P11D and Benefits in Kind (2026): Deadlines, Class 1A and Worked Examples

If your business gives staff or directors anything other than pay — a company car, private medical cover, an interest-free loan — you probably have a P11D to file. This guide covers the P11D rules for 2026: what counts as a benefit in kind, the 6 July and 22 July deadlines, Class 1A National Insurance at 15%, the 2026-27 figures for cars, fuel, vans and loans, what's exempt, and the move to mandatory payrolling of benefits that starts in April 2027. Worked examples in pounds show what a small company actually pays.

Quick answer

A P11D reports the taxable value of benefits and non-exempt expenses you gave each employee or director in a tax year. The P11D(b) totals them and works out your Class 1A National Insurance at 15%. Both are due by 6 July after the tax year ends, and the Class 1A must be paid by 22 July (19 July by cheque).

• For 2026-27 benefits: file by 6 July 2027, pay Class 1A by 22 July 2027

• Give each employee a copy of their P11D by the same 6 July deadline

• Payrolling becomes mandatory for cars, fuel, vans and medical cover from 6 April 2027

• Late P11D(b) penalty: £100 per 50 employees for each month or part month

What a P11D is and who has to file one

A P11D is the annual return of benefits in kind and taxable expenses for one employee or director. A benefit in kind is anything of value an employee gets because of their job that isn't paid as salary: a car they can use privately, health insurance, a loan, living accommodation, or an asset given to them. The employer works out the "cash equivalent" of each benefit using HMRC's rules, reports it on the P11D, and HMRC adjusts the employee's tax code (or their Self Assessment) to collect Income Tax on it.

The P11D(b) is the employer's summary. It adds up the taxable benefits across all employees, works out Class 1A National Insurance on them, and tells HMRC how much the employer owes. You must file a P11D(b) if you've provided any benefits that attract Class 1A, including benefits you've payrolled, even if you don't need any individual P11Ds. If HMRC sends you a P11D(b) reminder or notice and you have nothing to report, tell HMRC rather than ignoring it.

Small limited companies are some of the most common P11D filers, because directors often receive benefits such as a company car, medical cover or a director's loan. A one-person company with a director's loan above £10,000 has a P11D obligation even if it has no other staff. If your company runs payroll for the first time, see our employer registration guide; P11D reporting uses the same PAYE scheme.

P11D at a glance (2026-27)

6 July

P11D, P11D(b) and employee copies

After tax year end

15%

Class 1A National Insurance

Employer only

22 July

Class 1A payment

19 July by cheque

6 April 2027

Mandatory payrolling starts

Cars, fuel, vans, medical

P11D deadlines for the 2026-27 tax year

All P11D deadlines run from the end of the tax year on 5 April. For benefits provided between 6 April 2026 and 5 April 2027, the dates are:

P11D deadlines for 2026-27 benefits

5 April 2027

Tax year ends; work out each employee's benefits

6 July 2027

Submit P11Ds and P11D(b) online; give employees their copies

19 July 2027

Class 1A payment must reach HMRC if paying by cheque

22 July 2027

Class 1A payment deadline for electronic payments

22 October 2027

PAYE Settlement Agreement tax and Class 1B due (19 October by cheque)

You submit online through HMRC's PAYE Online service if you have fewer than 500 employees, or through payroll software. HMRC only accepts paper forms from businesses that have stopped trading, with a covering letter. Employees leaving during the year still need a P11D at year end; you can give them a copy then, or earlier if you prefer.

Missing the P11D(b) deadline costs £100 per 50 employees for each month or part month, and late payment of Class 1A attracts penalties and interest. Inaccurate P11Ds can also lead to penalties if the error is careless, so build the review into your year-end payroll routine rather than leaving it to the week before 6 July.

What counts as a taxable benefit in kind

HMRC's rules set a cash value for each type of benefit. The most common ones on small-business P11Ds are below.

Some items are reported on the P11D but taxed through payroll as earnings for Class 1 National Insurance rather than Class 1A. Paying an employee's personal bill (their home phone contract or gym membership in their name) is the classic example: it's treated as pay. Getting the Class 1 versus Class 1A split right matters, because Class 1 also carries employee NI.

