Reporting 2024/25 taxable expenses and benefits

If as an employer you provided employees with taxable expenses and benefits in the 2024/25 tax year, you will need to ensure that you meet your reporting obligations in respect of those benefits. This will include providing employees with Forms P11D and notifying HMRC via your end-of-year return. Getting this right matters: failing to report correctly can result in penalties, and your employees may face unexpected tax bills if benefits aren’t properly declared.

Understanding what counts as a taxable benefit

Not all expenses and benefits you provide to employees are taxable. However, if you do provide something beyond salary—whether it’s a company car, professional fees, gifts, or gym membership—the general rule is that it constitutes a taxable benefit unless a specific exemption applies.

Common taxable benefits include:

• Company cars and fuel
• Private medical insurance
• Professional subscriptions and exam fees
• Gifts to employees (over £50 per person per tax year)
• Relocation expenses (beyond the first £8,000)
• Interest-free or low-interest loans
• Accommodation provided free or at a reduced cost

HMRC publishes detailed guidance on the taxable value of specific benefits. For example, the benefit of a company car is calculated using the appropriate percentage of the car’s list price, taking into account CO₂ emissions and fuel type. It’s worth reviewing what you’re providing to employees to identify whether reporting will be necessary.

When you need to report on Form P11D

The threshold for reporting is important. If the total value of taxable benefits provided to an employee during the 2024/25 tax year exceeds £8,500, you must report those benefits on a Form P11D.

If benefits fall below this threshold, you don’t need to complete a P11D for that employee. However, benefits must still be accounted for in your payroll records and may need to be reported through your Real Time Information (RTI) submission if they’re treated as payrolled benefits.

Forms P11D must be submitted to HMRC by 6 July 2025 for the 2024/25 tax year. You’ll also need to provide a copy to each affected employee by the same deadline, giving them the information they need for their Self Assessment tax returns (if they file one).

Payrolled benefits and Real Time Information

An alternative approach is to payroll benefits. Under payrolling, certain benefits are assessed and taxed through the payroll rather than reported on a P11D. This can simplify administration, as you calculate the taxable value and deduct tax and National Insurance from pay throughout the year.

Not all benefits can be payrolled—company cars, van benefits, accommodation, and certain other benefits don’t qualify. However, many others (such as professional fees and subscriptions, mobile phones, and some relocation costs) can be payrolled if you choose to do so.

If you do payroll benefits, you’ll report them through your monthly or weekly RTI submissions, not on a P11D. This approach is often cleaner administratively, as there’s no separate end-of-year form to complete for those benefits.

Getting the detail right

Accurate reporting requires attention to detail. You’ll need to gather information about the nature and value of each benefit provided, apply the correct tax rules (which can vary depending on circumstances), and ensure your records support your figures.

Common pitfalls include:

• Failing to obtain adequate supporting documentation for the cost of benefits
• Misunderstanding which benefits qualify for exemptions
• Missing the reporting deadline
• Providing incorrect valuations to employees

If you’re uncertain about a particular benefit—or whether something counts as a benefit at all—it’s worth seeking clarification early. The cost of getting it wrong can be significant, both in terms of penalties and the time required to correct errors with HMRC.

Conclusion

Reporting taxable benefits correctly is an important part of your year-end compliance. Whether you use Forms P11D or payroll your benefits, the key is to keep proper records, understand the rules that apply to what you’re providing, and meet the reporting deadline.

If you’re managing multiple employees or a complex range of benefits, getting professional input can save time and reduce risk. For tailored advice, contact Severn Accounting — we’re here to help.