Getting P11D reporting right matters for cashflow, compliance and trust with your team. If you provide benefits and expenses to staff or directors, you must either payroll them or complete forms P11D for each affected employee and a single P11D(b) to declare the Class 1A National Insurance due. This guide explains P11D reporting for small business owners in practical terms for 2025/26, with clear steps for digital, creative and media businesses that often juggle employees, freelancers and directors.
For 2025/26, employers pay Class 1A National Insurance at 15% on most taxable benefits. The general rule on timing still applies: report benefits by 6 July following the tax year, give employees their information by the same date, and pay Class 1A NIC electronically by 22 July. If you choose to payroll benefits, Income Tax is collected in real time through PAYE and you will not usually need a P11D for those items, though you must still file a P11D(b). There are exceptions, which we cover below. If you are moving from spreadsheets to payroll software or consolidating data from multiple systems, a little structure goes a long way. Our clients in the digital, creative and media sectors tell us that once the process is tidy, year-end P11Ds stop being a scramble and become a straightforward checklist. See the official deadline summary here.
What your P11D must include
Think in categories, not transactions. Unless the item is exempt, trivial or included in a PAYE Settlement Agreement (PSA), report it on the employee’s P11D and include the total on your P11D(b):
- Company cars and fuel: Cash equivalent based on list price and CO₂ rules.
- Private medical insurance: Policy cost or cash equivalent.
- Home broadband and mobiles: Taxable where there is significant private use or the contract is in the employee’s name.
- Assets provided for personal use: For example, equipment taken home primarily for non-business use.
- Relocation and subsistence beyond exemptions: Anything outside HMRC’s set reliefs.
- Vouchers and credit cards: Employer-funded personal spend is usually taxable.
You do not have to include items covered by specific exemptions or a PSA (for minor, irregular or impracticable benefits), and genuine business expenses that you reimburse with valid evidence remain non-taxable. HMRC’s 480 guidance confirms the broad principles.
Payrolling benefits – when a P11D is still required
Voluntary payrolling lets you collect the employee’s tax on most benefits in real time and skip the P11D for those benefits. Two important exceptions remain: employer-provided living accommodation and beneficial (low or interest-free) loans still have to be reported on P11D even if you payroll other benefits for the same employee. You must register to payroll before the tax year starts and give employees written notification of what you’re payrolling.
Regardless of payrolling, you still file a P11D(b) and pay Class 1A NIC on the taxable value of all benefits for the year. That includes benefits you have payrolled.
P11D reporting for small business owners: key dates and rates
- Report benefits, file P11D/P11D(b), and give employee copies: 6 July after the tax year.
- Pay Class 1A NIC: 22 July if paying electronically, or 19 July by cheque. GOV.UK
- Class 1A NIC rate for 2025/26: 15% on most taxable benefits.
If you payroll benefits, PAYE tax is collected monthly, but your P11D(b) and Class 1A NIC timetable stays the same.
What the data tells us
HMRC’s latest benefits-in-kind release shows the direction of travel and why records matter. In 2023/24 there were 840,000 recipients of company car benefit, up from 760,000 the year before, and 40,000 fuel benefit recipients as that benefit continues to decline. HMRC also reports the total taxable value of all Class 1A-taxable benefits at £8.9bn in 2023/24. For creative and media employers offering flexible packages, that scale is a reminder to document and reconcile benefits throughout the year, not just in June. (HMRC, 2025).
Common pitfalls we see in creative and media businesses
- Director benefits: Directors often have company-paid costs that drift into personal use. Action: Keep a running log of director expenses and decide early whether to payroll or P11D.
- Mixed-use tech: Laptops, phones and software seats are business tools, but private use can creep in. Action: Set simple policies and document business need to support exemptions.
- Travel and subsistence: Project-based work can blur the line between permanent and temporary workplaces. Action: Confirm workplace status and keep mileage and travel evidence tidy.
- Company cards: Personal items paid on a business card remain taxable. Action: Prompt month-end reviews and clear coding rules reduce year-end corrections.
- Late payrolling registration: You cannot backdate. Action: Decide your approach for 2026/27 well before April.
A simple process that works
- Benefit mapping: List every benefit you provide, who receives it and how it’s funded.
- Data sources: Payroll system: Holds payrolled benefits; Accounts: Picks up premiums and subscriptions; HR: Holds policy and eligibility.
Policies and comms: Allowances: Define what’s taxable; Employee notices: Tell staff when you start payrolling and what it means for payslips. - Reconciliations: Quarterly checks: Compare provider invoices to what’s in payroll; Year-end pack: Cash equivalents, supporting schedules, director sign-off.
- Decide PSA vs P11D: For minor or impracticable benefits, a PSA can simplify employee tax and reduce queries.
Looking ahead to mandatory payrolling
HMRC has confirmed that mandatory payrolling of benefits in kind will be introduced from April 2027, with loans and accommodation remaining outside the scope initially. That means more alignment between payroll, HR and finance, and fewer year-end codes for employees. If you are not already payrolling, 2025/26 is a good year to trial the approach on straightforward benefits and refine your workflows before it becomes standard. (HMRC technical note, 28 April 2025).
How FMA can help
Getting P11Ds right is about process, not heroics in June. We set up practical workflows for P11D reporting for small business owners that reflect how digital and creative teams actually work – cloud tools, remote staff, and live project demands. Our advice is grounded in the legislation, but we focus on simple routines you can maintain week to week. If you need a hands-on partner, our payroll service manages the moving parts and keeps your filings on track. If you want a periodic review, our business tax team can audit your benefits data, agree treatments and prepare P11D and P11D(b) submissions.
If you are weighing up payrolling versus traditional P11Ds, we will assess the mix of benefits you offer, model the cost impact of Class 1A NIC at 15% for 2025/26, and recommend clear steps. We also help with staff communications so your team understand what will appear on payslips and why. That removes surprises and support tickets at year end.
Ready to simplify P11D reporting for small business owners? Talk to us about a quick health check, a clean data cut-over to payrolling, or full outsourcing. Start the conversation and we’ll get you set up well before 6 July – so year-end becomes routine, not a rush.
