What is a P11D? A Complete Guide

Navigating the complexities of employee benefits and tax obligations can be daunting for business owners and HR professionals. Tax is a must when it comes to running a business, but it gets even more nuanced when you need to report on taxable benefits. 

This is where a P11D form comes into play. And we get it—most people don’t start a business because they love tax. A P11D form, and tax in general can be fiddly, and, let’s face it, sometimes frustrating. But they are a necessary part of running your business. 

So what is a P11D form, and do you have to submit one?

TLDR

• Understand the P11D submission requirements: Familiarise yourself with the types of benefits and expenses that must be reported in a P11D form. Be sure to include company cars, loans, and any other perks provided to employees. 
• Accurately value benefits: Ensure all benefits are valued correctly according to HMRC guidelines. 
• Know the deadline: Submit the P11D form before the deadline (usually the 6th of July).
• Maintain accurate records: Streamline the process by keeping detailed records. 
• Review for exemptions: Be aware of any exemptions to ensure accurate reporting. 
• Learn about a better way: Employment Hero’s Employment Operating System takes the hassle out of admin and boosts efficiency around the P11D process.

What is a P11D?

A P11D is the government’s way of making sure every company discloses and reports employee benefits and expenses. It’s a crucial document that must be filed annually and include any non-cash benefits that each employee has received over the course of the tax year.

It’s no surprise that everyone loves perks—they are integral to a positive company culture—but if you grant your employees benefits or perks such as company cars, medical cover or childcare vouchers, you’ll need to fill out a P11D form. It shows how much these benefits are worth and it helps tax authorities determine how much tax the employee should pay. 

Why is a P11D important for employers and HR professionals?

Compliance is essential for any business, and completing a P11D is a key payroll responsibility because it ensures you are tax-compliant. Failing to complete one can result in penalties from HMRC. The consequences could include a fine, which might affect the financial health of your company. Not in this economy.

It’s not just important for your company but also important for your employees, as it ensures they are paying the correct amount of tax on non-cash benefits. Knowing the total cost of employee benefits helps you make informed decisions regarding what you offer. 

Who needs to complete a P11D form?

All businesses with employees need to complete a P11D form for each employee who receives taxable benefits, and you will need a separate form for every employee. Yes. Really. 

In larger companies, this may be handled by the finance department, but for a lot of smaller or growing businesses, the task of filling out a P11D form is often left to people who aren’t tax or financial compliance specialists. 

You will need to fill out a P11D form for: 

• Employees receiving taxable benefits
• Directors and shareholders 
• Employees who earn above the National Insurance (NI) threshold
• Employers with IR35 obligations

It’s important to note that thresholds may have changed from the previous tax year, and utilising advanced payroll software can ensure you’re up to date on all the relevant changes. Learn more on reporting and paying business expenses.

Types of expenses and benefits to report

Changes to the way we report benefits in kind are coming in 2026, but for now, a P11D submission is still mandatory.

So, what should you be reporting on the P11D? Here’s a quick breakdown.

• Company cars: You will also need to know the car’s list price in order to calculate the taxable benefit. 
• Health insurance: Calculate the total cost for the employee’s medical insurance premium and report the total amount (including any additional costs for dependents) as a taxable benefit. 
• Loans: Any loans given to employees at reduced or zero interest rates must be reported, and the taxable benefit must be calculated based on the difference from the official rate. 

• Living accommodation: If an employer covers accommodation costs for an employee, they should calculate the taxable benefit by taking the annual value of the accommodation and the actual cost incurred by the employer—including the mortgage, repairs and insurance—and subtract any rent paid by the employee. 
• Childcare: Any payments or vouchers provided to employees to help cover the cost of childcare should be reported accurately. Firstly, identify the type of childcare benefit, such as direct payments or vouchers, and determine the value of the benefit. You can do this by establishing the total cost of childcare benefits provided over the tax year, taking into account any tax-free limits. Subtract the tax-free amount to determine the taxable portion. 
• Travel and subsistence expenses: This includes any reimbursed travel costs for business-related trips, including mileage allowances, accommodation expenses, and subsistence payments made for meals. 

P11D exemptions

Certain benefits provided to employees are not subject to tax reporting, as they aren’t subject to Class 1A National Insurance contributions and are therefore exempt. To remain compliant with UK tax regulations, it’s important for small business owners and HR professionals to understand these exemptions. Here are some examples: 

• Small trivial benefits (worth less than £50 and should not include cash or cash vouchers)
• Mobile phones provided for business use (note: if an employee has more than one business phone, it should be reported)
• Laptops that are necessary for work are exempt, as long as only one business laptop is provided
• Business travel expenses (e.g. mileage for personal vehicles when travelling for work)
• Basic medical treatments and tests such as eye tests. 

How to complete a P11D form

HMRC no longer accepts paper copies of the P11D form, so you must complete and submit it online. 

• PAYE online service: It is possible to fill in and submit the documents via HRMC’s PAYE online services. 
• Payroll software: If you’re looking for a more streamlined approach, we advise submitting via payroll software like Employment Hero. Our software is recognised by HMRC and is designed to help ensure accuracy and compliance.

You will need to: 

• Collect all of the data regarding employee benefits provided during the tax year. Gather relevant invoices and receipts before you begin. 
• Download the correct template for the P11D form from the HMRC website. 
• Report employee benefits in the provided categories. 

