Payrolling benefits vs. P11D

If you provide taxable benefits or benefits in kind (BIKs) to your employees, for example company cars or medical insurance, you need to submit a P11D(b) form to HMRC by 6 July each year.

You can either include the cash equivalent value of the benefits in your payroll and deduct the tax, or complete form P11D for each employee:

• You can use Sage 50 Payroll to payroll benefits except for accommodation, beneficial loans and credit tokens or vouchers. Find out more in our guide to payrolling benefits - the basics
• Alternatively, Sage 50 P11D is a convenient way to calculate your employees’ taxable benefit values and calculate Class 1A National Insurance. It’s easy to use and there’s no requirement for in-house experience

Using Sage 50 Payroll

• Register with HMRC before 5 April 2024 for the tax year 2024/2025
• Once the tax year starts you have to payroll the benefits for the whole of the tax year, or until you stop providing them
• You need to work out the Class 1A National Insurance contributions on benefits and manually complete form P11D(b)
• If you make a mistake, roll back or restore your data
• Calculate the P11D values or cash equivalent manually, then manually enter the figures into Sage 50 Payroll

Using Sage 50 P11D

• You can print P11D forms for your employees
• You can submit your P11D forms and P11D(b) to HMRC in just a few clicks
• It's easy to correct mistakes. Just delete the benefit and start again
• If an employee leaves part-way through the tax year, it doesn't matter, they don't have to be employed to receive the benefit
• When you set up your benefits, you can use the Sage 50 P11D software to calculate the figures

Payrolling benefits

If you register for payrolling benefits, you need to provide a letter to your employees letting them know what it means for them. Give your employees the following information before 1 June after the end of each tax year:

• Details of the benefits you've payrolled, for example, car fuel
• The cash equivalent of each benefit that you've payrolled
• The relevant amount you've payrolled for optional remuneration (OpRA)
• Details of benefits you haven't payrolled

You can give this information on your employees' payslips or in a separate note or statement. It should be clear to employees:

• What benefits have been subject to tax
• How much of the value of each benefit you've collected and reported tax on

If your employees fill in a Self Assessment tax return, they'll need this information so they can inform HMRC.

Want to buy Sage 50 P11D?

Sage 50 P11D makes it easy to calculate your taxable benefit amounts and class 1A National Insurance. This helps to ensure you submit accurate information to HMRC. Leave your details and we'll be in touch.