2025/26 Benefits in Kind and P11D reporting

What employers need to review before the July deadline 

Elizabeth Gillick, Head of Personal Tax 

We are fast approaching the deadline for the reporting to HMRC of Form P11D so this is a good time to review any benefits or expenses provided to employees and directors that may need to be reported to HM Revenue & Customs (“HMRC”).  

This can include items such as company cars and fuel, private medical insurance, beneficial loans, accommodation, reimbursed personal expenses, shares and securities, and other benefits that have not been taxed through payroll, which can be often overlooked.  

This can be quite a complex area so we have outlined the main deadlines and provide below our checklist of the areas that we recommend you review carefully and consider if any of the items listed have arisen during the year.   

If there are any areas where you are unsure of the correct tax treatment, where you believe a benefit may have been provided, or where you would like support with your P11D or P11D(b) reporting obligations, please do let us know. We would be very happy to discuss your specific circumstances and, where required, agree the scope of any assistance we can provide.  Please contact our specialist Tax team in Manchester by calling 0161 608 0000 or email info@rpg.co.uk 

Key deadlines for 2025/26 

For the 2025/26 tax year: 

• 6 July 2026 – deadline to submit forms P11D and P11D(b) to HMRC 

• 6 July 2026 – deadline to provide employees with details of the benefits reported for them 

• 19 July 2026 – deadline to pay Class 1A National Insurance if paying by cheque 

• 22 July 2026 – deadline to pay Class 1A National Insurance if paying electronically 

Please be aware that the Class 1A National Insurance rate for 2025/26 is 15%.  

Late filing of a P11D(b) can trigger a penalty of £100 per 50 employees for each month or part month that the return is late, with interest and further penalties potentially arising where Class 1A National Insurance is paid late. 

P11D – Definitions 

P11D(b) – employer’s year-end declaration of the total benefits liable to Class 1A National Insurance (“NIC”).  If issued by HMRC it is still required to be submitted even if no benefits in kind or expenses have been paid.   

P11D – provided to an employee or director detailing benefits or expenses that have not been payrolled.  

Payrolling benefits: what to keep in mind 

Many employers now choose to payroll certain benefits, which means the employee pays the income tax through PAYE during the year rather than through a later tax code adjustment. 

If you registered to payroll benefits before the start of the tax year, you generally do not need to submit a P11D for those particular benefits. However, you still need to file a P11D(b) to report the total Class 1A NIC.  

At present, not all benefits can be payrolled. In particular, beneficial loans and employer-provided living accommodation still need separate year-end reporting.  

Looking ahead, the rules are changing: from April 2027, most benefits in kind are due to move to mandatory payrolling, although loans and accommodation are expected to remain outside the mandatory regime initially. This date is still subject to change by HMRC. 

Common areas to review for P11D purposes 

Below are some of the benefits and expenses that most commonly need attention at year end. 

1. Assets transferred to employees

If the business has transferred an asset to an employee or director — for example, a car, computer, equipment, or other goods — the transfer may give rise to a taxable benefit. 

Information to consider includes: 

• a description of the asset 

• its market value at the date of transfer 

• any amount paid by the employee 

• details of any amount already taxed previously as a benefit 

2. Payments made on behalf of employees

If the business has paid a personal liability of an employee or director, this is often taxable. 

Examples might include: 

• personal bills settled by the company 

• professional fees paid on someone’s behalf 

• personal tax or legal costs met by the employer 

These items can create either a payroll issue or a reportable benefit depending on the circumstances. 

3. Vouchers and credit cards

Vouchers, credit tokens, or employer-paid personal card costs may need to be reported, depending on the type of item and how it has been used. 

Details to be considered include: 

• the type of voucher or card provided 

• the cost to the business 

• whether it could be exchanged for money, goods, or services 

4. Living accommodation

Employer-provided living accommodation remains one of the more complex benefit areas. 

If accommodation has been provided to an employee, director, or a member of their family or household because of the employment, a taxable benefit may arise unless a specific exemption applies. 

As the calculation can be complex, please let us know if you would like support in this area.  

5. Mileage payments

Mileage allowances can be paid tax-free only up to the approved rates for qualifying business travel. 

