P11D guide

We’ve broken down the P11D into helpful sections, to help you correctly report your benefits. For an overall guide to the P11D, see HMRC’s How to complete P11D and P11D(b).

Before you begin

This guide is not exhaustive, and it does not cover every eventuality. If you need more detailed information, please refer to the HMRC website. Always consult a tax advisor if you have any doubts or queries.

Section A - Assets transferred

For HMRC guidance, see Expenses and benefits: assets bought, sold or given.

P11D Section A covers items purchased by employers, given to employees or sold at a discounted price. If the employee pays less than the item’s market value at the date of transfer, this is considered a benefit.

Estimating the market value of an asset is essential to determining whether a transaction was a benefit. To ensure accuracy, it’s advised to obtain at least 2 appraisals of the asset.

Common examples of assets that can be transferred include computers or bikes.

If it is a benefit, the amount subject to tax is either:

• The market value of the asset at the date of transfer minus any amount paid by the employee for the acquisition of the asset.
• The asset’s market value minus any sums already taken into account minus any amount paid by the employee for the acquisition of the asset.

Section B - Payments made on behalf of the employee

For HMRC guidance, see Expenses and benefits: personal bills.

P11D Section B covers personal bills the employer pays on behalf of the employee, such as a phone bill or gas and electricity bills.

The taxable value is reported on the P11D, but employers must also pay Class 1 NIC liability through the payroll when the payment is made. This is because the employer has settled the employee’s pecuniary liability, which means they paid a bill which was in the employee's name.

Note: If the bill is in the employer’s name, as opposed to the employee’s name, then to Class 1A National Insurance is due.

Section C - Vouchers and credit cards

For HMRC guidance, see Expenses and benefits: vouchers.

P11D Section C covers vouchers and credit cards that can be redeemed for goods and services.

Vouchers exchangeable for cash should be counted as earnings and added to the employee’s overall earnings through payroll.

Vouchers that are only exchangeable for goods or services should be entered into Section C. The cost of the vouchers should be included in the employee’s earnings when deducting Class 1 National Insurance (but not PAYE tax) through payroll.

There are key exceptions for some non-cash vouchers. To see a full list, see HMRC’s Non-cash vouchers: table of exceptions.

Section D - Accommodation

For HMRC guidance, see Expenses and benefits: accommodation.

P11D Section D covers the cost of accommodation, including council tax, furniture, repairs, maintenance, and decoration.

To calculate the value of the accommodation, take the annual value or rent paid (if you only provide the accommodation for part of the year, use that proportion), subtract any rent received from the employee. For a more detailed working sheet, see HMRC’s Living accommodation working sheet.

Properties valued over £75,000 are subject to an additional charge. To calculate this charge, add the cost of improvements to the accommodation to the value of the accommodation, then subtract any reimbursements by employees from these amounts. Then, deduct £75,000 from the cost of the accommodation, multiply the sum by the official rate of interest, and subtract any rent received from the employee.

Some accommodation is exempt from reporting, such as when accommodation is provided so the employee can perform their duties better. To see a list of exemptions, see HMRC’s Accommodation exemptions.

Section E - Business travel mileage

For HMRC guidance, see Expenses and benefits: business travel mileage for employees' own vehicles.

P11D Section E covers the cost of your employees using their own vehicles for business travel.

Note: Employees who own a company car are subject to different advisory rates.

HMRC has a specific mileage rate, Mileage Allowance Payments (MAPs), that employers can pay their employees before any tax benefit arises. This is known as the approved amount.

Any amount above the approved amount should be reported through a P11D. The amount above the approved amount should be added to the employee’s pay. Deduct and pay tax and National Insurance Contributions as normal.

However, if the payments to the employee is less than the approved amount, it does not have to be reported. In this case, the employee can claim tax relief on the difference between what they were paid and what they could have been paid.

To calculate this amount, multiply the total number of miles driven in a year by the rate per mile for their mode of transportation.

Tip: Companies can incentivize carpooling by offering their employees an additional 5p per mile allowance. This allowance is tax and National Insurance free.

Section F - Company cars and fuel 

For HMRC guidance, see Expenses and benefits: company cars and fuel.

P11D Section F covers company cars and fuel provided to employees.

Cars

To work out the value of a car easily, use HMRC’s Company car and fuel benefit calculator.

Note: Whenever a car is unavailable to an employee for 30 or more consecutive days, they should not be charged any benefit for those days.

To calculate the benefit value of a car, add the list price of the car to the cost of any accessories added when the car was first acquired to the replacement accessories costing at least £100. Then, subtract the capital contribution made by the employee (up to a maximum value of £5,000). Multiply this sum by HMRC’s appropriate percentage.

Note: You also need to account for any private use contributions made by the employee, as these contributions out of their net pay towards the private use of the vehicle will reduce the cash equivalent value. To learn more, see HMRC’s Payments for private use.

