If you receive any taxable benefits from your employer — a company car, private medical insurance, gym membership, beneficial loans — then you’ll be familiar with the P11D. It’s the form your employer files with HMRC each year, summarising everything you’ve received on top of your salary that counts as a taxable benefit in kind.
his July is one of the last times the P11D will be filed in its traditional form. The 2025/26 and 2026/27 tax years are the final two years of annual P11D reporting for most benefits.
From 6 April 2027, all benefits in kind must be reported and taxed in real time through payroll, using what HMRC calls mandatory payrolling of benefits.
That matters to you — not just your employer — because the changeover creates a transition year in which some employees could end up being taxed twice on the same benefits.
Key Tax Deadlines
- 6 July 2026 — P11D and P11D(b) filing deadline for 2025/26. Your employer must give you a copy of your P11D by this date.
- 19 July 2026 — Class 1A National Insurance payment deadline if paying by cheque.
- 22 July 2026 — Class 1A National Insurance payment deadline if paying electronically.
- November 2026 — HMRC registration window for mandatory payrolling expected to open.
- 6 April 2027 — Mandatory payrolling of benefits begins. No more annual P11D reporting.
For employers, late filing carries a penalty of £100 per 50 employees for every month (or part of a month) the P11D(b) is overdue. Late payment of Class 1A NIC triggers a 5% surcharge after 30 days, with a further 5% after six months and another 5% after twelve months, plus interest.
What’s Changing — and Why
Under the current system, your employer adds up all your taxable benefits at the end of each tax year and reports the total to HMRC via the P11D. HMRC then uses that information to adjust your PAYE tax code for the following year — reducing your tax-free allowance by the cash equivalent of your benefits, so the tax is collected gradually through your salary.
The problem is that this system always runs a year behind.
You receive benefits in 2025/26, they’re reported in July 2026, and your tax code is adjusted for 2026/27 based on an assumption that you’ll receive the same benefits again. If your circumstances change — you swap your company car, your medical insurance premium changes, a benefit ends entirely — the tax code can be wrong for months.
From 6 April 2027, mandatory payrolling removes that lag. The taxable value of each benefit is added to your gross pay on each payslip, and tax is deducted in real time through PAYE, just like your salary. No more waiting, no more estimates, no more annual form.
HMRC originally planned to introduce mandatory payrolling from April 2026 but pushed the deadline back by a year to give employers more time to prepare.
Even after mandatory payrolling begins, the P11D isn’t disappearing entirely. Employers will still file a P11D each year for two specific benefits that sit outside mandatory payrolling: employment-related loans and living accommodation.
They’ll also continue to file a P11D(b) annually to declare their Class 1A National Insurance liability — charged at 15% of the value of reportable benefits for 2025/26.
The Double-Taxation Risk in 2027/28
This is the part that catches people out. In the transition year — 2027/28 — some employees could temporarily pay tax on their benefits twice: once through their tax code (which still contains an adjustment based on the old 2025/26 P11D) and once through payroll (where the benefit is now being taxed in real time).
In theory, HMRC should remove the P11D-based coding adjustment when payrolling starts. In practice, delays and errors happen. If HMRC doesn’t update your code promptly, you could face months of double deduction before it’s corrected.
Check your April 2027 tax code as soon as it’s issued. Look for any benefit-related adjustments that shouldn’t be there now that payrolling has taken over.
If your tax code still shows a reduction for company car benefit, medical insurance or any other benefit that’s now being taxed through your pay, contact HMRC immediately via the HMRC app or your Personal Tax Account.
How P11D Affects Your Tax Code
HMRC uses your P11D data to adjust your tax-free Personal Allowance. The cash equivalent value of your benefits is deducted from your allowance, which changes your PAYE code.
For example: if your Personal Allowance is £12,570 and your company car has a benefit in kind value of £3,180, HMRC reduces your allowance to £9,390 — giving you a tax code of 939L. That means £3,180 of your salary that was previously tax-free is now taxed, collecting the tax on the car benefit gradually across the year.
Problems arise when HMRC estimates a different benefit value from the actual P11D figure. A common scenario: you change company car mid-year, but HMRC still uses the old car’s value in your code.
