Preparing for Your Annual Accounts

8. Employees

Payroll and expenses claims are of particular interest to HM Revenue & Customs (HMRC).

8.1 Your accountant should check that you (or the payroll bureau staff) are doing calculations correctly.

The business is liable for incorrectly deducted tax and National Insurance, not the employee. (See Payroll.)

8.2 Keep records for all expense claims.

• Expenses claim forms make it easy to keep track of expenses. Employees attach the relevant receipts to the completed form, in order to receive reimbursement.

8.3 Completing P11D tax forms relating to benefits in kind can be very time consuming. Ask your accountant about getting a dispensation (P11D).

• This is a formal statement by HMRC, allowing your business to not record expense payments on the forms. HMRC must be satisfied that you reimburse nothing more than the legitimate costs incurred by your staff.But you will still need to keep records of any payments made.