Benefits-in-kind: July deadline looms

The deadline for reporting 2025-26 benefits-in-kind is fast approaching.

All taxable benefits provided to employees must be reported to HMRC on form P11D.

And for the tax year ended April 5, 2026, they must be submitted by July 6, 2026.

Where an employer arranges and pays for a contract and/or an asset for private use on behalf of an employee or director, this creates a benefit-in-kind (BIK) as the individual is receiving a personal benefit at the employer’s expense.

The benefit-in-kind should be reported on a P11D to ensure compliance with HMRC requirements.

The benefit-in-kind is based on the ‘cash equivalent’ which is calculated using various rules and guidelines as stated by HMRC.

The most common types of benefits-in-kind provided to employees are:

• Company car
• Private medical insurance
• Private use of company van
• Fuel provided for private use for a company van or company car

A full list of taxable benefits that must be reported to HMRC can be found on HMRC’s website: https://www.gov.uk/expenses-and-benefits-a-to-z

From a personal tax perspective, the ‘cash equivalent’ of the benefit is treated as employment income. The employee or director is therefore liable to income tax on the value of the benefit provided.

The provision of benefits-in-kind also has tax consequences for the employer, as they must pay Class 1A National Insurance Contributions (NICs) on the cash equivalent of the benefit.

The current Class 1A NIC rate is 15 per cent. This cost is, however, deductible when calculating the employer’s taxable profits for the year.

Employers are also required to submit form P11D(b), which summarises the total value of benefits provided and the Class 1A NICs payable. This is also due by July 6, with electronic payment of the Class 1A NIC liability due by July 22, 2026.

Late submission of Forms P11D/P11D(b) may result in HMRC penalties of £100 per month and interest on late payment of Class 1A NIC.

If an incorrect P11D is filed fraudulently or negligently, a penalty of up to £3,000 per form can be levied. This may also encourage HMRC to conduct an Employer Compliance Review.

If you are providing benefits-in-kind and these are not currently being reported via forms P11D/P11D(b), please contact your usual WNJ Partner or Edward Cullen at EDC@wnj.co.uk to discuss preparation and submission ahead of the filing deadline.