When filling out this form, watch out for issues with: 

• Determining taxable benefits: Navigating the rules on what qualifies as a benefit vs. an exempt item. 
• Accurately valuing benefits such as company cars and loans: Interpreting the specific valuation rules set by the HMRC can be complex without professional guidance. 
• Navigating employee categories: If your company employs a diverse range of employees with different contract types, it could be challenging to determine which benefits to report. 
• Changes in circumstances: If an employee’s situation changes during the tax year, this can complicate the reporting process. 
• Changes in legislation: Tax regulations often change, and keeping up with these changes can be arduous. Professional advice is highly recommended here. 

Completing the form manually can be tricky and time-consuming, so why bother when payroll software like Employment Hero is your ticket to hassle-free filing? 

P11D deadline and submission process

P11D deadlines

The deadline for P11D form submission is the 6th of July, following the end of the tax year. 

For example, for the tax year that runs from the 6th of April, 2024 to the 5th of April 2025, the form should be submitted by the 6th of July 2025. It is crucial that you submit before the deadline to avoid a late submission penalty. You should also provide employees with a copy of their form by this deadline. 

P11D submission process

So where should you begin when submitting your P11D? 

• Collect relevant data surrounding employee benefits received during the tax year. 
• Identify reportable benefits and expenses.
• Complete the form.
• Review the form.
• Submit the form by the deadline.
• Provide employees with a copy of their form.
• Maintain your records.
• Stay updated on any changes in legislation.

The submission process depends on the number of employees you have and whether you submit via PAYE or through your payroll software. HR professionals who choose to submit via payroll software like Employment Hero benefit from automation, improved accuracy, and time saved by having all of the data in one easy-to-manage place. 

Did we mention the compliance reminders? Yes. Really.

Common mistakes to avoid

We know that filling in forms can be time-consuming, so getting it right the first time is a must. To help you out, we’ve created a list of common mistakes when completing the form. 

We hope that by outlining these mistakes, we can help you not to make them:

• Inaccurate employee information: Incorrect data can put you in hot water with the HMRC. Take the time to ensure that all employee information is correct and accurate, including names, National Insurance numbers, and job titles.
• Omitting benefits: Be mindful not to overlook any benefits or expenses when inputting data. A common mistake is omitting benefits for terminated employees who no longer work for the company. 
• Missing deadlines: Submitting the form after the 6th of July can put you at risk of penalties. That’s an automatic charge of £100 for every 50 employees—and the more employee forms you file late, the higher the charge. 
• Compliance pitfalls: Failing to adhere to compliance measures such as accurate reporting, meeting deadlines, maintaining accurate records, or keeping up with HMRC regulation changes can lead to penalties. 

Watch our webinar on payroll compliance here. 

Penalties for delayed or incorrect P11Ds

Oops, you’ve submitted a P11D form late. Now what? If you submit the form late or with errors, several penalties may apply. Ouch.

Here are some of the potential consequences: 

• Late submission penalties: If you fail to submit the form by the deadline stated, you could incur a fee of £100 for each month it is late, for a maximum of 12 months. 
• Incorrect data penalties: If your form features incorrect information, the fee will depend on the severity of the error and whether it was with intent or down to negligence. 
• Additional tax liability: If the error in question leads to an underreporting of taxable benefits, it could mean that your employees could owe additional tax. If HMRC investigates, employers could be liable for further liabilities. 
• Interest charges: If it’s determined that additional tax is owed due to incorrect information, employers could have to pay additional interest on any unpaid amounts. 
• Compliance checks: Regularly submitting incorrect or late forms may trigger a compliance check from HMRC. 

P11D vs P11D(b): What’s the difference?

Sounds similar right? While both forms are used to report specific benefits and expenses, they serve different purposes. How does the P11D(b) differ? Think of it as a summary statement of all the benefits that you’ve provided as a company that year. 

You’ll need to submit a P11D(b) if: 

• You’ve submitted P11D forms.
• You’ve paid benefits or employee expenses via your payroll.
• You’ve had a reminder from HMRC.

You’ll need to submit a P11D form if: 

• You provide benefits in kind.
• You have employees who are director-level.
• You reimburse expenses.
• You operate a company car scheme.
• You have employees earning over the pay threshold.

Both forms are mandatory for employers in the UK, and a P11D(b) form is usually submitted alongside individual P11D forms for each employee. 

If you simply want to report specific benefits and expenses provided to individual employees that are not subject to PAYE tax—such as company cars and private medical expenses—you need the P11D form. However, if you want to report the total taxable benefits and expenses provided across all employees for the tax year, you need a P11D(b) form. 

How can businesses simplify the P11D process?

One of the simplest ways to streamline the P11D process is to invest in integrated HR and payroll software that includes advanced reporting features. You can automate data collection, benefit tracking, and report generation—minimising manual workload and human error. Not only does using software like this ensure you can keep detailed records of employee benefits as they occur, but you can also get peace of mind through expert support and insight.

How Employment Hero can help

If you arrived here asking ‘What is a P11D?’, we hope our jargon-free guide offered some clarity and helped you avoid any pesky pitfalls. 

When it comes to compliance, we’ve got you well and truly covered with all of the latest HMRC regulations. Whether you’re a first-timer or a P11D pro, our advanced software can help you get your ducks in a row. From storing all of the necessary employee data to keeping tabs on tax data, we have all of the tools you need to file with confidence. 

Employment Hero is the world’s first integrated Employment Operating System that can provide tools that automatically track and manage employee benefits and expenses throughout the year. Keeping you up to date on compliance, our software can be integrated with your accounting system to streamline your day-to-day processes. 

You can generate accurate reports making it easier to complete the form when it’s due. Our advanced software can keep you up to date with the latest HMRC regulations which will reduce stress and boost efficiency surrounding the P11D process. 

Book a demo to see how Employment Hero can help you with the P11D submission.