The P11D filing deadline for 2020/21 is 6 July 2021. Usually, this is a routine exercise in most cases. However, due to COVID-19, some additional consideration may be required this time round. HMRC have published guidance regarding certain items that need some thought because of the pandemic.
Any COVID-19 tests provided by the government as part of its national testing scheme, for example for healthcare workers and other frontline staff, are not treated as a benefit in kind.
For other employers, the cost of providing antigen testing kits outside the national testing scheme is not a benefit in kind. There is also no benefit in kind where the employer provides money to an employee in order to obtain a test.
Personal protective equipment (PPE)
Where a risk assessment shows that PPE is required for an employee to carry out their duties (e.g. care workers), an employer is required to provide this to the employees free of charge. This is not a benefit in kind. If the employer is unable to procure the PPE directly, there is an obligation to reimburse the cost of purchasing the PPE to employees who purchase it directly. Again, this is not a benefit in kind.
Unless a specific exemption applies, the cost of providing living accommodation for employees working at a permanent workplace will be a taxable benefit, even if they are working at that permanent workplace because of COVID-19. If the workplace is a temporary workplace the cost of providing the accommodation must still be reported, however the employee may be able to claim relief.
Where an employee is unable to return home due to COVID-19, an employer may agree to pay for lodging expenses, e.g. a hotel room on a temporary basis. These expenses will be taxable but may be covered by a PAYE settlement agreement if this is agreed by 5 July 2021.
Where an employer reimburses 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 9pm
- 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.
An exemption may also apply if an employee is usually party to a car sharing arrangement, and this stops due to COVID-19 and the employer reimburses the cost of transportation. In either case, the exemption can only cover a maximum of 60 journeys in any tax year.
Where an employer provides free or subsidised transport, this is taxable and should be reported through a PAYE settlement agreement.
Where an employee is working 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 car, e.g. the employer retains 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 genuinely not available to the employee for at least 30 consecutive days. It is not enough that the employee is simply instructed not to use the car, 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 car remains at the employee’s premises, as the return of keys will mean the car is unavailable.
Working from home
Separate guidance is available here regarding what expenses incurred relating to employees that are working from home due to COVID-19 are taxable.