Did you know that benefits in kind along with certain taxable expenses provided by a business to its employees need to be declared to HMRC each year? The deadline of the 6th July is fast approaching, take a look at our quick guide below to understand more about P11Ds.

A P11D form needs completing per employee to report any benefits and expenses provided. HMRC then use this to change the employees PAYE code, which the employee will need to complete their tax return if applicable.

P11D(b) is to be completed by the employer to declare to HMRC that all P11Ds are correct. This also confirms the total Class 1A NICs due.

So, what falls under the scope of a P11D?
  • Company cars including fuel
  • Interest-free (or low interest) employee loans
  • Living accommodation
  • Home broadband
  • Private medical insurance
  • Phone costs
  • Assets used by or transferred to employees
  • Non-business expenses like gym membership, personal expenses etc.
Deadline & Penalties
  • Forms must be filled by the 6th July 2023 following the end of the tax year
  • Late forms result in a penalty of £100 for every 50 employees per month
  • The resulting Class 1A NIC must be paid by the 18th July – with interest charged on any late payment
Payrolling Benefits

Businesses have the option to payroll their benefits in kind (BIK) as an alternative to submitting P11D forms. This still ensures that the correct amount of tax is deducted but in real time through payroll. There are huge benefits to payrolling BIK – it reduces reporting requirements and admin time.

Most benefits can be payrolled with the exception of beneficial loans and accommodation. It is important to note that employers must register to payroll their benefits before the start of the tax year via the HMRC portal, selecting which benefits they will include. If this is not done in time, the employee P11D forms will be required.

If you wish to consider payrolling benefits then you should start planning now for 2024/25 tax year to ensure you are ready to register and do not miss the deadline.

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