Company cars in 2026-27

Company cars are usually the largest item on a P11D. The taxable value is the car's list price (including options and VAT, less any capital contribution from the employee up to £5,000) multiplied by an appropriate percentage set by its CO2 emissions. For 2026-27, a zero-emission car is at 4%, up from 3% in 2025-26, and already legislated to rise to 5% in 2027-28. Plug-in hybrids with emissions of 1 to 50 g/km range from 4% (130 miles or more of electric range) to 16% (under 30 miles). Higher-emission cars climb to a cap of 37%.

If the employer pays for any private fuel, a separate car fuel benefit applies: the £29,200 multiplier times the car's percentage. It's all or nothing; you can't reduce it by asking the employee to repay part of the fuel. The only way out is for the employee to reimburse all private fuel in full by the deadline. That makes free fuel one of the most expensive benefits in the system for petrol and diesel cars. Electricity for an electric company car isn't treated as fuel.

Vans and pool vehicles

Vans are treated far more gently than cars. If an employee can use a company van privately, the benefit is a flat £4,170 a year whatever the van cost, plus a flat £798 if the employer pays for private fuel. A zero-emission van carries no van benefit at all. There's also an important exception: if the only private use is ordinary commuting and insignificant personal use, such as stopping at a shop on the way home, no van benefit arises. That makes vans attractive for trades businesses whose staff take the vehicle home to start at a customer's site the next morning.

Pool cars and pool vans, which are shared, normally kept at the business premises overnight and used only for business with any private use being incidental, aren't taxable at all. The conditions are strict, so keep a log showing who used each pool vehicle and where it was kept.

Working out a company car benefit

Step 1

List price incl. options and VAT

Step 2

Less employee capital contribution (max £5,000)

Step 3

× appropriate percentage

4% to 37%

Step 4

Less employee payments for private use

Step 5

Add fuel benefit if private fuel paid

£29,200 × %

Step 6

Class 1A at 15%

Employer pays

How employees pay the tax on their benefits

The employer pays Class 1A; the employee pays Income Tax. HMRC collects the employee's share by reducing the tax-free amount in their tax code for the following year, using the P11D figures or the estimate you gave when the benefit started. If benefits are worth more than the Personal Allowance, the employee gets a K code, which adds the excess to their taxable pay; payroll can't take more than half of someone's pay in tax under a K code, and anything left over is collected another way.

Because tax codes run on estimates, a new benefit can leave someone underpaying until HMRC catches up. Tell HMRC when you start or stop providing a company car, or when the car changes, so the code updates during the year. Directors and higher earners who file a Self Assessment return include the P11D figures there and settle any difference by 31 January. When the payrolling rules start in April 2027, this lag disappears for cars, vans, fuel and medical cover, because the benefit is taxed through each payslip as it's received.

Worked examples: what benefits cost in 2026

All examples use 2026-27 figures. The employer pays Class 1A at 15%; the employee pays Income Tax at their marginal rate on the cash equivalent.

1. Electric company car. A director has an electric car with a list price of £40,000. Taxable value: £40,000 × 4% = £1,600. Class 1A: £240. If the director is a higher-rate taxpayer, their Income Tax is £640 a year, about £53 a month through their tax code.

2. Petrol car with free fuel. A sales manager has a petrol car with a list price of £30,000 and emissions above 155 g/km, so the percentage is 37%. Car benefit: £11,100. Fuel benefit: £29,200 × 37% = £10,804. Total benefit £21,904. Class 1A: £3,285.60. As a basic-rate taxpayer, the employee pays £4,380.80 of Income Tax on it. Withdrawing the free fuel alone saves the company £1,620.60 of Class 1A and the employee £2,160.80 of tax.

3. Director's loan. A director borrows £20,000 interest-free from their company for the whole tax year. Because the balance is over £10,000, the benefit is interest at the official rate: £20,000 × 3.75% = £750. Class 1A: £112.50. As a higher-rate taxpayer the director pays £300 of Income Tax. The company also needs to think about the separate Corporation Tax charge if the loan isn't repaid in time; see our directors' loan account guide.

4. Private medical insurance. The company pays a £1,200 annual premium for an employee's cover. Benefit: £1,200. Class 1A: £180. A basic-rate employee pays £240 of tax.

Add those four up and a small company providing them would report £25,454 of benefits and pay £3,818.10 of Class 1A by 22 July. That's money many small businesses forget to budget for, because it arrives as a single bill months after the year ends. Our budget planner can spread it across the year.

Benefits you don't need to report

Many common perks are exempt and don't go on a P11D at all. Knowing them saves both tax and paperwork.