Or prior-year underpayments and current-year estimated benefits are both coded in at the same time, causing your code to drop sharply — which is the most frequent cause of unexpected P11D-related tax bills.
What to Check on Your 2025/26 P11D
Since most benefits are about to move to real-time payrolling, this is your last clean look at a full P11D before the system changes — worth checking carefully.
Your employer normally gives you a copy by 6 July 2026. When you receive it, review the following:
- Company car: Correct CO₂ emissions, list price, fuel type, and dates available. If you started or stopped using the car mid-year, the benefit should be pro-rated. Check whether private fuel provision is accurately recorded.
- Private medical insurance: Correct premium value and correct employee listed.
- Beneficial loans: Correct amount outstanding and official rate of interest applied. The rate was set at 3.75% from 6 April 2025, though HMRC now reviews it quarterly. Only loans over £10,000 are typically reportable.
- Benefits that have ended: Any benefit you stopped receiving during 2025/26 should not appear for the full year.
- Benefits you never received: Check nothing has been incorrectly attributed to you.
- Cross-reference your tax code: Compare your P11D to your current tax code on the HMRC app or Personal Tax Account. If a benefit you no longer receive is still coded in, you may be overpaying.
If anything is wrong, raise it with your employer first — they’re responsible for correcting and resubmitting the form to HMRC. For a step-by-step walkthrough, see our guide on how to spot and fix P11D errors.
Taxable vs Exempt Benefits
Not everything your employer provides counts as a taxable benefit. Here’s what typically appears on a P11D and what doesn’t.
Reported on P11D (taxable)
- Company cars and vans (and private fuel)
- Private medical and dental insurance
- Gym memberships
- Beneficial loans (typically over £10,000)
- Living accommodation from employer
- Childcare above the exempt limit
- Non-approved professional subscriptions
- Relocation expenses above £8,000
Not on P11D (exempt)
- Employer pension contributions
- Canteen meals (available to all staff)
- Workplace parking
- One mobile phone and SIM card
- Trivial benefits under £50 per occasion (up to £300/year for directors)
- Cycle-to-work scheme bikes (during loan period)
- Staff party or event under £150 per head
- Eye tests, flu vaccinations, homeworking equipment (reimbursed — newly exempt from 6 April 2026)
Could You Be Owed a Refund?
If your P11D has been wrong in previous years and your tax code was adjusted incorrectly as a result, you may have been overpaying tax. Claims can be backdated up to four years, which currently covers 2022/23, 2023/24, 2024/25 and 2025/26.
Common overpayment scenarios include a benefit you stopped receiving that was still coded into your tax code, a company car change where the old car’s higher benefit value was used for too long, or medical insurance attributed to you that actually covered a different employee.
You can check your tax code history on the HMRC app or Personal Tax Account. If you spot a discrepancy, contact HMRC to have the benefit adjustment removed and claim back any overpaid tax.
The Timeline Ahead
- 6 July 2026 — P11D filing deadline for 2025/26. The 2026/27 P11D (due 6 July 2027) will be the last full one before mandatory payrolling begins. Your employer normally gives you a copy by 6 July 2026
- 19–22 July 2026 — Class 1A NIC payment deadline (cheque by 19th, electronic by 22nd).
- November 2026 — HMRC registration window for mandatory payrolling expected to open.
- 6 April 2027 — Mandatory payrolling begins for most benefits. P11Ds continue for employment-related loans and living accommodation only.
- April 2027 onwards — Check your tax code carefully for double-taxation. Old P11D adjustments should be removed.
What Happens Next
The shift to mandatory payrolling is ultimately a good thing for employees. Benefits will be taxed accurately in the month they’re received, reducing the risk of surprise tax bills and removing the year-long lag between receiving a benefit and paying tax on it. You’ll see the tax impact directly on your payslip, making it easier to understand what you’re paying and why.
But the transition itself requires attention. Check your 2025/26 P11D when it arrives. Compare it against your tax code. And in April 2027, watch your first payslip under the new system to make sure you’re not being taxed twice.
If you’ve been receiving benefits in kind for several years and have never checked your P11D against your tax code, now — while the traditional P11D system is winding down — is the time to check your P11D for errors.
Four years of potential overpayments are still within the claims window, but that window moves forward every April.
