car. If this has been done in a way that the employee is physically prevented from using the vehicle, e.g. the employer maintains the keys or the contract has been terminated, the benefit in kind calculated for P11D purposes may need to be adjusted for the unavailable period.
This only applies if the car is not available to the employee for at least 30 consecutive days. It is not enough that the employee is instructed not to use the vehicle, even if they can prove that they do not use it. The car must be physically unavailable for them to use. This can be the case even if the vehicle remains at the employee’s premises, as the return of keys will mean the car is unavailable.