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Employee benefits, P11D and payrolling benefits in the UK

Private medical insurance, a car, relocation costs, a flat for a seconded manager: most benefits are taxable in the UK and must be reported on a P11D by 6 July each year, with Class 1A National Insurance at 15% paid by the company.

From £45per employee per year · payrolled benefits included in payroll fee

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UK employers report taxable benefits either annually on form P11D (with a P11D(b) summarising the Class 1A NI due by 22 July) or by payrolling them — adding the cash value to pay each month so the tax is collected in real time. From April 2027 payrolling becomes mandatory for most benefits; we move clients across ahead of that.

Overseas groups typically arrive with a benefits package designed for home rules. Relocation costs are exempt up to £8,000 if structured correctly; accommodation is usually taxable; employer pension contributions are exempt; health insurance is taxable. We set the package up so what is exempt stays exempt and what is taxable is reported correctly.

What’s included

Benefit-by-benefit tax treatment review
P11D and P11D(b) prepared and filed by 6 July
Class 1A National Insurance calculated
Payrolling benefits registration and monthly processing
PAYE Settlement Agreement for minor benefits where useful
Relocation and expat package structuring

How it works

What happens, in order

Review

Each benefit classified: exempt, taxable, or reportable only.

Choose the route

Payrolling for simplicity, or P11D where a benefit cannot be payrolled.

Report

Monthly through payroll, or annually by 6 July with Class 1A paid by 22 July.

When you need this

Who this is for

Any UK company offering more than salary and pension — which includes almost every subsidiary of a US, Indian or European group.

Common questions

When is the P11D deadline?

6 July following the tax year, with Class 1A NI paid by 22 July (19 July by post).

Is private health insurance taxable in the UK?

Yes. The premium the employer pays is a taxable benefit for the employee and carries Class 1A NI for the employer.

Are relocation costs taxable?

Up to £8,000 of qualifying relocation costs are exempt if paid by the end of the tax year following the move. Above that, or outside the qualifying categories, they are taxable.

What is payrolling benefits?

Adding the taxable value of a benefit to each month’s pay so tax is collected through PAYE, instead of reporting it once a year on a P11D. It becomes mandatory for most benefits from April 2027.