P11D Explained: Benefits in Kind & Your Tax Code
If your employer provides a company car, private healthcare, or other perks, you will receive a P11D by 6 July. Here is exactly how it works, how it reduces your tax code, and what happens if something is wrong.
What is a P11D and when do you get one?
A P11D is a form your employer submits to HMRC reporting the cash equivalent value of any Benefits in Kind (BiK) they have provided to you during the tax year. Because these benefits have a financial value, HMRC treats them as additional taxable income.
The P11D covers the tax year April 6 to April 5, and your employer must file it — and give you a copy — by 6 July each year. For 2025/26 benefits, the deadline is 6 July 2026. HMRC then uses this information to adjust your tax code for the following tax year.
- Company car (including fuel benefit)
- Private Medical Insurance (PMI / BUPA / AXA Health)
- Interest-free or cheap loans over £10,000 (e.g., season ticket loans)
- Living accommodation provided by your employer
- Non-business travel and entertainment expenses
- Subscriptions paid on your behalf (gym, professional memberships)
How a P11D affects your tax code — worked example
HMRC does not send you a bill for your benefits tax. Instead, they collect it by reducing your Personal Allowance. Here is exactly how:
| Standard Personal Allowance 2026/27 | £12,570 | 1257L tax code |
| Less: PMI benefit value | −£1,000 | Taxable benefit |
| Adjusted Personal Allowance | £11,570 | New: 1157L tax code |
| Tax on the benefit (20% basic rate) | £200/year | £16.67/month extra tax |
A higher-rate taxpayer with the same £1,000 PMI benefit would pay £400/year extra tax (40% × £1,000), reflected as tax code 1157L with more tax collected per month.
If your total BiK value exceeds your Personal Allowance (£12,570), your adjusted allowance goes below zero. HMRC issues a K code (e.g., K200). A K code means your employer adds a notional amount to your taxable pay each month to ensure the benefit tax is collected. There is a cap — no more than 50% of your pay can be deducted via a K code in any one period.
Company car BIK calculation 2026/27
Company car tax is calculated as: List price × CO2 band percentage = Taxable benefit value. You then pay income tax on that value at your marginal rate.
Key rates for 2026/27:
| Vehicle type / CO2 | BIK % 2026/27 | Example: £30k car, 20% taxpayer | 40% taxpayer |
|---|---|---|---|
| Pure Electric Vehicle (0g/km) | 2% | £120/year | £240/year |
| Ultra Low (1–50g/km, EV range 130+ miles) | 2% | £120/year | £240/year |
| Ultra Low (1–50g/km, EV range 70–129 miles) | 5% | £300/year | £600/year |
| Low (51–75g/km) | 15% | £900/year | £1,800/year |
| Petrol (76–94g/km) | 17% | £1,020/year | £2,040/year |
| Petrol (95–114g/km) | 20% | £1,200/year | £2,400/year |
| Petrol (115–139g/km) | 25% | £1,500/year | £3,000/year |
| Petrol (160–179g/km) | 31% | £1,860/year | £3,720/year |
Note: The EV rate of 2% is fixed until 2027/28 under current government plans, making EVs significantly more tax-efficient as company cars. Diesel cars attract a 4% surcharge unless they meet RDE2 emissions standards.
What happens if your employer gets the P11D wrong
P11D errors are surprisingly common. Common mistakes include using the wrong car list price, reporting a benefit you did not actually receive, or miscalculating private fuel benefit. Here is what to do:
- Compare your P11D against your records. Check car list prices against HMRC's published data or your finance agreement.
- Raise the error with your employer's HR or payroll department in writing. They can submit a corrected P11D (P11D(b) amendment) to HMRC.
- If your tax code has already been adjusted incorrectly, contact HMRC directly on 0300 200 3300 or update via your Personal Tax Account.
- Once HMRC receives the corrected data, they will recalculate your liability. If you have overpaid, a refund will be issued (automatically via PAYE or through Self Assessment).
Many employers now payroll benefits — adding the cash equivalent to your monthly pay and collecting tax in real-time through PAYE, rather than via an annual P11D. HMRC plans to make this mandatory. If your employer payrolls benefits, you will not receive a P11D for those benefits, but you will see the benefit value on your payslip each month.
Check the tax on your company benefits
Calculate exactly what a company car or other benefit costs you in tax, or check how a new tax code affects your take-home.