P11Ds for the 2025–26 Tax Year: What Employers Need to Know

For many employers, P11Ds remain one of the most confusing parts of year‑end payroll. With HMRC tightening digital requirements and the upcoming shift toward mandatory payrolling of benefits, the 2025–26 tax year is an important one to get right.

This guide breaks down what P11Ds are, what’s changed for 2025–26, and how to stay compliant without the stress.

What Is a P11D?

A P11D is the form employers must submit to HMRC to report taxable benefits and expenses provided to employees and directors. These include things like:

• Company cars and fuel

• Private medical insurance

• Interest‑free or low‑interest loans

• Living accommodation

• Gym memberships

• Assets or services provided for personal use

You must complete a separate P11D for each employee or director receiving taxable benefits. Even if you payroll all benefits, you must still file a P11D(b) to declare and pay Class 1A National Insurance.

Key Deadlines for 2025–26

• 6 July 2026 Deadline to file P11D and P11D(b) forms

• 22 July 2026 Deadline to pay Class 1A NIC (19 July if paying by post)

Missing these deadlines triggers automatic penalties of £100 per 50 employees per month for late P11D(b) submissions.

What Needs to Be Reported?

You must report any taxable benefits, expenses, or facilities provided to employees or their household members. HMRC defines “household” broadly including spouses, civil partners, children, parents, dependants, and even guests.

Common reportable benefits include:

• Company cars and vans

• Private medical insurance

• Beneficial loans

• Assets transferred or made available

• Non‑exempt relocation expenses

• Subscriptions not on HMRC’s approved list

You do not need to complete a P11D if:

• There are no taxable benefits

• All benefits have been fully payrolled

• Benefits are covered by a PAYE Settlement Agreement (PSA)

What’s New for the 2025–26 Tax Year?

1. Updated HMRC Guidance

HMRC updated its P11D guidance on 6 April 2026, confirming digital‑only submissions except for employers who are digitally exempt or have ceased trading.

2. Class 1A NIC Rate

Class 1A NIC remains chargeable on the cash equivalent of benefits and is payable by 22 July 2026. The rate for 2025–26 is 15%.

3. Mandatory Payrolling Coming Soon

HMRC has confirmed that payrolling benefits will become mandatory from April 2027, making 2025–26 one of the final years where traditional P11Ds remain the norm.

Common Exemptions (Still Not Reportable in 2025–26)

Some benefits remain exempt if conditions are met:

• Employer pension contributions

• Workplace parking

• Approved childcare (legacy schemes)

• Welfare counselling

• Staff canteen facilities

• Removal expenses within HMRC limits

• One mobile phone per employee

Digital Submission Requirements

HMRC no longer accepts paper P11Ds unless the employer is digitally exempt or has stopped trading. All other employers must submit via:

• PAYE Online

• Recognised commercial payroll software 

This aligns with HMRC’s wider digital‑first approach.

Practical Tips for Employers in 2025–26

1. Audit Your Benefits Early

List every taxable benefit you provide this prevents last‑minute errors and missed items.

2. Consider Payrolling Benefits

Payrolling reduces admin and prevents tax code delays for employees.

3. Keep Accurate Records

HMRC expects clear evidence for valuations, especially for cars, loans, and assets.

4. Communicate With Employees

Provide P11D copies by 6 July and explain how benefits affect their tax codes.

5. Prepare for Mandatory Payrolling in 2027

Start planning now especially if you offer multiple or complex benefits.

How Cloud Payroll Solution Helps

At Cloud Payroll Solution, we manage the entire P11D process for you:

• Identifying taxable benefits

• Calculating cash equivalents

• Preparing and submitting P11D and P11D(b) forms

• Calculating Class 1A NIC

• Advising on payrolling benefits ahead of 2027

You get accurate, compliant reporting without the stress.