P11D 2025/26: The 6 July Deadline and What Mandatory Payrolling Means for Your Business

If you provided any benefits or expenses to employees or directors during the 2025/26 tax year, the clock is now ticking. The 6 July 2026 deadline for P11D and P11D(b) submissions sits less than ten weeks away, and HMRC's penalty regime for late filing is not exactly forgiving.

There is also a bigger story unfolding behind the scenes. After years of consultations, draft legislation, and one already announced delay, mandatory payrolling of benefits in kind is finally arriving in April 2027. That gives you one more P11D season under the old rules, and one final tax year (2026/27) to get your payroll software, your processes, and your people ready for the change.

Here is what UK employers and limited company directors should be focused on right now.

What is a P11D and who needs to file one?

A P11D is the form HMRC uses to collect information about the cash equivalent values of taxable benefits in kind and expenses paid to directors and employees outside of payroll. Common examples include company cars, private medical insurance, beneficial loans of more than £10,000 at any point in the tax year, gym memberships, and most non trivial gifts.

If you provided any of these items in 2025/26, you need to file a P11D for each affected individual. You also need to file one P11D(b) per employer, which is the summary return that calculates your Class 1A National Insurance liability on those benefits.

Where benefits were already taxed in real time through your payroll software (known as voluntary payrolling, registered with HMRC before 6 April 2025 for the 2025/26 year), you do not need to file a P11D for those specific benefits. You still need a P11D(b) though, because Class 1A NIC is settled annually rather than through the payroll itself.

The numbers that matter for 2025/26

The Class 1A NIC rate for 2025/26 is 15%, applied to the cash equivalent value of all reportable benefits. This is the rate that increased from 13.8% on 6 April 2025 alongside the wider rise in employer Class 1 secondary contributions.

A few tax year specifics worth pinning to the wall:

• 6 July 2026: filing deadline for P11D and P11D(b)

• 6 July 2026: deadline to give employees their copy of P11D information

• 19 July 2026: Class 1A NIC payment deadline if you pay by post

• 22 July 2026: Class 1A NIC payment deadline if you pay electronically and the funds clear the same day

Penalties for missing the P11D(b) filing date kick in fast. HMRC charges £100 per 50 employees for each month (or part month) of lateness, and interest accrues on Class 1A NIC paid after the due date.

The bigger change: mandatory payrolling lands in April 2027

HMRC originally planned to make payrolling of benefits in kind mandatory from April 2026. That date has now been pushed back to April 2027, giving employers and software providers an extra year to prepare. It was the right call. The earlier timetable was tight, and a chaotic launch would have served nobody.

From the 2027/28 tax year, most benefits in kind and expenses will need to be reported through Real Time Information and the income tax due will be collected through PAYE in the period the benefit is provided, not in arrears via a P11D. Class 1A NIC will also move into real time reporting.

Two notable exceptions remain on the table:

• Employment related living accommodation

• Beneficial loans (interest free or low interest)

These two will still need to be reported on a P11D for income tax purposes, even after April 2027. And Class 1A NIC for all benefits will still be summarised annually on a P11D(b) form.

What you should be doing in 2026/27

This year (the 2026/27 tax year, which began on 6 April 2026) is your last chance to test your processes voluntarily before mandatory payrolling lands. The deadline to register for voluntary payrolling for 2026/27 was 5 April 2026, so if you missed that, you cannot opt in for the current year. Plan now for a 2027/28 register by 5 April 2027 if you want to be properly bedded in before the rules become compulsory.

If you are already payrolling, treat the year ahead as a live rehearsal. Check that your software calculates cash equivalents correctly, that your employees can see the impact on their take home pay, and that your year end reconciliation processes work cleanly.

If you are not yet payrolling, focus on getting ready. That means:

• Auditing every benefit and expense you provide so nothing slips through the cracks

• Talking to your payroll software provider about their roadmap to April 2027

• Reviewing tax codes and current notices of coding for affected employees

• Briefing your team so they understand what real time tax on benefits will look like in their payslip

• Checking whether any beneficial loan or accommodation arrangement could be restructured, repaid, or written off before it complicates things

For directors of small limited companies, this is also a good moment to look again at whether the benefits you receive are actually tax efficient. The trivial benefits exemption (which permits up to £50 per benefit, capped at £300 per tax year for directors of close companies) often gets overlooked but remains one of the simplest planning tools available.

What happens if you ignore it?

Three things, none of them pleasant. First, HMRC penalties for late P11D(b) submissions rack up monthly until you file. Second, the cash equivalent of unreported benefits can become liable to PAYE under HMRC's discovery powers, with the employer often left footing the bill rather than the employee. Third, when mandatory payrolling lands in 2027, businesses that have not done the prep work will scramble through a difficult first year and likely make mistakes that cost real money in penalties and reconciliation work.

The good news is that getting this right is not complicated. It just needs a bit of attention before the deadline arrives.

Need a hand?

We help UK limited companies, sole traders, and growing businesses get on top of payroll, benefits, and HMRC compliance every year. If you would like a second pair of eyes on your P11D submissions for 2025/26, or a clear plan for the move to mandatory payrolling, we are happy to help. Get in touch through our contact page and we can take it from there.