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The P11D and benefits in kind

When a benefit in kind is, how it’s reported, and other things to note

If your company provides you with a non-cash benefit such as private medical insurance or a company car, HMRC requires this to be reported on a P11D form each year.

What a benefit in kind is

A benefit in kind (BIK) is anything of value the company provides to a director or employee that is not cash. Common examples include private medical insurance, a company car, a gym membership, or an interest-free loan above £10,000. The value of the benefit is treated as additional taxable income for the recipient.

How it is reported

Your company needs to file the P11D by 6 July each year. The company also pays Class 1A National Insurance contributions at 15% on the total value of all benefits provided, due by 22 July. You pay Income Tax on the benefit value through your Self Assessment return or via an adjustment to your tax code.

What is exempt

  • One mobile phone per employee (in the company's name)
  • Trivial benefits under £50 each, up to £300 per year for directors
  • Employer pension contributions
  • Workplace parking at your normal place of business

Coming change: payrolling from April 2027

The P11D system is being phased out. From 6 April 2027, certain benefits, including company cars and private medical insurance, must be reported through payroll in real time rather than on a P11D, with most other benefits following from April 2028. This means the tax on these benefits will be collected through your monthly payroll as they arise, rather than after the year end. Interest-free loans and living accommodation will stay on the P11D for the time being.

💡 Good to know: Tell us before the company provides any new benefit to you or an employee. We calculate the BIK value and the tax cost, so there are no surprises at year-end. The most common BIK for small company directors is private medical insurance.

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