P11D – Remember to report before the July deadline!

With the 6 July deadline nearing, it is essential to understand the updated reporting requirements for Class 1 National Insurance Contributions (NICs) on benefits in kind (BIKs).

Employers offering benefits, such as private healthcare, living accommodation, travel expenses, and company cars must report additional NICs through the payroll process or on a P11D form.

Significant changes are coming, however, that will simplify reporting BIKs through P11D forms for each employee receiving taxable benefits.

Employers currently have the option to manage BIKs directly through their payroll, a method known as ‘payrolling’, which must be set up before the tax year begins.

Otherwise, P11D forms need to be submitted online by 6 July following the tax year end.

Employers must also report the amount of Class 1A NICs via the P11D(b) form and ensure payments are made to HMRC by the 22 July deadline.

Late submissions can result in penalties of £100 per 50 employees for each month the forms are overdue.

All taxable benefits, excluding exempt expenses like business travel, business entertainment, and uniforms under specific conditions, need to be reported.

Certain trivial benefits are not taxable and thus exempt from reporting.

Remember from April 2026, it will become mandatory to report and pay Income Tax and Class 1A NICs on BIKs through payroll software, reducing administrative burdens due to the P11D and simplifying compliance.

If you have any queries about P11D reporting or any other payroll processes, please get in touch.  

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