Report expenses and benefits (P11D)

What employers must report

If you provide expenses or benefits to employees beyond their salary, you may need to report them to HMRC and pay Class 1A National Insurance. This applies to benefits such as company cars, private medical insurance, interest-free loans, and assets given or loaned to employees.

You report these benefits either through:

• P11D forms - submitted annually by 6 July
• Payrolling - adding the benefit value to taxable pay through PAYE (optional now, mandatory from April 2027)

Class 1A National Insurance on benefits

As an employer, you must pay Class 1A NICs on most taxable benefits. This is in addition to any income tax the employee pays on the benefit through their tax code.

Company cars and fuel

Company cars are one of the most common reported benefits. The taxable value depends on the car's list price and its CO2 emissions. Electric vehicles have significantly lower BIK rates than petrol or diesel cars.

Company vans

If you provide a company van for private use, a flat-rate benefit charge applies. Zero-emission electric vans are exempt.

Private medical insurance

If you pay for private medical insurance for employees, the full premium cost is a taxable benefit. The employee pays income tax on the value, and you pay Class 1A NICs.

Loans to employees

Interest-free or low-interest loans to employees may create a taxable benefit if the loan exceeds a threshold.

Living accommodation

If you provide housing for an employee, the accommodation value is a taxable benefit unless it qualifies for an exemption (such as job-related accommodation).

Benefits that are exempt

Some benefits do not need to be reported and are free from tax and NICs.

Mileage allowances

If employees use their own vehicle for business travel, you can reimburse them tax-free up to approved rates. Amounts above these rates must be reported on P11D.

How to report: P11D submission process

Follow these steps to complete your annual P11D and P11D(b) submissions.

Penalties for late or incorrect reporting

HMRC imposes penalties for late submission, late payment, or inaccurate returns.

Payrolling benefits

Instead of reporting benefits on P11D, you can choose to 'payroll' them - adding the cash equivalent to the employee's taxable pay each month. This means the tax is collected through PAYE in real time.

Share schemes: Employment Related Securities

If you operate any share scheme or award shares to employees, you must file an annual Employment Related Securities (ERS) return by 6 July. This applies to both tax-advantaged schemes and non-tax-advantaged arrangements.