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What is a P11D form?

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What is a P11D form?

In this article we take a closer look at the P11D form, including what you need to include on it, when you need to file it, and – most importantly of all – what will happen if you don’t fulfil your P11D duties. We’ll also cover the big changes coming in 2026 to ensure you’re ahead of important rulings. 

The P11D form is used to report benefits in kind. These are items or services which you (or your employees) receive from your company in addition to your salary, such as private healthcare, interest-free loans (to pay for train season tickets, for example) and company cars. All of these items have an associated monetary value, which makes them subject to tax. 

As with other forms of taxable income and benefit, you need to report them to HMRC. To do this, you’ll complete an annual P11D form as part of your Self-Assessment tax return. However, this practice may become a thing of the past from April 2026 – keep reading to learn more. 

As benefits in kind effectively increase your salary, there may be National Insurance contributions (NICs) to be paid on them, although it’s important to note these contributions will be paid by the company, not the individual.

Who needs to file a P11D?

P11Ds are filed by the employer, not the employee – although, for many freelancers and contractors, they’re one and the same.

Big changes to the P11D in April 2026

In 2024, HMRC announced big changes coming to the existing P11D process as of April 2026. From this date, all employers must payroll any benefits rather than submit a P11D form, which is forecast to reduce the need for over 4 million P11Ds to be submitted each year. 

This change is a welcome one, as it will alleviate much of the time burden associated with filling out an additional form for what can be a simple benefit such as medical insurance. In the new system, benefits are reported in real time through payroll software. 

To be ready for this change, ensure your payroll software has the functionality required to enable you to report benefits. If it doesn’t, you have until April 2026 to get your system upgraded or choose a new platform. 

It’s not yet clear whether this mandatory payrolling of benefits will apply to every type of benefit, such as credit cards – nor if it accounts for the limit on deducting more than 50% from employee salaries. HMRC has yet to issue further clarification, so keep your eyes peeled. 

When do I need to file a P11D?

Helpfully, P11D filings aren’t dependent on your company year, and must all be filed by 6th July following the tax year in question. So, your P11D for the tax year running 6th April 2023 to 5th April 2024 must be filed by 6th July 2024.

Please note: as of 2023, HMRC no longer accepts paper filing. You’ll need to do your P11D digitally as part of Self Assessment, no more printing it out and mailing it in! 

What needs to be included in a P11D?

Generally speaking, any items the company pays for and that the employee benefits from need to be included on the P11D form. Expenses and benefits that need to be reported to HMRC are:

  • Home phones for personal use
  • Shopping or hospitality vouchers
  • Gym memberships
  • Non-business entertainment perks such as cinema and gig tickets 
  • Accommodation owned by your employer
  • Pecuniary bills
  • Company cars
  • Loans for rail season tickets
  • Other loans
  • Health insurance
  • Assets provided to an employee that have significant personal use
  • Self Assessment fees paid by the company
  • Non-business travel expenses
  • Non-business entertainment expenses

P11D exemptions for certain business expenses

Some expenses are exempt from P11D. These are governed by an exemption system, under which the majority of business expenses incurred personally by company employees no longer need to be recorded on a P11D form. Exempt expenses include:

  • Business Travel
  • Business entertainment expenses
  • Credit cards used for business purposes
  • Fees and subscriptions.

P11D penalties for late filing

As with most tax filings, HMRC is ready and waiting with the penalty hammer should you file late or incorrectly. If you miss the deadline set on the 6th July (either online or on paper), you won’t incur penalties straight away – you have about a fortnight to put things right and file. 

Should July 19th come and go and your P11D is still nowhere to be seen, your company (not you personally) will incur fines of £100 per month (or part month) per 50 employees.

If you still haven’t filed by November, HMRC will send you a reminder, along with details of all the penalties you’ve accrued up until then. If your P11D is incorrect, you could also face fines – but only if HMRC believes you deserve them.

If your mistake was genuine and HMRC believes you took reasonable care before filing, you might not face any fines. However, penalties of 30%, 70% or 100% of the owed tax can be applied if HMRC believes you acted carelessly, deliberately misled them or attempted to conceal your true liabilities.

Following the discontinuation of the P11D in April 2026, all filing deadlines will coincide with self-assessment so make sure you’re completing and filing yours on time. See our guide to self assessment to learn more.

P11D Common mistakes

Directors’ loan accounts

As a director, you don’t need to pay interest on money you owe to the company - provided the director’s loan is less than £10,000.

If your directors’ loan account (DLA) is overdrawn by more than £10,000 at any point in the tax year, HMRC will expect interest to be paid on the total overdrawn amount. This should be charged at the HMRC published rate of interest (2% for the 6th April 2021 until the 5th April 2023) and will need to be paid by the relevant director.

The overdrawn amount is effectively a loan from the business to the director, is treated as an employment-related benefit, and must be included on the relevant director’s P11D form. 

If you need to pay loan interest on an overdrawn DLA, then the company will also need to pay Class 1A NICs on the interest payments (the current rate is 13.8% for the 2023/24 tax year). The company will also be required to complete Form P11D(b) and submit it to HMRC.

Finally, make sure that you’re not caught out by Bed & Breakfasting. This is where you settle a director’s loan by depositing personal cash, only to withdraw the same amount within 30 days.

Home phone usage

The cost of calls made by employees from their home telephone or personal mobile where the company has repaid the expense can be overlooked. Be sure to keep a note of all your business phone usage and make sure every call is included. Getting a company mobile phone is strongly recommended to avoid any confusion.

Neglect/forgetfulness

As with all tax filings, the accuracy of your P11D form is only as good as the data used to complete it. Try to keep your records up to date, reconcile your accounts often and address any problems early. If you stay on top of your accounts, filing your P11D will be a walk in the park.

What is a P11D(b)?

On HMRC’s website, you will sometimes see Form P11D(b) referenced. A P11D(b) is a form employers must submit, summarising the individual P11D forms they’ve completed for their employees. As part of the upcoming changes to the Benefits In Kind process, these forms will become obsolete as they are absorbed into a company’s payroll system. 

Manage your accounts more efficiently with Crunch

If you’re running a limited business, you need to understand how these changes impact your business. As part of your payroll system, you’ll have to declare Benefits In Kind rather than completing a P11D, which means that you’ll no longer need to fill one out during Self Assessment for your personal tax – it’s instead the company’s responsibility to report BIK (which means, in most cases for Directors of limited companies, that the responsibility is on you when you do your payroll). 

Use Crunch to manage your limited company accounting and we’ll help keep you on track with all upcoming changes to the tax system. With us, you’ll never have to worry about being behind  the curve – so you can focus on running your business while we take care of your accounts. 

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Lucinda Watkinson
Head of Accounting
Updated on
April 3, 2024

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