P11D and Payrolling Benefits in Kind: What Employers Need to Know Before April 2027

A P11D reports the taxable expenses and benefits you gave an employee that weren’t taxed through payroll. The P11D(b) reports the Class 1A National Insurance (15%) you owe on them. Both are due by 6 July after the tax year ends. From 6 April 2027, company cars, fuel, vans and medical benefits must go through payroll instead.

This guide explains how P11Ds work now, what HMRC has confirmed about mandatory payrolling, and what to do before April 2027.

What are the P11D and P11D(b) forms?

When you give employees benefits in kind, such as a company car, private medical insurance or a low-interest loan, the value is usually taxable. There are two ways to report it.

• Through payroll (“payrolling”): the benefit’s cash equivalent is added to taxable pay each payday, so the employee pays the tax as they go.
• After the tax year, on forms: you report it to HMRC once the tax year is over.

The forms are:

• P11D: one for each employee who received taxable expenses or benefits that were not payrolled.
• P11D(b): one per employer. It reports the total Class 1A National Insurance you owe on all the expenses and benefits you provided, whether or not you payrolled them.

GOV.UK covers both in its guidance on reporting and paying for expenses and benefits.

When are P11D forms due?

These are the deadlines after the end of the tax year. For 2026/27, the tax year ends on 5 April 2027.

Task	Deadline
Submit P11D forms for non-payrolled expenses and benefits	6 July
Give each employee a copy of their P11D information	6 July
Submit the P11D(b) reporting Class 1A National Insurance	6 July
Pay Class 1A National Insurance	22 July (19 July if paying by cheque)
Pay tax and Class 1B National Insurance under a PAYE Settlement Agreement	22 October (19 October if paying by cheque)

How do you submit them?

P11D and P11D(b) forms are filed online, and only after the tax year has ended. Employers with fewer than 500 employees can use HMRC’s PAYE Online service. Employers with more than 500 must use payroll software. HMRC only accepts paper forms if you’ve stopped trading.

What if you miss the deadline?

GOV.UK says you’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late. Paying Class 1A late can also bring penalties and interest.

How much is Class 1A National Insurance on benefits?

HMRC’s rates and thresholds for 2026 to 2027 put the Class 1A rate on expenses and benefits at 15%. It follows the main employer Class 1 rate. Class 1B, paid under a PAYE Settlement Agreement, is also 15%.

Worked example

Say the taxable value of all the benefits you provided in 2026/27 adds up to £5,000. Your Class 1A bill is £5,000 × 15% = £750. You report it on the P11D(b) by 6 July 2027 and pay it by 22 July 2027.

The Employment Allowance is set against employer Class 1 contributions, so don’t count on it to cover Class 1A. Budget for it as a separate annual cost. Our employer National Insurance guide covers the Class 1 side.

What is payrolling benefits in kind, and can you do it voluntarily today?

Payrolling means adding the cash equivalent of a benefit to an employee’s taxable pay through the year, so tax is collected each payday instead of through a tax code adjustment later. Employees see the tax on their payslip. The P11D for those benefits disappears.

Under the current voluntary rules:

• Employers had to register with HMRC before the start of the tax year. GOV.UK’s payrolling guidance says the online service can only be used by employers who registered before 6 April 2026. You can no longer use it to register or cancel.
• Living accommodation and beneficial (interest-free or low-interest) loans can’t be payrolled under the current scheme.
• If all of an employee’s benefits are payrolled, no P11D is needed for them. You still file a P11D(b) and pay Class 1A once a year.

HMRC’s August 2026 Employer Bulletin says employers will be able to register for voluntary payrolling from November 2026. This covers all benefits not mandated from April 2027, including loans and accommodation.

What changes in April 2027?

HMRC published the policy paper Mandatory reporting of benefits in kind in Real Time Information (RTI) from April 2027 in July 2026 (updated 23 July 2026). Its official wording is: “The measure will have effect from 6 April 2027.” It adds that this “does not apply uniformly to all employers and benefit types.”

Mandatory payrolling is being phased in:

Phase	From	Benefits covered
Phase 1	6 April 2027	Company cars, car fuel, vans, van fuel and employer-provided medical benefits
Phase 2	April 2028	“Most remaining benefits in kind except for employer provided loans and accommodation”
To be confirmed	Later date	Employer-provided loans and living accommodation

For phase 1 benefits, employers will no longer be able to report them after the end of the tax year. HMRC’s August 2026 bulletin says “tax on phase 1 BiKs must be paid in real time in the year they are received”. Payroll software “will need to be in place by April 2027”. Employers will be required to calculate Class 1A National Insurance in real time as well.

There is some relief for the first year. HMRC plans a temporary easement from penalties for certain non-deliberate inaccuracies during the first year of mandatory payrolling. Deliberate errors aren’t covered.

HMRC said in the August 2026 bulletin that it expects final guidance for phase 1 in autumn 2026. Check GOV.UK for the latest version before you change your processes.

What does this mean for P11Ds?

For 2026/27, nothing changes. You still file P11Ds and the P11D(b) by 6 July 2027 for benefits you didn’t payroll. From 2027/28, company cars, fuel, vans and medical benefits move into payroll, and every other benefit stays on the year-end process until phase 2. Most employers with a mix of benefits will run both systems for at least one year.

What should employers do now?

1. List every benefit you provide. Note which employees get them and how the taxable value is worked out. Company cars and private medical cover are the priority, as they’re in phase 1.
2. Check your payroll software. Ask your provider when it will support mandatory payrolling and Class 1A in real time. HMRC expects this to be in place by April 2027.
3. Decide about other benefits. If you’d rather move everything at once, consider registering for voluntary payrolling of your remaining benefits once registration opens in November 2026.
4. Tell employees. Payrolled benefits change take-home pay and tax codes. A short note before April 2027 heads off payslip questions.
5. Keep the 2026/27 year-end on track. P11Ds and the P11D(b) for this year are still due by 6 July 2027. Class 1A payment is due by 22 July 2027.

Payrolling benefits also changes your monthly RTI submissions. Our guide to RTI submissions explains how the Full Payment Submission works.

Getting ready for payrolled benefits

April 2027 is a payroll change as much as a tax change. Benefit values, Class 1A and employee communications all move into the monthly cycle. Our payroll services team can review your benefits, set up payrolling for phase 1 and keep the 2026/27 P11D year-end on schedule. Contact us if you’d like to talk it through.