P11D benefits in kind

What are benefits in kind?

Benefits in kind (BIK) are non-cash perks provided to employees or directors in addition to salary — things like company cars, private medical insurance, interest-free loans, and fuel cards. Most benefits are taxable, and both the employee (who pays income tax on the benefit value) and the employer (who pays Class 1A NI) have obligations.

Common taxable benefits

Benefit	How valued	Notes
Company car	CO2 emissions + list price formula	Calculated using HMRC’s BIK % table
Car fuel (private use)	£27,800 × car’s BIK %	Only if employer pays for private fuel
Private medical insurance	Cost to employer	Most common BIK
Interest-free loans	HMRC official rate × loan balance	Only if total loans exceed £10,000
Home working expenses	Actual cost above HMRC allowance	£6/week is exempt
Living accommodation	Annual value or cost, complex rules

Exempt benefits (no P11D needed)

Benefit	Limit
Mobile phones	1 per employee
Staff parties	£150 per head per year
Eye tests and corrective eyewear	If required for VDU use
Cycle-to-work scheme	No limit (if properly structured)
Workplace canteen	If available to all employees
Trivial benefits	£50 per benefit, £300/year for directors

Recording benefits in AccBooks

Go to Payroll → Benefits → Add benefit:

1. Select the employee.
2. Choose the benefit type.
3. Enter the relevant details (e.g., for a company car: CO2 emissions, list price, date first registered, fuel type, any private fuel provision).
4. AccBooks calculates the taxable value using HMRC’s current rates.
5. Set the period (6 April to 5 April).

Benefits can be payrolled (taxed through PAYE monthly) or reported on the annual P11D. AccBooks supports both approaches.

Payrolling benefits

Payrolling means you collect income tax on the benefit value through each payslip rather than annually via P11D. This is simpler for employees and eliminates the need to file P11D forms (except for company cars and fuel).

To register for payrolling:

1. Go to Payroll → Settings → Payrolled benefits.
2. Select the benefits you want to payroll.
3. Register with HMRC before the start of the tax year (by 5 April) — AccBooks generates the registration notification.

Filing P11D forms

If you’re not payrolling all benefits, you must submit a P11D for each employee who received a taxable benefit by 6 July after the tax year end.

In AccBooks:

1. Go to Payroll → Year-end → P11D.
2. Review each employee’s benefits summary.
3. Check calculated values and add any missing benefits.
4. Click File P11D with HMRC. AccBooks submits electronically.

P11D(b) — employer’s Class 1A NI

You must also submit the P11D(b) — the employer’s declaration and payment of Class 1A NI on the total taxable BIK value.

Class 1A NI rate: 13.8% of the total taxable BIK value.

Pay Class 1A NI by 22 July (electronic payment). AccBooks shows the amount due on the P11D summary.

In AccBooks, file P11D(b) under Payroll → Year-end → P11D(b).

Company car calculations

AccBooks calculates company car BIK using:

• List price (P11D value — the manufacturer’s UK list price at first registration, including accessories).
• CO2 emissions in g/km — determines the BIK percentage from HMRC’s table.
• Fuel type — electric vehicles have a 2% BIK rate (2026/27); diesel cars have a 4% surcharge.

Example: List price £35,000, CO2 130g/km (BIK % = 31%). Annual BIK = £35,000 × 31% = £10,850. Employee pays income tax on this at their marginal rate.