Avoid a P11D Panic: Are Your Benefits in Kind Ready for 6 July?
Many employers breathe a sigh of relief once the payroll year-end is out of the way in April, and yet the job is only half-done. Every taxable Benefit in Kind (BIK) your staff enjoyed during 2024/25 must be reported to HMRC on form P11D by 6 July.
And you really don’t want to miss that date because the penalties start mounting up from day one.
At Grant-Jones we’re already gathering the figures, spotting anomalies, and keeping clients out of the firing line. So, if you haven’t got your P11Ds underway yet, now is the time to get started!
What counts as a Benefit in Kind?
A BIK is any non-cash perk that gives an employee personal value: think company cars, private medical insurance, interest-free loans, even gym memberships.
HMRC’s A-to-Z list runs from “Assets” all the way to “Vouchers”, and it’s broader than you might think:
- Staff entertaining that drifts over the small-benefit limit
- Mobile phones in an employee’s own name but paid by the business
- Home-to-work travel for directors
The golden rule is: if it saves an employee personal expense, it probably belongs on a P11D.
Why clear record keeping is vital
HMRC expects you to hold transaction-level evidence (receipts, mileage logs, policy schedules, and so on) for at least three years. Sloppy paperwork makes it almost impossible to prove a benefit is exempt or correctly valued. And even worse, if HMRC opens a compliance check you may end up paying the tax and National Insurance due, plus interest and a penalty – and we don’t want that!
Good records mean:
- Correct valuations (especially for company cars and beneficial loans)
- Clear split between business and personal use
- Evidence to claim an exemption or apply the right dispensation
If you’re still fishing around in email archives each June, it’s time to tighten up your processes.
Exemptions and dispensations are not a get-out-of-jail card!
Certain routine expenses, like subsistence on a business trip, for example, are exempt from BIK rules if they meet HMRC’s conditions and you keep adequate evidence. In the past you could apply for a “dispensation” to skip reporting those items. Today most dispensations have been replaced by statutory exemptions, and the burden of proof is on you.
Basically…no paperwork, no exemption!
Typical exempt items (when the rules are met) are:
- Business travel and subsistence
- Employer-provided mobile phone (one per employee)
- Trivial benefits costing £50 or less
Our role as accountants is to check the facts, confirm the exemption applies, and keep the information trail watertight so you’re not second-guessing the rules.
What happens if you miss the 6 July deadline?
HMRC can charge an initial penalty of £100 per 50 employees for each month (or part month) your P11Ds are late. Add potential fines for incorrect returns, interest on underpaid Class 1A National Insurance, and the cost of management time, and it mounts up fast.
A few common triggers for penalties are:
- Forgetting directors’ benefits (“I own the company, surely that’s different?”, won’t cut it!)
- Assuming an expense is exempt without checking conditions
- Submitting rough estimates that don’t match payroll data
The safest (and least stressful) route is to work with your accountant to get everything right the first time.
Five steps to get on the front foot
Do you have a proactive accountant in your corner who…
- Lists every benefit: cars, insurance, loans, subscriptions, staff parties, etc.
- Matches each item to evidence: contracts, invoices, mileage logs, etc.
- Checks for statutory exemptions: keeping proof that conditions are met
- Values benefits accurately: especially car benefit and loan interest calculations
- Submits P11Ds and reports total Class 1A NIC owed by 6 July
Why working with us saves you money and sleep
At Grant-Jones our team has vast experience completing P11Ds for owner-managed businesses.
We…
- Collect the figures early – so there’s time to fix gaps rather than firefight
- Apply exemptions correctly – avoiding over-payment on Class 1A NIC
- Use specialist software – reducing manual errors and giving clear audit trails
- Handle HMRC queries – you won’t be left explaining technical points alone
Clients tell us the real benefit is peace of mind: knowing the form is filed, the maths stacks up, and any HMRC letter will land on our desk, not theirs!If the 6 July P11D deadline is still on your to-do list, now is the time to act. Get in touch and we’ll take the burden of collecting the data, applying the right rules, and submitting on time, off your shoulders.
