Employer year-end compliance reporting

What employers need to report at year-end

As the tax year ends, employers are required to complete several employment tax reporting and payment obligations. Year‑end compliance for employee benefits and expenses can be particularly complex, with multiple reports, deadlines and payment requirements to manage.

Employee benefits and expenses are generally reported to HMRC through P11Ds, PAYE settlement agreements (PSAs) or via payrolling of benefits.

P11D reporting requirements for 2025/26

P11D forms are used to report certain expenses and benefits provided to employees during the tax year. Common examples include company cars, private medical insurance and certain types of accommodation.

Employers must:

Provide employees with a copy of their P11D by 6 July following the end of the tax year; and
Submit the accompanying P11D(b) to HMRC by the same deadline

The P11D(b) summarises all benefits reported on P11Ds and any benefits that have been payrolled. It is used to calculate the employer’s class 1A national insurance contributions, which are due at a rate of 15%.

The deadline for payment of class 1A national insurance contributions for the 2025/26 tax year is 22 July 2026 (if paying electronically).

Where an employer has a PAYE settlement agreement in place, any benefits covered by the PSA do not need to be reported on P11Ds.

Mandatory payrolling of benefits from April 2027

From April 2027, the reporting of benefits will move to mandatory payrolling, bringing an end to most P11Ds. This makes 2026/27 the final full year of P11Ds and further guidance on the mandatory process is expected later in the year.

Registration for voluntarily payrolling benefits for 2026/27 is now likely to be too late, and so for employers who haven’t already registered to payroll benefits for 26/27, a P11D will still be required for this year.

There are two exemptions for mandatory payrolling from April 2027, as these benefits can be complex to value, particularly where balances fluctuate or the official rate of interest changes during the year. From this date, beneficial loans and accommodation will be capable of being voluntarily payrolled rather than reported through the P11D process.

For all mandatory payrolled benefits, as well as where employers choose to payroll accommodation/loans, the taxable value will be calculated during the tax year and included through payroll, with income tax collected in real time via PAYE. This removes the need for separate year‑end P11D reporting for these benefits.

Under payrolling, employers must:

Identify which benefits are to be payrolled
Calculate the taxable value of those benefits
Include the taxable value through payroll
Apply the correct tax and national insurance deductions via the full payment submission (FPS)

PAYE settlement agreements: Rules and deadlines for 2025

A PAYE settlement agreement allows an employer to settle the tax and national insurance liabilities on certain expenses and benefits on behalf of employees on a grossed-up basis.

The benefits would then not be included in the employee’s P11D as the employer has committed to pay the tax on the employee’s behalf. Common items include events such as Christmas parties, performance related benefits such as long service awards, and ad-hoc gifts such as wedding or birthday gifts (if not covered by an exemption).

The deadline to apply for a PSA for the 2025/26 tax year is 5 July 2026. Where an application is made after the end of the tax year, some expenses and benefits may still need to be reported via the P11D process, particularly where they have already been included in tax codes or PAYE deductions.

Once HMRC has agreed the PSA:

The employer submits a PSA return detailing the relevant expenses and benefits
Any tax and Class 1B national insurance due must be paid by 22 October following the end of the tax year (or 19 October if paying by post)

Class 1B national insurance is charged at 15% for the 2025/26 tax year.

Other reporting requirements for employer year-end compliance

In addition to P11Ds and PSAs, employers should also ensure that the following obligations are met:

Payroll: Payroll information is reported to HMRC through real time information (RTI) on or before each employee’s payday, and any outstanding PAYE tax and national insurance liabilities are paid by 22 April (or 19 April if paying by cheque)
Short‑term business visitors: Where an appendix four agreement is in place for short‑term business visitors (STBVs) from overseas, a report of all such visitors must be submitted by 31 May
Employment related securities: Any share transactions or approved share schemes must be reported to HMRC by 6 July

Key deadlines

22 April	Final PAYE and national insurance payment
31 May	Short‑term business visitors year-end report
5 July	PSA application (if not already agreed with HMRC)
6 July	P11D and P11D(b)
22 July	Class 1A national insurance contributions payment
22 October	PSA tax and class 1B national insurance contributions payment

Conclusion

The end of the tax year places significant reporting and payment obligations on employers. By planning ahead and keeping track of key deadlines, employers can ensure compliance with their employment tax obligations and reduce the risk of penalties and interest.