If your business provides benefits or expenses to employees or directors, you may need to report these to HMRC using forms P11D and P11D(b).
This is especially important for small companies where directors may have company cars, private fuel, medical insurance, gym memberships, personal expenses paid by the company, or other benefits provided through the business.
The deadline for reporting benefits and expenses for the 2025/26 tax year is 6 July 2026. This applies to benefits provided between 6 April 2025 and 5 April 2026.
What is a P11D?
A P11D is used to report certain taxable benefits and expenses provided to employees or directors.
These are items that may have a personal benefit, even if they were paid for by the company. The employee or director may then pay tax on the value of the benefit.
A P11D may be needed even where no cash has been paid directly to the employee. For example, if the company provides private medical insurance, a company car, or pays for personal costs, this can still be treated as a taxable benefit.
What is a P11D(b)?
A P11D(b) is the employer’s declaration to HMRC. It tells HMRC how much Class 1A National Insurance the employer owes on the taxable benefits provided.
In simple terms:
| Form | What it does |
|---|---|
| P11D | Reports the taxable benefit for the employee or director |
| P11D(b) | Reports the employer’s Class 1A National Insurance due |
The P11D affects the employee or director’s personal tax position. The P11D(b) affects the employer’s National Insurance liability.
Common benefits that may need reporting
The following are common examples of benefits that may need to be reported:
- Company cars
- Company vans with private use
- Private fuel
- Medical insurance
- Gym memberships
- Living accommodation
- Beneficial loans
- Assets made available for private use
- Personal bills paid by the company
- Non-business travel
- Non-business subsistence
- Director personal expenses paid through the company
- Certain entertainment or gifts
- Expenses reimbursed to employees that are not fully business-related
Not every expense automatically creates a P11D issue. Genuine business expenses are normally treated differently. However, the key question is whether the employee or director has received a personal benefit.
Key P11D deadlines for 2026
For the 2025/26 tax year, the main deadlines are:
| Requirement | Deadline |
|---|---|
| Submit P11D forms to HMRC | 6 July 2026 |
| Submit P11D(b) to HMRC | 6 July 2026 |
| Give employees details of their benefits | 6 July 2026 |
| Pay Class 1A National Insurance electronically | 22 July 2026 |
| Pay Class 1A National Insurance by cheque | 19 July 2026 |
Missing these deadlines can lead to penalties and interest, so it is worth reviewing benefits early.
Directors should be especially careful
P11D issues are common in small limited companies because the line between business and personal costs can sometimes become blurred.
Examples include:
- A director using a company car privately
- The company paying for private medical insurance
- The company paying for a personal subscription or membership
- The company paying personal travel or accommodation costs
- A director using company assets personally
- A director loan account being used incorrectly
If a company pays for something personally beneficial to a director, it may need to be reported as a benefit, processed through payroll, or posted to the director’s loan account. The correct treatment depends on the facts.
Company cars and fuel
Company cars are one of the most common P11D areas.
If an employee or director has private use of a company car, there is usually a taxable benefit. The value depends on factors such as:
- The car’s list price
- CO₂ emissions
- Fuel type
- Availability during the tax year
- Any employee contribution
- Whether private fuel is also provided
Private fuel can create a particularly high benefit charge, so businesses should review whether providing fuel for private use is worthwhile.
Gym memberships and salary sacrifice
Gym memberships can also create tax issues.
If the company pays for an employee’s gym membership and the employee receives personal use, this is usually a taxable benefit unless a specific exemption applies.
Salary sacrifice does not automatically make something tax-free. In many cases, where an employee gives up salary in exchange for a benefit, tax and National Insurance rules still need to be considered carefully.
This is why salary sacrifice arrangements should be reviewed before they are introduced.
What records should employers keep?
Employers should keep clear records of benefits and expenses throughout the year.
Useful records include:
- Invoices
- Receipts
- Employment contracts or benefit agreements
- Mileage records
- Company car details
- Fuel records
- Employee contributions
- Details of any private use
- Director loan account records
- Payroll records
Good records make the P11D process much easier and reduce the risk of incorrect reporting.
What if a benefit has already been payrolled?
Some employers already tax benefits through payroll.
If a benefit has been correctly payrolled, the employee usually does not need a P11D for that benefit. However, the employer may still need to submit a P11D(b) to report Class 1A National Insurance.
This is an area where employers should be careful, as the reporting depends on how the benefit has been processed.
Changes from April 2027
The P11D process is changing.
From April 2027, most benefits in kind and taxable expenses will need to be reported through payroll in real time, using the same general payroll reporting process employers already use for wages and salaries.
This means employers should start reviewing their benefits now, especially if they provide company cars, medical insurance, gym memberships, or director benefits.
Although the current P11D process still applies for 2025/26, businesses should prepare for the move to real-time reporting.
Practical checklist for employers
Before the P11D deadline, employers should ask:
- Did we provide any company cars or vans?
- Was private fuel provided?
- Did we pay for medical insurance?
- Did we pay for gym memberships or personal subscriptions?
- Did we reimburse any personal costs?
- Did directors have personal expenses paid by the company?
- Were any assets used personally?
- Were any beneficial loans provided?
- Have all director loan account entries been reviewed?
- Have any benefits already been taxed through payroll?
- Do employees need copies of their benefit information?
Final thoughts
P11D reporting is easy to overlook, especially in small companies where benefits are informal or paid directly by the business.
However, HMRC expects employers to report taxable benefits correctly and pay any Class 1A National Insurance due on time.
If you are unsure whether something should be reported, it is better to review it before the deadline rather than waiting for HMRC to raise questions later.
At GMS Business Accountants, we can help review your benefits, expenses, director costs, payroll records, and P11D reporting requirements.
If you need help with P11Ds or benefits in kind, please get in touch.