• Employer pension contributions to a registered scheme.
• One mobile phone per employee, including the contract, provided by the employer.
• Trivial benefits that cost £50 or less, aren't cash or a cash voucher, aren't a reward for work and aren't in the contract. Directors of close companies are limited to £300 of trivial benefits a tax year.
• Annual parties open to all staff, costing £150 a head or less per person in total for the year. Go a penny over and the whole cost becomes taxable, not just the excess.
• Health: one health screening or medical check a year, eye tests for screen users, flu vaccinations and up to £500 of recommended treatment to help someone return to work after 28 days off sick.
• Business expenses paid or reimbursed at cost, and mileage payments up to the approved rates, which are now 55p a mile for the first 10,000 miles. See our mileage allowance guide.
• Loans where all an employee's beneficial loans total £10,000 or less throughout the year.
• Workplace facilities such as on-site parking, canteens open to all staff, and workplace charging for electric cars.

If you provide a benefit that is technically taxable but too small or awkward to report individually, a PAYE Settlement Agreement (PSA) lets the employer pay the tax and Class 1B National Insurance on the employee's behalf. PSA payments are due by 22 October (19 October by cheque).

Payrolling benefits: what changes in 2027 and 2028

Payrolling means adding the value of a benefit to an employee's pay each month so the Income Tax is collected in real time, instead of through a P11D and a tax code adjustment. Until now it has been voluntary. HMRC closed new registrations ahead of the mandatory regime: only employers that registered before 6 April 2026 can payroll benefits in 2026-27. Everyone else must file P11Ds for 2026-27 benefits as usual by 6 July 2027.

How benefits are reported, year by year

Tax year	Cars, fuel, vans, medical	Other benefits	Loans and accommodation
2026-27	P11D (or voluntary payrolling if registered before 6 April 2026)	P11D (or voluntary payrolling)	P11D only
2027-28	Must be payrolled from 6 April 2027	P11D	P11D
2028-29	Payrolled	Must be payrolled from 6 April 2028	Voluntary

2026-27

Cars, fuel, vans, medical

P11D (or voluntary payrolling if registered before 6 April 2026)

Other benefits

P11D (or voluntary payrolling)

Loans and accommodation

P11D only

2027-28

Cars, fuel, vans, medical

Must be payrolled from 6 April 2027

Other benefits

P11D

Loans and accommodation

P11D

2028-29

Cars, fuel, vans, medical

Payrolled

Other benefits

Must be payrolled from 6 April 2028

Loans and accommodation

Voluntary

HMRC originally planned to bring almost every benefit into payroll in April 2027. After delays in publishing the technical detail, it split the change into two phases. Phase 1 from 6 April 2027 covers company cars, car fuel, vans, van fuel and employer-provided medical benefits. Phase 2 from 6 April 2028 brings in most other benefits. Beneficial loans and living accommodation stay voluntary. HMRC says the final phase 1 guidance will line up with the Budget on 28 October 2026, and it is still considering whether to let employers report Class 1A in-year for benefits that aren't yet mandated.

What this means in practice for a small employer:

• Check your payroll software supports benefit payrolling and the new reporting fields before April 2027.
• Collect car data now: list price, CO2, electric range, fuel arrangements and any employee contributions for every company car and van.
• Talk to staff: payrolling changes their monthly net pay from April 2027, though the annual tax shouldn't change.
• Keep P11D processes for 2027-28 for non-mandated benefits such as loans, and for anything not yet payrolled.

Common P11D mistakes and how to fix them

P11D year-end checklist

0/8

• List every benefit and non-exempt expense by employee, including directors
• Check company car list prices, CO2 and electric range against the V5C or manufacturer data
• Confirm whether any private fuel was paid and whether it was fully repaid
• Review director's loan balances for any point above the threshold in the year
• Exclude genuinely exempt items, and check the annual party cost per head
• Separate Class 1 items (personal bills) from Class 1A benefits
• Submit P11Ds and P11D(b) and give employees their copies by 6 July
• Pay Class 1A by 22 July with the correct payment reference

Share Print

The errors HMRC sees most often are using the wrong list price for a car (forgetting optional extras), assuming a car is low-emission without checking, missing the fuel benefit, and forgetting a director's loan that went above the threshold for a few weeks. Another is treating something as a trivial benefit when it's really a reward for performance, such as a voucher for hitting a target.