For 2025/26, the usual approved mileage rates remain: 

• Cars and vans: 45p per mile for the first 10,000 business miles, then 25p 

• Motorcycles: 24p per mile 

• Bicycles: 20p per mile 

• Passenger payments: an additional 5p per business mile where relevant 

If mileage has been reimbursed above these levels, or paid for non-qualifying travel, there may be a reporting requirement. 

6. Company cars and fuel

Company cars remain one of the most common reportable benefits. 

The following information is required for each employee or director with a company car: 

• make and model 

• date first registered 

• CO2 emissions 

• fuel type or power source 

• battery range for hybrids where relevant 

• dates the car was available 

• list price 

• accessories fitted 

• any employee contributions 

• any payments for private use 

If private fuel was provided, a fuel benefit charge may also arise unless the employee fully reimbursed the cost of all private fuel by the relevant deadline. 

7. Vans and van fuel

If a van has been made available for private use, a van benefit charge may apply. The same applies where private fuel has been provided for a van. 

It is important for you to identify whether any vans were available for private use during the year. 

8. Beneficial loans

Loans to employees or directors can create a benefit where no interest is charged, or where interest is charged below HMRC’s official rate. 

For 2025/26, the average official rate is 3.75%.  

In broad terms, no taxable benefit arises if the total outstanding balance on all such loans does not exceed £10,000 at any point in the tax year. Where the balance exceeds that threshold, the position should be reviewed carefully. 

This often becomes relevant for overdrawn director’s loan accounts, so you need to consider if there were any balances of that kind during the year. 

9. Private medical insurance or treatment

Private medical or dental costs arranged and paid by the employer are commonly reportable benefits. 

You need to consider: 

• insurance premiums paid 

• medical or dental treatment funded by the business 

• any employee contributions made 

10. Relocation expenses

Certain qualifying relocation costs can be exempt up to £8,000, with any excess potentially taxable. 

If any relocation costs have been paid or reimbursed, they should be reviewed to check whether they qualify and whether any excess needs to be reported. It is worth noting that relocation costs over £8,000 may, in some circumstances, fall within a PSA if appropriate.  

11. Services supplied

If in-house services have been supplied to employees either free of charge or at a discount, there may be a taxable benefit depending on the circumstances.   This can include both physical and digital services. 

12. Assets made available for private use

If the business owns an asset that an employee or director has been allowed to use personally — without actually transferring ownership — this may also create a benefit.  Examples can include equipment, furniture, or other items provided for private use. 

13. Professional fees, subscriptions and other personal costs 

Employer-paid personal expenses are often overlooked. 

This can include: 

• accountancy or personal tax fees 

• legal fees 

• club subscriptions 

• other personal costs paid or reimbursed by the business 

The correct treatment depends on the nature of the expense and whether a statutory exemption applies.  

14. Other expenses reimbursed to employees

Many ordinary business expenses are exempt and do not need to be reported, but not all reimbursed costs fall within the available exemptions.  Areas worth reviewing include: 

• home-to-work travel 

• non-business subsistence 

• general allowances 

• non-qualifying relocation costs 

• home phone costs where the contract is in the employee’s name 

• client entertainment reimbursed personally to staff 

• any other non-exempt reimbursed expense 

If you are unsure whether something is exempt, it is usually better to have this checked to confirm the correct treatment. 

Useful supporting information 

When reviewing your 2025/26 position, it is important to consider the details of any benefits or expenses provided to employees or directors that were not fully taxed through payroll.  If you would like RPG to review your position, after agreeing the scope of work and fee, we would need to see the information relating to: 

• company cars, vans, and fuel 

• medical insurance or treatment 

• loans to employees or directors 

• accommodation 

• vouchers and credit cards 

• asset transfers 

• reimbursed personal expenses 

• shares or securities issued to staff 

• relocation costs 

• professional fees or subscriptions paid by the business 

• any other items you are unsure about 

If you already keep a benefits schedule internally, that is usually a good place to start. 

How we can help 

If you would like us to review your 2025/26 benefits and expenses position, please let us know and we would be very happy to discuss your specific circumstances and agree the scope of any assistance we can provide.  Please contact RPG’s specialist Tax team in Manchester by calling 0161 608 0000 or email info@rpg.co.uk 

Please do not rely on this document alone and seek advice to take into account your own personal circumstances.  Published June 2026