If your business gives directors or employees anything beyond salary, a company car, private medical insurance, a low-interest loan, you probably need to report it to HMRC on a P11D. Miss the deadline and the penalties add up fast. This guide covers what a P11D is, the current deadlines, and the major change coming that will end the traditional P11D for most employers.
Quick Answer
A P11D reports taxable benefits in kind given to a director or employee that were not put through payroll, such as a company car, private medical insurance, or an interest-free loan. For the 2025/26 tax year, P11D and P11D(b) forms are due by 6 July 2026, with any Class 1A National Insurance owed due by 22 July 2026 if paying electronically. From 6 April 2027, most benefits move to mandatory real-time payrolling, ending the annual P11D for most employers.
What Is a P11D?
A P11D is the form an employer uses to tell HMRC about taxable benefits and expenses given to a director or employee that were not already taxed through payroll. There is one P11D per person who received a reportable benefit. A P11D(b) is the companion form, declaring the total Class 1A National Insurance the employer owes on all the benefits reported that year. In short, the P11D tells HMRC what the employee received, and the P11D(b) tells HMRC what the employer owes.
What Counts as a Benefit in Kind?
Common taxable benefits that usually need reporting include:
- Company cars and car or van fuel
- Private medical or dental insurance
- Interest-free or low-interest loans above the exempt threshold
- Living accommodation provided by the employer
- Non-business travel and entertainment expenses
What Is Exempt from P11D Reporting?
Some benefits are covered by a specific exemption and do not need to appear on a P11D, including:
- Trivial benefits, up to £50 per gift, capped at £300 a year for directors of close companies
- Mobile phones, limited to one per employee
- Staff parties within the £150 per head annual exemption, covered in our guide to allowable business expenses
- Business expenses reimbursed under HMRC’s benchmark scale rates or a dispensation agreed with HMRC
Key P11D Deadlines for 2025/26
| Deadline | Date |
|---|---|
| File P11D and P11D(b) with HMRC | 6 July 2026 |
| Give each employee a copy of their P11D information | 6 July 2026 |
| Pay Class 1A National Insurance, electronic | 22 July 2026 |
| Pay Class 1A National Insurance, cheque | 19 July 2026 |
Paper P11D forms are no longer accepted. Returns must be filed online using PAYE Online for employers or approved commercial payroll software.
Class 1A National Insurance on Benefits
Employers pay Class 1A National Insurance on the total taxable value of benefits reported. For 2025/26 and 2026/27, the Class 1A rate is 15%, in line with the standard employer National Insurance rate. The calculation is straightforward: add up the cash equivalent value of every benefit reported across all your P11D forms for the year, then multiply by 15%. This figure is declared on the P11D(b) and paid separately from PAYE.
Penalties for Late or Missing P11D Forms
Penalties for a late P11D(b) are automatic, set at £100 for every 50 employees per month, or part month, that the return is late. For a business with 10 employees, a three-month delay costs £300 in penalties before any interest is added. Late payment of Class 1A National Insurance attracts interest plus escalating percentage penalties, starting at 5% after 30 days and rising further at 6 and 12 months.
The Big Change: Mandatory Payrolling from April 2027
HMRC is winding down the traditional P11D system. From 6 April 2027, payrolling of most benefits in kind becomes mandatory. Rather than reporting benefits once a year on a P11D, employers will need to include the taxable value of benefits in payroll each pay period, taxing them in real time through PAYE alongside Class 1A National Insurance.
The rollout is phased. Company cars, car and van fuel, vans, and employer-provided medical and dental benefits move to mandatory real-time payrolling from 6 April 2027. Most remaining benefits, such as gym memberships and non-cash vouchers, follow in a second phase from 6 April 2028. Employer-provided loans and living accommodation stay outside mandatory payrolling for now, available only through voluntary registration.
In practice, this means the P11D filed for the 2026/27 tax year, due 6 July 2027, will be the last full P11D year for most company cars and medical benefits at many employers.
Can You Payroll Benefits Voluntarily Now?
Yes. Employers have been able to payroll most benefits in kind voluntarily since 2016, meaning the tax is calculated and deducted through payroll each pay period rather than reported after the year ends. If you register to payroll benefits, you still need to file a P11D(b) and pay Class 1A National Insurance, so voluntary payrolling does not remove all year-end admin, but it does remove the need for individual P11D forms for each employee.
The registration window for the 2027/28 mandatory regime is expected to open in November 2026. Registering ahead of the mandatory deadline gives you more time to test the transition before it becomes compulsory.
What Employers Should Do Now
- Keep a clean, complete record of every benefit provided, its value, and which employees received it throughout the year, rather than reconstructing this at deadline time
- Brief employees that payrolled benefits will show up as tax in their monthly pay rather than a tax code adjustment, and that some may temporarily see both in a transition year
- Diary the 6 July filing deadline and the 22 July Class 1A payment deadline every year until payrolling becomes mandatory
- Consider registering for voluntary payrolling ahead of the 2027 mandatory deadline to get used to the new process early
Frequently Asked Questions
What is a P11D used for?
A P11D reports taxable benefits in kind, such as a company car or private medical insurance, given to a director or employee that were not taxed through payroll during the year.
When is the P11D deadline?
P11D and P11D(b) forms for the 2025/26 tax year are due by 6 July 2026. Class 1A National Insurance is due by 22 July 2026 if paying electronically, or 19 July 2026 by cheque.
What is the Class 1A National Insurance rate?
15% for 2025/26 and 2026/27, applied to the total taxable value of benefits reported on the P11D(b).
Is the P11D being scrapped?
Not immediately, but it is being phased out. From 6 April 2027, most benefits move to mandatory real-time payrolling, and the traditional annual P11D will only remain for a small number of benefits, such as employer-provided loans and living accommodation.
What happens if I file my P11D late?
HMRC charges an automatic penalty of £100 for every 50 employees per month, or part month, the P11D(b) is late, in addition to interest and penalties on any late Class 1A National Insurance payment.
Key Takeaways
- File P11D and P11D(b) forms by 6 July, and pay Class 1A National Insurance by 22 July if paying electronically
- Class 1A National Insurance is charged at 15% on the total value of reported benefits
- Trivial benefits, one mobile phone per employee, and staff parties within £150 a head are exempt from reporting
- Mandatory real-time payrolling of most benefits begins 6 April 2027, phased through to 2028
- Voluntary payrolling is available now and can ease the transition to the mandatory regime
About the Author
This guide was prepared by the Business Mine editorial team, who research and write practical UK business, tax and finance guides. Information is checked against current HMRC guidance at the time of publication. This article is provided for general information only and does not constitute tax advice; for advice specific to your circumstances, consult a qualified accountant.
