P11D(b) Employer Return 2026/27: Class 1A NI Deadline and How to File

What is the P11D(b)?

The P11D(b) is the employer's annual Class 1A National Insurance return. After submitting P11D forms for individual employees (showing each person's taxable benefits), the employer submits a P11D(b) to:

1. Declare the total value of benefits in kind provided across all employees.
2. Calculate and pay the Class 1A NI owed on those benefits.

Class 1A NI is an employer-only charge — employees do not pay NI on most benefits in kind (they pay income tax instead, usually collected through an adjusted tax code).

Key deadlines for the 2025/26 tax year

The 6 July deadline is for both individual P11D forms and the P11D(b). These can be submitted online via HMRC's PAYE Online service or through payroll software.

Class 1A NI rate: 15%

From 6 April 2025, the Class 1A NI rate increased from 13.8% to 15%, following the Autumn Budget 2024 announcement that increased employer NI rates. This applies to both 2025/26 and 2026/27 tax years.

The Class 1A charge is calculated on the total value of all reportable benefits across all employees:

Class 1A NI = Total benefits value × 15%

For example, if an employer provides benefits totalling £150,000 across their workforce (company cars, medical insurance, etc.):

• Class 1A NI = £150,000 × 15% = £22,500

This is in addition to the cost of providing the benefits themselves.

Which benefits trigger Class 1A NI?

Benefits that must be reported and attract Class 1A NI

• Company cars — taxable value based on list price × BIK percentage (set by CO2 band)
• Car fuel for private use — car fuel benefit multiplier × BIK percentage
• Vans available for private use — fixed annual charge (£4,020 for 2025/26)
• Van fuel for private use — fixed charge (£757 for 2025/26)
• Private medical or dental insurance — cost to employer of providing cover
• Interest-free or cheap loans over £10,000 — the interest foregone (official rate × outstanding balance)
• Gym memberships — cost to employer
• Private use of employer assets — 20% per year of market value
• Living accommodation — annual value or cost-based charge
• Non-business entertainment above the £150/head annual function exemption

Exempt benefits (no P11D, no Class 1A NI)

• Mobile phones — one phone per employee, employer contract
• Employer pension contributions — within annual allowance limits
• Childcare vouchers — legacy scheme, grandfathered
• Tax-free childcare — government scheme, not employer benefit
• Bikes and safety equipment — Cycle to Work scheme
• Workplace parking
• Eye tests and corrective glasses for VDU users
• Annual staff events — up to £150 per head per year

Loans to employees: the £10,000 threshold

Employer loans that exceed £10,000 at any point during the tax year trigger a benefit charge based on the HMRC official rate of interest (currently 2.25% per annum — check HMRC for the current rate as it changes periodically).

If you lend an employee £15,000 interest-free and the official rate is 2.25%, the annual benefit value is:

• £15,000 × 2.25% = £337.50

This £337.50 is reported on the P11D, and Class 1A NI of 15% × £337.50 = £50.63 is payable on the P11D(b).

How to file the P11D(b)

Online via HMRC PAYE Online

Log in at HMRC's Online Services and navigate to PAYE for Employers. You can enter P11D details manually or upload a file. The P11D(b) is then generated automatically from the totals.

Via commercial payroll software

Most payroll software (e.g. Sage, BrightPay, Xero Payroll, QuickBooks Payroll) includes P11D functionality. You enter each employee's benefits; the software generates P11D forms and the P11D(b) for submission.

Paper forms

HMRC accepts paper P11D and P11D(b) forms, but online submission is strongly preferred as it is faster and reduces the risk of errors. Paper submissions still must reach HMRC by 6 July.

Payrolling benefits: eliminating P11D forms

Since April 2016, employers have been able to payroll benefits — including the taxable value of benefits in the employee's monthly pay and collecting tax through PAYE in real time.

Advantages of payrolling:

• No individual P11D forms needed (for payrolled benefits).
• Employees pay tax on benefits evenly throughout the year rather than in a lump sum via tax code.
• Fewer year-end forms = administrative saving.

Important caveat: Even with payrolled benefits, the employer must still submit a P11D(b) to declare and pay Class 1A NI on those payrolled benefits by the usual deadline.

Payrolling must be registered with HMRC before the start of the tax year (i.e. before 6 April). You cannot retroactively payroll benefits for a year already in progress.

Common mistakes to avoid

1. Missing the 6 July deadline — penalties start immediately and compound monthly.
2. Using the old 13.8% rate — the rate increased to 15% from April 2025.
3. Forgetting loans under £10,000 — if a loan crosses £10,000 during the year, the benefit applies for the entire year.
4. Not giving employees a copy of their P11D — employees need it to complete their Self Assessment tax return (if filing one) and to check their tax code is correct.
5. Confusing Class 1A and Class 1B — Class 1B applies to PAYE Settlement Agreements (PSAs). P11D Class 1A and PSA Class 1B are separate obligations.