Employers providing employees with expenses or benefits in kind must comply with specific reporting, filing, and payment obligations each tax year. These requirements are designed to ensure that benefits are correctly reported, and that the appropriate tax and National Insurance contributions are accounted for.
For the 2025–26 tax year, employers must report employee expenses and benefits to HMRC and provide employees with copies of the relevant information by 6 July 2026. By the same deadline, employers must also submit form P11D(b) and declare the total Class 1A National Insurance contributions due unless all benefits have been payrolled.
Payment of Class 1A National Insurance is required by 22 July 2026 (or 19 July if paying by cheque). Where an employer operates a PAYE Settlement Agreement, any tax and Class 1B National Insurance must be paid by 22 October 2026 (or 19 October if paying by cheque). Employers who choose to payroll benefits must account for tax and Class 1 National Insurance through the monthly payroll process during the year.
Employers are required to maintain adequate records to support the reporting of all expenses and benefits, including valuation calculations and supporting documentation. Certain exemptions and dispensations may apply in limited circumstances, reducing reporting requirements.
Late submission of form P11D(b) attracts penalties of £100 per 50 employees for each month or part month of delay. Additional penalties and interest may also arise where payments to HMRC are made late.
