P11D, P11D(b) and Class 1A National Insurance

The figures and dates

Class 1A rate for 2026-27

15% (GOV.UK: rates and thresholds)

P11D and P11D(b) deadline

6 July after the tax year (GOV.UK: deadlines)

Copies to employees

By 6 July (GOV.UK)

Class 1A payment

Received by 22 July, or 19 July by cheque (GOV.UK)

Late P11D(b)

£100 per 50 employees for each month or part month (GOV.UK)

What is reported

HMRC's reporting guidance says to complete a P11D for each employee given taxable expenses or benefits that were not payrolled. The P11D(b) reports the employer's total Class 1A.

HMRC's Class 1A guide (CWG5) says Class 1A applies to most benefits provided to employees, including company cars and fuel, private medical insurance, living accommodation and assets transferred to employees. It does not apply to benefits exempt from income tax, amounts already liable to Class 1, items provided for business use with no significant private use, items in a PAYE Settlement Agreement, and trivial benefits.

Employers with fewer than 500 employees file P11Ds and the P11D(b) through HMRC's PAYE Online service or payroll software that has the feature. Paper forms are accepted only if the business has stopped trading (GOV.UK).

Working out Class 1A

CWG5 sets the Class 1A rate at the employer's Class 1 rate for the year, applied to the cash equivalent of the benefit. The cash equivalents for all employees are added together and the rate applied once.

For example, a company provides two directors with private medical insurance costing £1,200 each and one employee with a company car whose cash equivalent is £6,600. The total is £9,000, and Class 1A at 15% is £1,350, reported on the P11D(b) by 6 July and paid by 22 July.

Class 1A on termination awards over £30,000 and on sporting testimonials is different. It is reported and paid through real time reporting, and not on the P11D(b) (CWG5; GOV.UK: pay Class 1A).

Payrolling benefits in 2026-27

HMRC's payrolling guidance lets an employer tax benefits through payroll each pay period. No P11D is needed for benefits that are payrolled, but the employer still works out the Class 1A and files the P11D(b). Living accommodation and interest-free or low-interest loans cannot be payrolled. The tax taken for payrolled benefits cannot exceed the overriding limit of 50% of the employee's pay, and employees must be told what was payrolled by 1 June after the tax year.

HMRC's payrolling online service no longer takes new registrations. Only employers who registered before 6 April 2026 can payroll benefits for 2026-27.

Mandatory payrolling from April 2027

HMRC's policy paper on reporting benefits in kind, updated on 23 July 2026, says payrolling becomes mandatory in two phases. From April 2027 it covers medical benefit, company cars, vans, and car and van fuel. From April 2028 it covers most remaining benefits in kind, except employer-provided loans and accommodation. Class 1A on payrolled benefits will be worked out and paid in real time through payroll.

HMRC's draft interim guidance, updated on 23 September 2026, says phase 1 starts on 6 April 2027 and phase 2 on 6 April 2028. Primary legislation is being introduced, with secondary legislation to follow. The policy paper also proposes that penalties are not charged for non-deliberate inaccuracies for one year, covering 2027-28.

For 2026-27 the existing P11D and P11D(b) process still applies to benefits that are not payrolled.

Questions