Expenses and benefits: credit, debit and charge cards

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1. Overview

As an employer covering the cost of credit, debit or charge card payments made by your employees, you have certain National Insurance and reporting obligations.

What’s included

What you have to pay and how you report this depends on how the card is used and what the employee purchases with it.

Different rules apply when buying certain items with a card, eg fuel for a company car, parking spaces or incidental overnight expenses.

2. What's exempt

You don’t have to report or pay anything to HM Revenue and Customs (HMRC) if all the following apply:

  • you’ve authorised your employee to make the purchase
  • your employee makes it clear during the purchase that they’re acting on behalf of your business
  • the supplier accepts that the purchase is on behalf of your business
  • your employee isn’t making a purchase where different rules apply (eg fuel for a company car, parking spaces or incidental overnight expenses)

Salary sacrifice arrangement

You do have to report the charges if they are part of a salary sacrifice arrangement.

3. What to report and pay

If card charges aren’t exempt, you must report them to HM Revenue and Customs (HMRC) and may have to deduct and pay National Insurance on them.

This depends on how the credit or debit card is used, whether it’s clearly used on the employer’s behalf and what the employee purchases with it.

‘Used on the employer’s behalf’ means that the employee makes it clear to the supplier that they are making the purchase for your business, and the supplier accepts this.

The card is used on the employer’s behalf but without permission

You must:

The card is used for business purchases but not clearly on behalf of the employer

You must report it on form P11D. You don’t have to deduct or pay any tax or National Insurance.

The card is used for private purchases but not clearly on behalf of the employer

You must:

Salary sacrifice arrangements

If the charges are less than the amount of salary given up, report the salary amount instead.

These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.

4. Technical guidance

The following guides contain more detailed information: