Expenses and benefits at the end of the tax year

If you've provided your employees with expenses or benefits, you need to report these to HM Revenue & Customs (HMRC) by 6 July after the end of the tax year. In July you also need to pay any Class 1A National Insurance contributions (NICs) that are due on the expenses or benefits. A separate payment is due in October if you've agreed a PAYE Settlement Agreement with HMRC.

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Expenses and benefits forms to complete

At the end of the tax year, you must tell HMRC about the expenses and benefits you've provided to your employees, and about the total Class 1A NICs due on them.

To do this, use the following forms:

  • P11D - for recording the expenses and benefits you provided to most company directors and to employees earning at a rate of £8,500 or more per year.
  • P9D - for employees earning less than the £8,500 rate.
  • P11D(b) - for reporting the total amount of Class 1A NICs due. You add this up from all the forms P11D you've completed. Even if you haven't had to file any forms P11D, you must still complete and return form P11D(b) if HMRC has sent one to you.

Submitting forms P11D and P9D isn't optional. If you've provided an employee with expenses or benefits that need to be reported, then you must send HMRC the appropriate form for the employee.

For details of which expenses and benefits need to be recorded on forms P11D and P9D, use the 'Expenses and benefits A to Z' - follow the link below.

Expenses and benefits form filling - find out more

Go to the 'Expenses and benefits A to Z'

Deadlines and filing methods

Forms P11D, P9D and P11D(b) must all reach HMRC by 6 July after the end of the tax year. You may be charged a penalty if they're late.

There are a number of ways of submitting the forms to HMRC.

You can:

  • complete paper versions
  • use interactive versions which are part of HMRC's Basic PAYE Tools package
  • file the forms online to HMRC - you can use commercial payroll software (some of which is free) or the free 'Online Return and Forms - PAYE' service on HMRC's website

How do I get HMRC's Basic PAYE Tools?

A set of Basic PAYE Tools are now available to download straight to your computer. In addition to End of year forms, the tools include:

  • an employer database on which you can record your employees' details
  • a P11 calculator that will work out and record your employees' tax, NIC and Student Loan deductions every pay day with a linked P32 Employment Payment record that works out what you need to pay HMRC
  • a range of other calculators that work out, for example, statutory payments
  • a Learning Zone - including interactive material on how to use the Basic PAYE Tools

HMRC recommends that you file your forms online - it's quick, secure and it reduces the likelihood of you forms containing errors.

Download Basic PAYE Tools (Opens new window) from the Business Link website

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Paying HMRC at the end of the tax year

There are two types of payment related to expenses and benefits that you may have to make after the end of the tax year.

Class 1A NICs

You must pay Class 1A NICs on many of the expenses and benefits that you report using form P11D. (There are no Class 1A NICs to pay for expenses and benefits reported on form P9D.)

The total Class 1A NICs due for all your directors and employees needs to be reported on form P11D(b) by 6 July after the tax year. You must then pay this amount to HMRC by 19 July (22 July if you pay electronically).

PSA payments

If you've agreed a PAYE Settlement Agreement (PSA) with HMRC, then you'll need to make a payment by 19 October after the end of the tax year (22 October if you pay electronically).

A PSA payment comprises two elements:

  • the tax due on the expenses and benefits covered by the PSA (without the PSA in place, this tax would usually be paid by your employees)
  • Class 1B NICs, calculated on the combined value of the expenses and benefits and the tax paid on them under the PSA

For more information about PSAs see the next section, 'Simplifying your end-of-year reporting'.

More about paying Class 1A NICs to HMRC

More about making PSA payments

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Simplifying your end-of-year reporting

You can cut down on your end-of-year reporting by applying to HMRC to have eligible expenses and benefits included in a dispensation or a PSA. Any items covered under either of these schemes don't need to be reported on forms P11D and P9D at the end of the year.

Dispensations

You can apply for a dispensation to cover any expenses and benefits for which your employee gets a full tax deduction. This includes many routine business-related expenses and benefits.

If HMRC agrees that an item can be included in a dispensation, then as well as not having to report it at the end of the year, you also don't need to worry about any tax or NICs being due on it.

Dispensations - find out more

PSAs

You can use a PSA to pay for the tax and NICs due on certain expenses and benefits that are time-consuming or difficult to report individually. The three categories that can be included are:

  • minor items
  • irregular items
  • items that it's not practical to operate PAYE on or that are difficult to value for P11D or P9D reporting

You don't need to report items covered by a PSA at the end of the tax year, and you don't have to calculate the tax or NICs that's due on them individually. But you do need to make a one-off payment to HMRC at the end of the tax year - see the previous section 'Paying HMRC at the end of the tax year'.

Read about applying for a PSA

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More useful links

Find out about PAYE online for employers

Read about PAYE and NICs payment deadlines

Find out how to correct errors in expenses and benefits reporting

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