The small business guide to the P11D

The small business guide to the P11D

Stay on form and learn what small businesses should know about the P11D tax form.

For small businesses, keeping things in order can be tough enough without the stress of adding your end of year tax return to your to do list.

We know you want to do right by your staff, with many businesses often going above and beyond for their employees. Some offer added benefits like mobile phones and laptops, private healthcare and even a company car, on top of existing salaries.

But as the old saying goes, there’s no such thing as a free lunch, and even added extras, benefits and perks of the job need to be tracked for end of year tax purposes. Which is where the P11D form comes in handy.

If you find tax taxing and can’t tell your P11D from your P11D(b), AXA can help make it easier for you. Follow our guide below and we’ll take you through the ins and outs of the P11D tax form, so your business can keep your ‘benefits in kind’ in good shape come the end of the tax year.

What is a P11D?

The P11D is a UK tax form used to report on ‘benefits in kind’ which employees or directors receive from their employer. These are generally added extras, expenses or ‘perks’, separate from the employee’s salary or wages, and could include things like a company car or private healthcare cover.

Once submitted, the form helps the HMRC calculate the total amount of tax and National Insurance an employee will have to pay on their salary annually.

Who needs the P11D?

P11D forms are completed and returned to the HMRC by employers each year, not the employee. So, if you run a small business, at the end of the tax year you have to give the HMRC details of any expenses or additional benefits payments you give to your employees on top of their salary. This includes payments or benefits made to any members of their families, like spouses or their children. You must complete a separate form for each of your employees.

You do not need to submit a P11D form for an employee if you’re paying tax on all their benefits through your payroll.

What’s a P11D used for?

Many businesses will reward employees with various types of added extras of benefits on top of their standard salary. Some of the most common benefits in kind which would be tracked on a P11D form are listed below:

Living accommodation and expenses

Company cars or vans, as well as mileage and fuel allowances

Assets provided to employees, like mobile phones or laptops

Self-assessment fees if paid by the company

Childcare costs

Private health insurance

Payments for use of home telephones

Non-business travel and entertainment expenses

So, if you’re the owner or director of a business and you’ve provided any of the benefits or extras above to your staff, you’re required to provide details of this to the HMRC via the P11D form.

How do I complete the P11D?

When getting started, it’s worth having to hand:

• Your Employer Reference Number (ERN), which you’ll be given when you first register with HMRC
• The names, National Insurance Numbers and dates of birth for all employees who have received benefits in kind in the last year
• Details of the benefits themselves, including the cost or total cash equivalent

Since April 2023, P11D and P11D(b) forms must be submitted online, except in circumstances where the employer has been deemed as digitally excluded. In addition to this, HMRC no longer accepts any paper amendments to your submission. All changes must be made via their online reporting system. You can find more details here.

The current P11D form has 14 separate sections which employers must complete. Below, we list out each section in turn to let you know what it is and what’s expected.

Assets transferred
This includes anything like property, goods or other assets which you may have purchased then transferred to an employee as part of their benefits package. If this applies to you, in this section of the P11D form you should enter the market value of the asset when it was given to the employee, or a figure based on the cost to you.

Payments made on behalf of the employee
For things like personal bills that your employee should have paid, but you paid instead as their employer, enter the value here.

Credit cards and vouchers
Given your employee any vouchers on top of their salary? Or do you give staff a travel season ticket as part of their employment with you? Enter the total cost to you of these cards and vouchers which can be exchanged for money, goods or services. Don’t include any vouchers that have already been taxed under PAYE or credit cards which are used for business.

Living accommodation
If you provide any living premises or accommodation to your employees or their family as part of their job it needs to be tracked on the P11D form. For example, your company may be based in Manchester, but you need a staff member to work a few days per week in London, so you provide a small flat for them while they work out of London. In that case, you should enter the cash equivalent of the living accommodation provided, or if the premises are rented, use the amount of rent payable instead of the gross rateable value. Bear in mind that the rules are different in Scotland, so for more information visit the UK Government’s own P11D guide.

Mileage allowances
If your staff need to drive a lot as part of their job, you may look to offer an allowance for the number of miles driven in their own vehicle.

The value you can enter in your P11D form for mileage is the total figure which remains after you’ve removed the approved amount which is exempt from tax. The approved amount is the number of business miles travelled, multiplied by certain rates depending on your vehicle.

The rates for the 2023-24 tax year are:

	First 10,000 business miles	Each business mile over 10,000
Cars and vans	45p	25p
Motorcycles	24p	24p
Cycles	20p	20p

Payments up to these limits are tax free, so don’t need to be reported on the P11D form. Find the full guidance on the UK Government website.

Cars and car fuel
If you provide a car to your employees, enter the list price of the car from day before first registration, including VAT, tax, delivery charges and number plates. You should also include the list price of any accessories fitted to the car like alloy wheels, if over £100. If there’s no list price, use a notational price – the price that would be reasonably expected to be the list price from the manufacturer for an equivalent car in the UK.

For fuel, enter the total car fuel benefit for all cars available.

Company vans
Similar with cars, if you provide a company van for employees it should be tracked on the P11D. These most up to date charges can be found on the UK Government website. The van benefit charge for 2024-2025 is now £3960, while the fuel benefit charge for private fuel is £757.

Beneficial loans
A beneficial loan is a short-term loan you might pay to an employee if, for example, they’re going through financial hardship and need some extra help. In these cases, enter the cash equivalent for each loan separately.

Medical treatment and dental
Many employers provide some private medical coverage as part of their overall benefits package. Enter the cost of all medical and dental expenses that you’ve paid in the tax year and all insurance premiums paid against treatment in the P11D for each relevant employee.

Relocation expenses
If an employee has to relocate or move in order to work for you, qualifying expenses over (£8000 in 2022) should be tracked in the P11D. Some exempt costs could include estate agent fees, stamp duty, house-hunting visit costs and removal costs.

Services supplied
For any services supplied where the contract is between you and the service provider, but the beneficiary is the employee, enter the additional cost in this section of the P11D. Examples could include things like counselling.

Assets placed at employee’s disposal
For the use of certain employer-owned assets by the employee, like the use of boats or motorcycles for example, enter the annual value of the use of the asset or any rent or hire charge, if this is higher.

There’s no tax benefit for items provided to an employee with a disability to allow them to do their job.

Other Items
Other items which aren’t in other categories above could include:

• Subscriptions
• Educational assistance
• Other relocation benefits (not listed above)
• Employer-provided childcare

Expenses Payments
There’s also a list of additional expenses payments which could be included in the P11D:

• Travel and subsistence payments
• Entertainment
• Home telephone
• Overnight expenses

You can complete the forms online using: PAYE online for employers service or Online end of year expenses and benefits forms. And if you have any problems or questions when completing your tax form, you can contact the UK Government’s Employer Helpline for advice or visit their guide on How to complete forms P11D and P11D(b).

So what’s a P11D(b) form?

In addition to the P11D form, you’ll also need to complete the helpfully named P11D(b) form too.

This is a separate form which tells HMRC how much Class 1A National Insurance you need to pay on all the expenses and benefits you’ve provided and to declare that you’ve sent form P11D to the HMRC. It basically summarises all the individual P11D forms you’ve completed for each of your employees.

You’ll need to submit a P11D(b) form if:

• you’ve submitted any P11D forms
• you’ve paid employees’ expenses or benefits through your payroll
• HMRC have asked you to, either by sending you a form or an email

When’s the P11D deadline?

The return date for the P11D and P11D(b) forms is usually around 6 July following the tax year in question. So, for example, the P11D deadline for 2023 to 2024 is 6 July 2024, while the deadline for 2024 to 2025 will likely be 6 July 2025.

If you don’t make your return by the deadline or if you submit an incorrect return, you could face certain penalties.

You’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late. You’ll also be charged penalties and interest if you’re late paying HM Revenue and Customs.

Changes from April 2026

From April 2026, it will become mandatory for employers to payroll benefits in kind provided to their employees.

The government will mandate the reporting and paying of Income Tax and Class 1A National Insurance Contributions on payments on benefits in kind via payroll software. This change will build on the continued efforts by the government to fully digitise the reporting of benefits in kind. You can find more information on this here.

Protecting your employees – and your business

The P11D is a helpful way to keep track of the benefits and added extras you give to your staff, to make sure everything is all above board when the new tax year rolls around and the taxman comes knocking.

But it’s only one way to make sure you’re doing right by your staff. If you have employees, you need to have the correct level of employers’ liability insurance to protect them if they get injured or become ill as a result of working for your business. Find out more about Employers’ Liability insurance from AXA or get a quote today.

If you’re finding the P11D form difficult to understand, head to the UK Government website for full details or consider hiring a qualified professional to guide you through the process of filing.