To learn more about qualifying accessories, see HMRC’s Qualifying accessories.

Note: If you provide a hybrid car, the approved CO2 emission figure should be available in the vehicle log book or from the company that leased the car. If you provide a fully electric car, enter 0 into the CO2 emissions field.

You can use an Optional Remuneration Arrangement (OpRA) to report the benefit and pay the requisite amount of tax. For more detailed information, see HMRC’s guidance on OpRA for cars.

• Type A OpRA - The employee gives up the right and future right to receive an amount of earnings (which would be chargeable for tax) in return for the benefit.
• Type B OpRA - The employee agrees to be provided with a benefit rather than an amount of earnings. If an employee receives a benefit rather than an amount of earnings, the higher amount (between the amount of earnings sacrificed or the value of the benefit) is taxed.

Fuel

To work out the value of fuel easily, use HMRC’s Company car and fuel benefit calculator.

Note: Whenever a car is unavailable to an employee for 30 or more consecutive days, they should not be charged any benefit for those days.

To calculate the fuel benefit value, multiply HMRC’s fuel charge for the tax year by the car’s appropriate percentage.

If an employee gives up their fuel card, the fuel benefit can be pro-rated. If they reinstate the fuel card, the benefit becomes applicable for the whole period the car was available.

Note: If an employee repays the total cost of their private mileage, there is no fuel benefit charge.

Section G - Vans and fuel

For HMRC guidance, see Expenses and benefits: company vans and fuel.

P11D Section G covers vans provided for employees for business use. If the van is used solely for business or is a pool van, then there is no benefit. However, if the van is also used for private journeys, there is a benefit.

HMRC determines a standard value for vans each tax year. This can be reduced if:

• Your employee can’t use the van for 30 days in a row.
• Your employee pays you to use the van privately.
• Other employees use the van (divide the standard value by the number of employees).
• Zero emissions vans have a value of 0%, or £0.

HMRC also determines a standard value for fuel each tax year. This can be reduced if:

• Your employee can’t use the van for 30 days in a row.
• Your employee pays you back for all their private fuel.
• You stopped providing fuel during the tax year.

Section H - Loans

For HMRC guidance, see Expenses and benefits: loans provided to employees.

P11D Section H covers employers who offer loans to employees or their families. Benefits arise if an employer lends an employee money and charges them interest at a rate lower than the official interest rate.

To calculate the benefit value, see HMRC’s Interest-free and low interest loans worksheet.

To see a list of exemptions, see HMRC’s What’s exempt.

Section I - Medical or dental treatment and insurance

For HMRC guidance, see Expenses and benefits: medial or dental treatment and insurance.

P11D Section I covers medical and dental treatment and insurance. To see a list of exemptions, see HMRC’s What’s exempt.

To report the benefit value for contracts between employers and providers, take the employee’s premium, or, if they are in a group policy, their share of the total premiums paid. Subtract any amount made good or any amount from which tax was deducted. Enter the resulting amount into a P11D.

To report the benefit value for employee arranged treatment or insurance, report the value of the treatment or insurance on a P11D. Then, when deducting and paying Class 1 National Insurance (but not PAYE tax) through payroll, add the value of the benefit to the employee’s earnings.

Section J - Relocation costs

For HMRC guidance, see Expenses and benefits: relocation costs.

P11D Section J covers any costs associated with an employee’s relocation. This can include buying or selling a home, moving, purchasing certain items for a new home, bridging loans, and other non-qualifying relocation expenses.

Qualifying relocation expenses up to £8,000 are not liable for tax or National Insurance payments. For more information, see HMRC’s What to report and pay.

Section K - Services supplied 

For HMRC guidance, see Services supplied.

P11D Section K covers the cost of any goods or services offered to employees for free or at a discount.

To calculate the benefit value, take the extra costs incurred by the employer in buying goods/providing services and subtract any amount made good by the employee.

Common exemptions include canteens, workplace nursery places, training, and car parking. These don’t need to be reported. For a complete list of exemptions, see HMRC’s Non-taxable payments and benefits.

Section M - Other items

For HMRC guidance, see Other items (including subscriptions and professional fees).

P11D Section M is a general section for items not entered elsewhere.

Common examples include professional subscriptions (including subscriptions to clubs for leisure or sporting activities), company fuel cards provided without a company car, non-exempt nursery places, educational assistance, and late non-qualifying relocation expenses.

Class 1A National Insurance is due if the contract is with the employer. Class 1 National Insurance id due if the contract is with the employee.

In the final box, employers should enter details of any income tax paid but not deducted from a director’s remuneration.

Section N - Expenses payments made on behalf of the employee 

For HMRC guidance, see Expenses payments made on behalf of the employee.

P11D Section N covers expenses payments made by employers on behalf of an employee. This includes traveling and subsistence, entertainment, home telephone payments, non-qualifying relocation expenses, and other expenses.