How Should I Report Employee Benefits to HMRC?

Q: I’m going to be introducing benefits to employees of my business for the first time, including gym membership and private medical insurance.  I believe I need to be arranging the reporting of these benefits to HMRC? What’s the best way to go about this?

A:Firstly, you’re right. As with other types of taxable income and benefit, they have an associated monetary value, and do need to be reported to HMRC. You may have heard of a P11D form? If not, what that is a means to report ‘benefits in kind‘ – the type of benefits for staff that you’re talking about.

You need to submit a P11D for all staff and directors who get benefits – whether these are the ones you’ve outlined or anything else.

Any items that your business pays for which the staff member gains benefit from must be included on the P11D. So, think also about phones, company cars, loans for rail season tickets, and so forth. Some expenses are not required to be included in these forms. That’s things like business travel and entertainment expenses or credit cards used for company purposes.

In terms of filing a P11D they must be submitted to the tax man by July 6 after the tax year in question. They only accept digital filing these days. It’s all online.

The alternative to the P11D is paying benefits via payroll. You must register with HMRC if you want to do this, but it could save time, depending on how many staff you have (and therefore how many P11D forms you need to fill out). And in actual fact, changes are afoot that mean in future (from April 2026) the P11D will be scrapped, and it will become mandatory to report employment benefits and pay Class 1A National Insurance Contributions (NIC) through payroll software.

So, you might consider whether it’s best to be prepared for this compliance change now, rather than wait.

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