If you’re an employer, HR professional, or payroll manager, you’ve probably come across the term P11D form before. And if you’ve ever squinted at one wondering what it’s for or how changes coming in 2026 might affect your process — you’re in the right place.
This blog breaks down what P11D forms are, the types of benefits they cover, the changes coming to how they’re reported, and what you should be doing now to get ahead of the curve.
What are P11D forms?
P11D forms are used by UK employers to report benefits and expenses given to employees that aren’t included in their regular salary. Think of them as the way HMRC finds out about all the “extras” like company cars, private health insurance, interest-free loans, and so on.
Here’s a list of common perks that show up on a P11D:
- Company cars and fuel
- Private medical insurance
- Interest-free or low-interest loans (like season ticket loans)
- Gym memberships paid for by the employer
- Company credit cards used for personal expenses
- Training courses and professional subscriptions (if not directly related to the job)
If the company pays for something on behalf of the employee and it doesn’t go through payroll, chances are it goes on a P11D.
Employers pay Class 1A National Insurance on most of these benefits. Meanwhile, employees must declare them in their Self-Assessment tax return (if they do one) and may end up paying more tax.
Changes to reporting in 2026
From April 2026, most benefits that would usually go on a P11D will need to be reported through payroll in real-time instead. This move to “payrolling” means that instead of submitting P11Ds at the end of the tax year, employers will report benefits directly in employees’ monthly or weekly payslips.
The shift to real-time reporting means fewer tax coding surprises for employees. Employees will see any taxable benefits as they receive them, which means no more surprise tax bills months down the line — and no need for HMRC to adjust tax codes mid-year.
What’s in and what’s out?
Not everything will need to be payrolled. While most benefits like company cars and private medical insurance will be included, beneficial loans and accommodation (like tied housing) are currently excluded from the 2026 changes. These will still need to be reported through the P11D process.
What employers should do now
2026 might feel like a while away, but the reality is many businesses will start payrolling benefits from April 2025. The earlier you start preparing, the smoother the transition will be.
Here’s what you can do now to get ahead:
Review your current benefits
Take a look at the benefits you currently offer. Are they on your employees’ payslips or only on the P11D? Now’s the time to make a full inventory of what you’re providing, from company cars to that gym membership perk.
Talk to your payroll provider
Not all payroll software is set up for real-time benefits reporting. Ask your payroll provider if they support payrolling benefits and what setup steps are required.
Consider payrolling early
Getting started in April 2025 (or sooner) could be a smart move. It gives your team a full year to test and adjust before the changes become mandatory in 2026. Plus, employees will appreciate seeing the tax implications of their benefits in real time.
One practical tip: be mindful of car swaps or upgrades. Employees will now see tax changes immediately, so timing can affect their take-home pay from one period to the next.
Communicate with employees
Real-time reporting is great for transparency, but it also means employees will notice changes quicker. Make sure you explain what’s changing, how it affects them, and when they’ll start seeing differences in their payslips.
Prepare for internal policy updates
You may need to update contracts, handbooks, or internal policies to reflect the new way benefits are reported. This is also a good opportunity to review your perks and see if they’re still delivering value to your team.
Final thoughts
The move away from annual P11D submissions to real-time payrolling is a big change but it’s a positive one. It means less admin, fewer surprises, and a clearer tax picture for everyone involved.
That said, don’t wait until 2026 to figure it all out. Start reviewing your systems now, get your payroll team up to speed, and consider jumping in early if it makes sense for your business. By the time the mandatory change rolls around, you’ll be well ahead of the game, and your employees will thank you for making their tax lives that much simpler.
Need help with P11D submissions or any other aspects of your finances? Talk to our friendly team, we’d love to help.
