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What is a P11D? Benefits in kind reporting explained for employers
Your employee drives a company car, has private medical cover through work, and received an interest-free loan last year. None of that shows up on their payslip. But HMRC still expects to tax these Benefits in Kind (BIK).
What is a P11D?
The P11D is the annual form employers use to tell HMRC about taxable BIKs and expenses provided to directors and employees that were not processed through payroll. A separate P11D is required for each individual who received benefits during the tax year. The form tells HMRC the cash equivalent value of each benefit so the correct Income Tax can be collected, usually through a tax code adjustment the following year. It does not collect the tax itself. It simply reports what was provided.
If you provide any taxable benefits to anyone on your payroll, filing a P11D is a legal obligation. Missing the deadline or reporting incorrectly can result in penalties and HMRC enquiries.
What counts as a benefit in kind?
A Benefit in Kind (BIK) is any non-cash item or service an employer provides to a director or employee on top of their salary. The list is broader than most employers expect.
Common taxable benefits include:
Company cars and car fuel for private use
Vans used privately
Private medical or dental insurance
Interest-free or low-interest loans above £10,000
Living accommodation provided by the employer
Gym memberships
Non-cash vouchers
Assets made available for private use (such as a laptop used personally)
The key test is whether the benefit has been provided because of the employment relationship. If it has, and it is not specifically exempt, it is likely taxable.
What is exempt from P11D reporting?
Not every benefit triggers a P11D. HMRC provides a number of exemptions where benefits can be provided without any tax or reporting obligation.
Common exemptions include:
Trivial benefits worth £50 or less per instance (subject to conditions; directors of close companies have a £300 annual cap)
Workplace parking
One mobile phone per employee
Employer pension contributions
Childcare vouchers issued before October 2018 (within limits)
Qualifying cycle-to-work scheme bicycles
Meals provided in a staff canteen available to all employees
Eye tests and corrective glasses required for display screen equipment use
If a benefit falls within an exemption, it does not need to appear on a P11D and no tax is due. If you are unsure whether a specific benefit qualifies, checking gov.uk or taking professional advice before filing is the safer approach.
P11D deadlines
For the 2026/27 tax year, the key dates are:
What you need to do | Deadline after the end of the tax year |
Report expenses and benefits (P11D) | 6 July |
Give your employees a copy of the information | 6 July |
Report the total Class 1A NIC you owe (P11D(b)) | 6 July |
Pay Class 1A NIC | 22 July(19 July if paying by cheque) |
Pay tax and Class 1B NIC if you have a PAYE Settlement Agreement (PSA) | 22 October(19 October if paying by cheque) |
Pay PAYE tax or Class 1 NIC if payrolling benefits | Monthly through payroll |
These dates are fixed by statute and do not move. Since 6 April 2023, HMRC no longer accepts paper P11D submissions. All forms must be filed electronically through HMRC's PAYE Online service or compliant payroll software.
*Class 1A National Insurance Contributions (NICs) are employer-only contributions charged on the value of taxable benefits provided to employees. Employees do not pay Class 1A NICs, it is a cost borne entirely by the business.
What is a P11D(b)?
Alongside the P11D, employers are also required to submit a P11D(b): the form that tells HMRC the total Class 1A NICs your business owes on all benefits provided. It is due by the same 6 July deadline.
Note: Zoho Payroll does not currently support P11D(b) filing. This is on our roadmap and will be available soon.
P11D penalties
Late P11D forms: HMRC can apply to the First-tier Tribunal for an initial penalty of up to £300 per form. If the Tribunal approves it, continuing daily penalties of up to £60 per form can follow until the failure is remedied. In practice, HMRC rarely pursues these penalties against employers who are simply late rather than non-compliant.
Late Class 1A NIC payment: Interest accrues from the due date. Further penalties may apply for persistent non-payment.
Inaccurate returns: Penalties under Schedule 24 FA 2007 can apply where errors are due to carelessness or deliberate understatement.
These penalties apply per PAYE scheme, so employers running multiple schemes can be charged separately on each.
How payrolling benefits works now
Rather than reporting benefits on a P11D after the year ends, some employers choose to payroll their benefits. This means the taxable value of each benefit is added to the employee's gross pay each month and taxed through PAYE in real time, rather than being collected later through a tax code adjustment.
