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As the 6th of July 2025 deadline for this year’s P11Ds approaches, it is vital that taxpayers understand their reporting requirements. HMRC has issued a reminder to companies whose financial statements contain loans to directors and employees of more than £10,000 each to ensure they understand whether they need to include this on their P11Ds.
In this article, I explain what forms P11D are, and provide a breakdown of the complex rules surrounding the inclusion of loans.
What is a P11D?
A P11D form is a document that UK employers must submit to HMRC each tax year to report benefits-in-kind provided to employees and directors.
What is a benefit-in-kind?
These are benefits or expenses provided in addition to their salary — for example, company cars, private health insurance, or interest-free loans.
Why are P11Ds important?
Benefits-in-kind can affect the amount of tax an employee has to pay, so accurate reporting is crucial. Employers are responsible for:
- Submitting the P11D for each relevant employee.
- Paying Class 1A National Insurance on the total value of the benefits.
- Ensuring employees understand how their benefits may impact their tax code.
When is it due?
The deadline for submitting P11D forms and paying any related Class 1A NICs is 6th of July 2025, following the end of the tax year (which ended on 5th of April 2025).
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How can Jack Ross help?
We offer a comprehensive P11D service, in which we prepare forms for each employee and provide a breakdown of the exact National Insurance contributions due. This is then sent to the employer for their approval. Once approved, we submit the forms to HMRC on our client’s behalf.
Our tailored quotes are based on each employer’s unique set of circumstances – please fill out the contact form on the right-hand side for further information.
What are the rules surrounding P11Ds and loans?
If an employer gives a loan to an employee or director (or a family member of theirs), it might count as a taxable benefit — meaning the employee or director could owe extra tax.
This applies when:
- No interest is charged, or
- Interest is charged at less than 2.25% (the official rate for 2024/25), and
- The loan is greater than £10,000 at any time during the tax year.
What if the loan is fully repaid?
Even if the loan is fully repaid within nine months after the company’s year-end (which avoids a company tax charge), the employee or director may still owe tax on the benefit. This aspect of the reporting requirements is where misunderstandings often arise.
Can loans be included in the payroll?
Loans cannot be included in payroll for tax purposes, so they must be reported separately on a P11D form.
HMRC’s detailed guidance on this matter can be found here.
Get Expert Help
Understanding the rules around P11D’s and loans can be complex and time-consuming. At Jack Ross Chartered Accountants, we are here to help you understand your obligations, plan effectively, and ensure you meet all deadlines. Contact us today using the form below to discuss your specific situation and how we can assist you in preparing your P11Ds.