P11D Deadline 2026: A Guide for UK Employers

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For the tax year ending 5 April 2026, every UK employer that provided expenses or benefits to its directors or employees outside payroll must submit a P11D and a P11D(b) to HMRC by 6 July 2026.

The P11D reports each individual employee’s benefits in kind. The P11D(b) reports the employer’s overall Class 1A National Insurance liability on those benefits. Both must be filed electronically, paper P11Ds and P11D(b)s, including amendments, were withdrawn by HMRC from 6 April 2023.

For most SMEs, this is one of the more routine filings of the year. It is also one of the more easily mishandled, particularly in 2026 where rate and threshold changes have made small errors costlier than before.

Who this applies to

• Every UK employer that provided benefits in kind to directors or employees in the 2025-26 tax year.
• Owner-managed companies with director benefits (company cars, private medical insurance, beneficial loans).
• Employers operating salary sacrifice arrangements that include reportable benefits.
• Employers that have payrolled some but not all benefits, the unpayrolled benefits still require a P11D.

The deadlines that matter

Late filing of a P11D(b) attracts an automatic penalty of £100 per 50 employees for each month or part-month it is late. Late payment of Class 1A NIC attracts interest from the due date and may attract a penalty if the delay continues.

Three things that have changed for 2025-26

Class 1A NIC rate is 15%

Class 1A is paid by the employer on most non-cash benefits, company cars, private medical insurance, gym memberships, beneficial loans above the threshold, accommodation. The rate tracks the employer secondary Class 1 rate.

From 6 April 2025, that rate increased from 13.8% to 15%. The rate that applies to the 2025-26 P11D(b), due 6 July 2026, is therefore 15%.

Employer secondary threshold reduced to £5,000

From 6 April 2025, the employer secondary threshold reduced from £9,100 to £5,000 per year. The threshold is set in legislation until 5 April 2028, after which it will increase in line with CPI.

The threshold change applies to Class 1 NIC on cash earnings rather than to Class 1A on benefits in kind. But it matters for the wider conversation about benefits packages, the marginal employer NIC cost of an extra pound of salary has increased.

Employment Allowance increased to £10,500

To partially offset the rate and threshold changes, the Employment Allowance increased from £5,000 to £10,500 from 6 April 2025. The £100,000 prior-year secondary NIC liability cap on eligibility was also removed, bringing more SMEs into scope.

Employment Allowance is set against employer secondary Class 1 NIC. It does not reduce Class 1A NIC on benefits in kind.

Old (2024-25) vs new (2025-26) employer NIC: a quick comparison

Worked example

An SME with five director-employees and thirty further employees. Benefits in kind reported on the 2025-26 P11D:

• Company cars across the five directors: combined cash equivalent of £40,000.
• Private medical insurance: £6,000 in total across thirty employees.
• Total benefits subject to Class 1A: £46,000.

Class 1A liability for 2025-26: £46,000 × 15% = £6,900.

Under the prior 13.8% rate, the same benefits package would have produced a liability of £6,348, a difference of around £550 for unchanged benefits.

The benefits most often missed on SME P11Ds

• Personal use of a company car or van not declared as such.
• Private medical insurance for a director’s family alongside the director.
• Loans to directors that exceed the £10,000 beneficial loan threshold during the year.
• Gym memberships, parking outside designated workplaces, and non-business travel.
• Living accommodation provided to a director rather than to a non-director employee.

Catching these before 6 July is straightforward. Catching them in an HMRC enquiry two years later is not.

Lexmore’s View

The P11D process has not become more complex in 2026, but it has become less forgiving. The combination of a higher Class 1A rate, a lower secondary threshold and an increased Employment Allowance changes the maths of how SMEs structure benefits packages.

For employers that have grown headcount, changed benefits, or restructured payroll in the last twelve months, this is the year to have a second pair of eyes on the return before submission. If you would like a structured review alongside your accountant, our accountancy partnership programme is designed for exactly that.

References

• Expenses and benefits: A to Z (gov.uk)
• Reporting expenses and benefits to HMRC (gov.uk)
• Rates and allowances: National Insurance contributions (gov.uk)
• Employment Allowance (gov.uk)
• Payrolling employees: taxable benefits and expenses (gov.uk)
• HMRC Employment Income Manual