Employers who provide benefits in kind to employees and directors normally need to report these to HMRC through either their payroll software or by using a P11D form so the correct amount of tax can be paid. In this article we explain what P11D forms are, who needs to use them, and what to include.

What is a P11D form?

Businesses use P11D forms to tell HMRC about the benefits in kind they provide to staff. Benefits in kind, or BiKs for short, are goods and services which some employers give to employees for free or at a discounted rate alongside their normal salary. For example, a company car or a gym membership.

Although benefits in kind don’t take the form of cash, they do increase the value of what the employee receives from their employer. To keep things fair, and so people can’t avoid tax by taking part of their salary as a benefit instead, they’re reported to HMRC and subject to tax and National Insurance. Employers can report these perks through their payroll software (known as payrolling) or by submitting a P11D form.

Do I need to submit a P11D form?

You’ll need to file a separate P11D form for each employee or director you provide with benefits in kind, unless you deduct the tax they owe through payroll.

It’s the employer’s responsibility to submit P11D forms rather than an employee’s, although in a small business where you’re the sole director, you might be both!
 

What do I need to show on the form?

Along with the employee or director’s name, date of birth, and National Insurance number, you’ll need to confirm the value of the benefits in kind they received, and the date.

If they’ve already paid some of the tax owed on the benefit’s value through payroll, you can include this information under the heading ‘Amount made good or from which tax deducted’.

Do I need to include VAT on a P11D form?

Yes, even if you’re VAT registered and might be able to reclaim some or all of the VAT paid, the P11D form should still include the full amount of VAT paid.

How do I submit a P11D form?

You can submit P11D forms either:

• Through your payroll software
• Using HMRC’s PAYE Online service (which allows submissions for up to 500 employees), using the same account that you use to report other PAYE information
• By downloading a P11D form and sending the completed form to HMRC through the post

If you already deduct and pay tax on employee benefits through your payroll (similar to the way you report deductions that you make for staff wages) you won’t need to submit a P11D for them.

Submitting a P11D(b) form

The business must also submit a P11D(b) form to tell HMRC how much Class 1A National Insurance it needs to pay as an employer. This is because employers make National Insurance Contributions (NICs) on the value of benefits they give to employees and company directors.

What is the deadline to submit a P11D form?

The deadline for submitting a P11D form is 6th July following the end of the tax year that it relates to. For example, if you need to submit a P11D form for the 2023/24 tax year, the submission deadline is 6th July 2024.

Do I need to give employees a copy of their P11D?

Yes, employers are legally obliged to give employees a copy of the information provided to HMRC about their benefits in kind. If they’re self-employed on the side (which you might not know about!) or a company director, they’ll need that information for their Self Assessment tax return. They can also ask HMRC for a copy of the information which you submit.

 
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