What is P11D?

The P11D is the form employers use to report Benefits in Kind (BIK) and reimbursed expenses to HMRC for each employee and director who received them during the tax year. It covers non-cash perks that are not processed through payroll, such as company cars, private medical insurance, interest-free loans, and living accommodation. If you run a small limited company and provide yourself with any benefits, you must file a P11D.

Common items reported on the P11D include: company cars and fuel, private medical or dental insurance, interest-free or low-interest loans above £10,000, gym memberships, non-business travel expenses, accommodation, and childcare above the exempt amount. Each benefit has its own calculation rules. For example, company car BIK depends on the car's list price and CO2 emissions, while loan benefits are calculated using HMRC's official interest rate (currently 2.25%).

Alongside the P11D, employers must also submit a P11D(b) form. This is the summary form declaring the total Class 1A National Insurance due on all the benefits reported across all P11Ds. Class 1A NI is charged at 15% (2025/26) on the total cash equivalent value of all benefits and is paid entirely by the employer -- the employee does not pay Class 1A NI.

Many employers now use 'payrolling of benefits' as an alternative to the P11D. This means the benefit values are included in the employee's pay each month, and tax is deducted through PAYE in real time. If an employer payrolls all benefits, they do not need to file P11Ds for those benefits. However, they must still file a P11D(b) and pay Class 1A NI. Payrolling must be registered with HMRC before the start of the tax year.

At the end of each tax year, you review all benefits and expenses provided to each employee and director. For each reportable benefit, you calculate the 'cash equivalent' value using HMRC's rules. For example, a company car's cash equivalent is based on: (list price of the car including accessories) multiplied by the appropriate percentage (based on CO2 emissions). Private medical insurance is valued at the cost to the employer.

You then complete a P11D for each relevant employee, listing all their benefits and their values. The P11D is submitted to HMRC by 6 July following the tax year end. A copy must be given to each employee by the same date so they know what has been reported and can check their tax code reflects the correct amounts. The P11D(b) and Class 1A NI payment are due by 22 July (19 July if paying by cheque).

Once HMRC receives the P11D, they adjust the employee's tax code for the following year to collect the tax due on the benefits. Alternatively, if you file a Self Assessment return, the benefits are declared there.