Until April 2027, payrolling has been voluntary. Employers who registered with HMRC before the start of the tax year could payroll most benefits. Voluntary registration for 2026/27 closed on 5 April 2026 and no new voluntary registrations are being accepted for 2026/27.
If you are currently payrolling benefits, you do not need to submit individual P11Ds for the benefits that have been payrolled.
Two benefits cannot currently be payrolled and must still go on a P11D: employment-related loans and employer-provided living accommodation.
What is changing from April 2027?
HMRC has confirmed that payrolling benefits in kind will become mandatory from 6 April 2027, replacing the P11D system for most benefits. The rollout will happen in two phases:
Phase 1: from 6 April 2027 Company cars, car fuel, vans, van fuel, and employer-provided medical and dental benefits must be reported through payroll in real time.
Phase 2: from 6 April 2028 Most remaining benefits (gym memberships, non-cash vouchers, mobile phones outside the exemption, and others) move into mandatory payrolling.
What stays outside mandatory payrolling (for now): Employment-related loans and employer-provided living accommodation remain excluded and will continue to be reported on a P11D.
What this means in practice:
From April 2027, P11Ds will no longer be required for most benefits
Employers do not need to register with HMRC in advance for mandatory payrolling (unlike the current voluntary system)
Payroll software must be capable of handling benefits in real time
One thing to watch: Employees currently on P11D reporting may experience a temporary overlap in the first year of mandatory payrolling. Their tax code may still carry an adjustment from the previous year's P11D while the new system is also collecting tax in real time. HMRC is expected to issue guidance on managing this transition.
The way forward
The 2026/27 P11D (due 6 July 2027) is the last full year of traditional P11D reporting for most benefits before mandatory payrolling begins. Now is a good time to get your process in order.
Checklist:
Identify all benefits provided to employees and directors during 2026/27 and confirm which require a P11D
File P11D electronically by 6 July 2026/27
Provide each employee who received benefits with a copy of their P11D by 6 July
Pay Class 1A NICs by 22 July (electronic) or 19 July (cheque)
Check whether your payroll software supports real-time payrolling of benefits ahead of April 2027
Review which benefits fall under Phase 1 (April 2027) and Phase 2 (April 2028) and plan accordingly
Note: Zoho Payroll supports benefits in kind reporting (P11D) and payrolling of benefits in kind.
About Zoho Payroll
Zoho Payroll is part of Zoho's suite of 55+ integrated business applications, trusted by over 150 million users across 150+ countries. As payroll software for employers in the UK, Zoho Payroll handles PAYE calculations, payslip generation, RTI submissions, benefits in kind reporting (P11D), and payrolling of benefits in kind, so your business is ready for today's obligations and the shift to mandatory payrolling from April 2027.
Frequently Asked Questions
What is a P11D form?
A P11D is the annual form UK employers submit to HMRC reporting taxable benefits and expenses provided to directors and employees that were not taxed through payroll. A separate P11D is required for each individual who received benefits during the tax year.
What is the P11D deadline for 2026/27?
The P11D must be filed with HMRC by 6 July of that tax Employees must also receive a copy by this date. Class 1A NICs must be paid by 22 July 2027 if paying electronically, or 19 July 2027 by cheque.
What is the Class 1A NIC rate on benefits in kind?
For 2025/26, Class 1A NICs are charged at 15% on the total cash equivalent value of taxable benefits. This is paid by the employer, not the employee.
Do I need to file a P11D if I payroll my benefits?
If you have registered to payroll benefits, you do not need to file individual P11Ds for the benefits that have been payrolled.
What benefits are exempt from P11D reporting?
Common exemptions include trivial benefits worth £50 or less, one mobile phone per employee, workplace parking, employer pension contributions, and meals in a staff canteen available to all employees. If a benefit falls within a specific HMRC exemption, no P11D is required and no tax is due.
What is changing with P11Ds from April 2027?
From 6 April 2027, payrolling benefits in kind becomes mandatory for most benefits, starting with company cars, car fuel, vans, van fuel, and medical and dental benefits. Most remaining benefits follow in April 2028. Loans and living accommodation remain outside mandatory payrolling for now and will continue to be reported on a P11D.