A P11D is a form employers use to report taxable benefits and expenses given to employees, such as a company car or private medical cover. HMRC uses it to adjust the employee's tax code so the benefits are taxed correctly.
In one line: A P11D reports the cash value of an employee's taxable benefits in kind to HMRC each year.
How a P11D works
Where benefits are not already taxed through payroll, the employer files a P11D after the tax year ends. It lists each benefit and its cash equivalent, and a copy goes to the employee for their records.
An employee with a company car valued at 5,000 GBP a year and 600 GBP of medical insurance has 5,600 GBP of benefits reported. HMRC then reduces the tax code so tax is collected on that amount through PAYE.
Employers also pay Class 1A National Insurance on most reported benefits, calculated from the total P11D values, which is a cost separate from the employee's income tax.
P11D vs P60
A P60 summarises cash pay and deductions for the year. A P11D covers non-cash benefits in kind that sit outside ordinary salary but still carry a tax charge.
An employee may receive both: the P60 for wages and the P11D for perks. Increasingly benefits are payrolled instead, which removes the need for a separate P11D for those items.
Primary source: GOV.UK: Expenses and benefits for employers