Everything you need to know about P11Ds
We are often asked about the P11D. What is it? When do we need it? How do we manage it? So we’ve put together a simple guide that answers the most common questions – if you can’t find the answer to your question here, or you need further professional support, just give us a call.
If you are an employer and you provide any non-cash work-related benefits or expenses to your employees, you’ll need to complete a P11D annually.
All cash benefits will have already been included in the payroll.
What is a P11D?
A P11D form is used to report any non-cash benefits and expense payments that employers make to employees. It covers payments of this type that have not already been accounted for through the payroll during the year.
The forms are submitted annually to HMRC and cover the period of either April 6-April 5.
These expenses are often called ‘benefits in kind’ and HMRC considers it unfair that you receive benefits of your employment without paying tax on them. So they ask employers to complete the forms to capture these benefits and services.
The form lists the expenses, and the value of the benefit is assigned to each employee. Note that the benefit isn’t always the amount the employer pays for something, and this can be a very complicated area, so you might choose to get some advice from your accountant.
You can choose to include some benefits on the monthly payroll. This means the employees are taxed on the benefits during the year and can avoid the need for a tax return. But you should be aware that not all benefits can be payrolled, and you need to consider the cost of running a complex payroll. In addition, if you want to include some benefits on your payroll, you must apply to do so before the start of the tax year.
The P11D form
The form is made up of two parts:
- P11D (b) – this is the summary document that tells the employer the total benefits and the amount of Tax owed,
- P11D is the form you give to your employee and it details their individual benefits for the period.
What tax has to be paid on P11D benefits?
The benefit in kind is considered additional income to your employees and needs to be included on their tax return relating to that period, and therefore extra income tax will be paid at the prevailing rate income tax rate. The employee pays no national insurance on the benefits received.
The employer has to pay 13.8% (15% 2025/2026) on the total benefits for all employees. This tax is called National Insurance Class 1A.
What gets included on a P11D form?
Non-cash benefits that are typically found on a P11D form include:
- Private use of company cars and vans
- Private fuel payments
- Interest-free loans to pay for season tickets
- interest-free overdrawn director’s loan accounts
- Private healthcare
- Assets given to employees below market value
- Assets of the company where there is an element of personal use
- Mileage that is paid above the statutory amount – more than 45p per mile
- Payment of personal expenses
Benefits are often related to the private use of business assets as opposed to the business use of the assets. Using your company car for business is fine, for example, but personal use is a benefit in kind and will be taxable.
One area you should be careful of is around the provision of goods and services to the family and household of directors.
What doesn’t get included on a P11D?
There are a number of things that you often don’t need to record on P11D:
- Business travel
- Entertainment expenses for business purposes
- Credit cards used for business purposes
- Fees and subscriptions for professional bodies
- Trivial payments
- Christmas parties at under £150 per head
- Training
- Tools for work
- Provision of one mobile phone per employee
- Provision of IT equipment used in the business
- Provision of financial advice up to £500
These expenses must have been paid by the company rather than being reimbursed.
Who completes the P11D?
The employer completes the form after the end of the period, and it is submitted either in paper form or electronically.
The form is made up of 14 sections:
- Assets transferred
- Payments made on behalf of the employee
- Credit cards and vouchers
- Living accommodation
- Mileage allowances
- Cars and car fuel
- Company vans
- Beneficial loans
- Medical health
- Qualifying relocation expenses payments and benefits
- Services supplied
- ·Assets placed at the employee’s disposal
- Other items, including subscriptions and professional fees
- Expenses payments made to, or on behalf of, the employee
How to complete your P11D
You essentially slot in the calculated benefits into the 14 sections/boxes. Links at the end of this article will take you to further government guidance. There are also a number of worksheets on the HMRC website to help you calculate the benefit in kind of common items.
As a director of the company, you can complete the P11D form by downloading the PDF from the government website, or you can submit it through your payroll software. If you outsource your payroll, then that’s something your payroll provider could probably help with, or your accountant could obviously draft the P11D on your behalf.
The Class 1A Tax owed
Benefits in kind are calculated for each employee, and then these are summarised on an overall company form which will total up the total benefits in kind given to all employees.
The employer will pay 13.8% (15% 2025/2026) off that benefit total in National Insurance Class 1A contributions. This payment needs to be made by Jul 19 2025 – if the payment is late, you will be subject to interest charges and penalties.
Filing requirements
Employers’ obligations are to calculate these cash equivalents and report these details to employees by June 1 and HMRC by July 6 following the end of a tax year ending April 5. You should send both the P11Ds and the P11D (b) to HMRC. Tax due to HMRC should be paid by July 16 of the relevant year and is paid direct to HMRC.
If you have payrolled all of the benefits in kind, then you still need to complete the P11D(b) and submit it by the deadline. There is a financial penalty if you’re late filing your P11Ds. This starts at a flat £300, then an additional daily £60 fine until HMRC gets your P11D forms.
If you are ever in any doubt about what has or has not gone through the payroll, or whether something is a payroll able item, you should discuss this with your accountant or your payroll providers as this can be an incredibly complicated and complex area and it is quite easy to get it wrong.
We are always happy to explain P11Ds and to help you work out how best to manage the non-cash payments and benefits you give to your employees – just contact us today to find out how we can help.
Useful links
https://www.gov.uk/guidance/how-to-complete-forms-p11d-and-p11db
https://www.gov.uk/employer-reporting-expenses-benefits/reporting-and-paying
Please note: This is not meant to constitute professional advice. It is generic guidance only and things may have changed since it was written –please always seek specific & tailored advice for your circumstances.