Employers must submit a P11D(b) form to HMRC for the 2024/25 tax year if any employees (including directors) have received benefits in kind or certain expense payments in the year to 5 April 2025. This will detail the total expenses and benefits for all employees and confirm the Class 1 National Insurance Contributions liability arising as a result. Please see here for further details in regards to types of benefits.
The filing deadline each year is 6 July following the end of the tax year and payment of the Class 1A NIC liability must be made by 22 July (or 19 July if paying by cheque).
You should therefore now review all benefits provided to employees and directors during the 2024/25 tax year and ensure that all taxable benefits are reported on the required P11D(b).
P11D forms must also be issued to each individual employee in receipt of any benefits in kind or expense payments that have been reported on the P11D(b), unless the amounts have been included within payroll (see below), so that they can report the amounts on their own personal tax returns.
Following the case ‘HMRC vs Coca-Cola’ great attention should be given when considering if a vehicle should be treated as a van or a car for benefit in kind purposes. This will need further consideration in future years given the government’s proposals around double cab pick-ups.
There are penalties of up to £3,000 per return if an incorrect form P11D is filed fraudulently or negligently and £100 per 50 employees for each month the form is late.
If you require any assistance with the preparation of P11Ds, please let us know and we can provide you with some recommendations of providers offering this service.
Payrolling of Benefits from April 2027
Historically, when employees are provided with benefits-in-kind they receive a P11D at the end of the tax year, which states the total benefits received in the year. The employees must then pay tax on these benefits either by including the information on their self-assessment tax return or by an adjustment to their PAYE code to collect the tax in the following tax year.
Since 5 April 2016 it has been possible to include benefits within payroll, meaning that the employee will pay tax on the benefit throughout the year. This reduces the need to prepare individual P11Ds and provide these to employees, who then need to ensure they pay any tax due on the amounts. Please see here for our previous article in relation to this.
From 6 April 2027 (recently delayed from the previous date of 6 April 2026), it will be mandatory for employers to include taxable benefits provided within the payroll, meaning that the employee will pay tax on the benefit throughout the year instead of being issued an individual P11D at the end of the tax year and needing to ensure they pay any tax due.
The payrolling benefits will allow employers to report and tax most employee benefits through the payroll on a monthly basis, rather than submitting a P11D form at the end of the year.
All benefits can be payrolled, except beneficial loan interest and living accommodation.
When company cars are payrolled there is no need to submit the P46 car form as all details are included in the full payment submission. The car details or value of any benefit can be adjusted throughout the year to ensure the correct tax is being paid.
If you want to start payrolling benefits, you need to register to do so before the start of the tax year and will then need to start payrolling the benefits in the first pay period. When you register you must tell HMRC which employees and which benefits you are going to be payrolling. HMRC will remove the benefits from the employees PAYE codes so that they are not paying too much tax.
At the end of the tax year, the employee’s P60 will include the total taxable income i.e. the taxable pay as well as the value of payrolled benefits.
Although P11D forms are not required to provide to employees, a P11D(b) is still required to be submitted to include the value of all benefits that have been payrolled in the year so that you/the employer can pay Class 1A NIC.
If you are interested in payrolling benefits from 2026/27, you should speak with your payroll provider to get this arrangement in place and you will need to register with HMRC by 5 April 2026.
Double Cab Pick-ups (DCPUs)
It is also worth mentioning that from 6 April 2025, the benefit-in-kind position for double cab pick-ups is now in line with other vehicles and HMRC will evaluate what it considers the ‘primary suitability’ of a vehicle at the time of manufacture to decide whether it will be classed as a car or goods vehicle. The expectation is that most, if not all, DCPUs (even with payload over one tonne) will be treated as cars. Please see our Year-End Tax Planning 2025: Key Changes and How to Prepare post with further detail in regards to this change.