If you spot an error after filing, submit an amended P11D and P11D(b) online. Tell the employee too, because their tax code or tax return will need to change. Directors and higher earners who file Self Assessment report the P11D figures on the employment pages of their tax return, so the employer's figures need to be right before 31 January.

Budget watch

The Budget on 28 October 2026 is expected to settle the final rules for phase 1 payrolling. Company car percentages are already announced for the next few years, but Class 1A follows the main employer NI rate, so any change to employer National Insurance would carry straight through to benefits. We'll update this page after the Budget.

Official links

• Expenses and benefits for employersOverview, reporting and deadlines
• Mandatory payrolling: phased introductionPhase 1 April 2027, phase 2 April 2028
• Company car appropriate percentages480 Appendix 2
• Van and fuel benefit charges 2026-27£29,200, £4,170, £798
• Official rate of interestBeneficial loans
• Trivial benefits£50 rule and director cap

What to do next

Make a list of every benefit your business provides now, put a value on each using the 2026-27 figures above, and set aside 15% of the total for July 2027. If you run company cars, vans or medical cover, speak to your payroll provider this winter about April 2027. For the wider cost of employing people, read our employer National Insurance guide; for directors taking money out of a company, see dividend tax.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

When is the P11D deadline?

P11D forms, the P11D(b) and copies for employees are due by 6 July after the end of the tax year. For benefits provided in 2026-27, that's 6 July 2027. The Class 1A National Insurance shown on the P11D(b) must be paid by 22 July (19 July by cheque).

What is Class 1A National Insurance and what rate is it?

Class 1A is employer-only National Insurance on most taxable benefits in kind. The rate is 15%, the same as the main employer rate since April 2025. You work it out on the total taxable value of benefits, report it on the P11D(b) and pay it once a year. Employees don't pay National Insurance on benefits; they pay Income Tax through their tax code.

Do I need a P11D if I payroll benefits?

Not for benefits you've fully payrolled, but you still file a P11D(b) for the Class 1A. Payrolling is voluntary in 2026-27 and only for employers who registered before 6 April 2026. From 6 April 2027 it becomes mandatory for company cars, fuel, vans and medical benefits, and from 6 April 2028 for most other benefits. Loans and accommodation stay optional.

Is a director's loan a benefit in kind?

Yes, if a director (or employee) owes the company more than £10,000 at any point in the tax year and pays interest below the official rate. The benefit is the interest at 3.75% for 2026-27 less any interest actually paid. It goes on the P11D and attracts Class 1A National Insurance.

What benefits don't need to go on a P11D?

Exempt items include employer pension contributions, one mobile phone per employee, trivial benefits costing £50 or less (capped at £300 a year for directors of close companies), an annual party costing £150 a head or less, and one health screening a year. Business expenses reimbursed at cost or at approved mileage rates also don't need reporting.

What happens if I file my P11D late?

A late P11D(b) attracts a penalty of £100 per 50 employees for each month or part month. Late Class 1A payments also attract penalties and interest. If you've already submitted and spot an error, you can amend online. Employees also need their copy by 6 July so they can check their tax code or tax return.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Expenses and benefits for employers: deadlines — HMRC / GOV.UK · accessed 9 October 2026
2. 2.Expenses and benefits for employers: reporting and paying — HMRC / GOV.UK · accessed 9 October 2026
3. 3.Paying your employees' expenses and benefits through your payroll — HMRC / GOV.UK · accessed 9 October 2026
4. 4.The phased introduction of mandatory payrolling for benefits in kind — HMRC · accessed 9 October 2026
5. 5.Rates and thresholds for employers 2026 to 2027 — HMRC / GOV.UK · accessed 9 October 2026
6. 6.Company car benefit: the appropriate percentage (480 Appendix 2) — HMRC · accessed 9 October 2026
7. 7.Van benefit charge and fuel benefit charges for cars and vans for tax year 2026 to 2027 — HMRC policy paper · accessed 9 October 2026
8. 8.Beneficial loan arrangements: HMRC official rates — HMRC · accessed 9 October 2026
9. 9.Expenses and benefits: trivial benefits — HMRC / GOV.UK · accessed 9 October 2026
10. 10.Expenses and benefits: social functions and parties — HMRC / GOV.UK · accessed 9 October 2026
11. 11.Expenses and benefits: medical or dental treatment and insurance — HMRC / GOV.UK · accessed 9 October 2026