What is a P11D?

What's on a P11D

The P11D lists every reportable benefit in kind with its "cash equivalent" — HMRC's value for tax purposes. Common entries:

• Company car — list price × CO₂ rate band
• Company fuel for private use
• Private medical insurance — premium paid
• Interest-free or low-interest loans above £10,000
• Living accommodation
• Vouchers and credit-card payments
• Mileage allowance over HMRC approved rates
• Relocation expenses over £8,000

Some benefits are exempt and won't appear on a P11D — one mobile phone, Cycle to Work bicycles, workplace nurseries, employer pension contributions, trivial benefits under £50.

P11D timeline

So there's a lag: BIKs received in 2025/26 (April 2025 — April 2026) appear on a P11D by July 2026, and the tax is recovered through your code in 2026/27.

P11D vs payrolling benefits

Since April 2016, employers can choose to payroll benefits instead of issuing P11Ds. The differences:

From 6 April 2026, payrolling becomes mandatory for most BIKs (announced in 2023, implementation date confirmed). The exceptions are interest-free loans and accommodation, which continue on P11D for now. So this is the last year P11Ds will be widely issued for most benefit types.

What to check on your P11D

1. Is everything correct? Check the cash equivalent figures against your contract / scheme paperwork. Common errors: wrong company car list price, wrong CO₂ band, private fuel benefit included when you only have business fuel.
2. Is everything listed? If a benefit is missing (e.g. private medical you know your employer pays), you still owe tax on it. Better to flag it now than have HMRC come back later.
3. Keep the P11D safe. Mortgage applications, tax investigations and Self Assessment all reference it.
4. Check the corresponding tax code change via the Personal Tax Account or P2 coding notice that follows.

Sources and methodology

P11D rules and reporting deadlines from gov.uk/employer-reporting-expenses-benefits. Mandatory payrolling announcement from gov.uk Agent Update 114. Class 1A NI from gov.uk/national-insurance-rates-letters.

UK Tax Drag is not authorised by the Financial Conduct Authority and does not provide regulated financial advice — see the content disclaimer for the full position. The methodology page documents how every calculator is built and reviewed.

Related

• What is a benefit in kind? — the underlying tax concept
• P60 vs P45 vs P11D — all three payroll documents distinguished
• Company car BIK calculator — precise BIK value for any car
• P60 mistakes that cost you money — related checks on other payroll forms
• Full UK money glossary
• FAQ library

How a benefit in kind changes your tax code and take-home pay

A P11D does not generate a separate bill. Instead, HMRC takes the total cash equivalent of your benefits and treats it as extra income you have already received without paying tax on it. It recovers that tax by reducing your tax-free Personal Allowance, which lowers the number in your PAYE tax code. With the standard 2026/27 code of 1257L you get £12,570 tax-free; a £3,000 benefit drops your code to roughly 957L (£9,570 tax-free), so more of your salary is taxed each month.

The key point is that you do not pay tax on the cash value of the benefit at 100% — you pay your marginal rate on it. A £3,000 medical-insurance benefit costs a basic-rate taxpayer £600 in tax over the year (£50 a month), and a higher-rate taxpayer £1,200 (£100 a month). You never see this on a payslip as a deduction labelled "P11D"; it simply appears as slightly higher tax against a lower code number.

Worked example: a company car and your monthly pay

Suppose you are a higher-rate taxpayer (salary £60,000) and your employer gives you a petrol company car with a list ("P11D") price of £32,000 that falls in a 30% appropriate-percentage band. The cash equivalent — the figure that lands on your P11D — is the list price multiplied by that percentage.

The appropriate percentage is set by the car's CO₂ emissions and is capped at 37%; the exact band changes each tax year, so always confirm the current figure for your car. Choosing a fully electric car instead transforms the maths: EVs sit on a very low percentage (single digits, rising by one percentage point a year), so a £40,000 electric car might create a cash equivalent of only around £1,600 and cost a higher-rate driver roughly £640 a year — a fraction of the petrol equivalent. This is why salary-sacrifice EV schemes have become so popular.

P11D vs P11D(b) vs payrolled benefits: who pays what

Three closely related things often get muddled. They split cleanly once you see who the tax falls on:

• P11D — reports the benefit for each employee. It drives your income tax, collected through your tax code (or via Self Assessment if you file one).
• P11D(b) — a single return your employer files summarising all benefits across the workforce. It declares the Class 1A National Insurance the employer owes — 15% for 2026/27 — on the total taxable benefits. This is an employer cost; it never reduces your pay.
• Payrolled benefits — where the cash equivalent is added to your taxable pay in real time each period, so the income tax is collected as you go and no P11D is issued to you. The employer still files a P11D(b) and pays Class 1A.

So a benefit in kind is taxed twice over, in a sense: you pay income tax on it, and your employer separately pays Class 1A NI on it. Crucially, employees pay no employee National Insurance on most benefits in kind — one of the few quirks that makes some benefits modestly more efficient than equivalent salary.

What to do if your P11D is wrong

Mistakes are common — a fuel benefit included when you only had business fuel, the wrong car list price, or private medical cover valued at last year's premium. Because the figures flow straight into your tax code, an error means you are taxed on the wrong amount. Fix it in order:

1. Go to your employer (or their payroll/HR provider) first. They produced the figure and can issue a corrected P11D and an amended P11D(b) to HMRC. This is almost always the fastest route.
2. If the employer will not or cannot correct it, contact HMRC directly through your Personal Tax Account or the income-tax helpline, with evidence of the right figure (your contract, scheme statement, or the car's documentation).
3. Do not simply enter different numbers on your Self Assessment return. A mismatch between what your employer reported and what you declared is a classic trigger for an HMRC query, and you will have to explain the difference anyway.
4. Check the corrected tax code lands. After any change, HMRC issues a new P2 coding notice; confirm the new code number reflects the right benefit value so you are neither over- nor under-taxed through the year.