Employer Y/E Reporting 2025/26
As the 2025/26 tax year comes to an end, UK employers must meet a range of employment tax reporting and payment obligations. Year end compliance can be complex, particularly where employee benefits and expenses are involved.
This guide outlines the key employer year end reporting requirements, including P11Ds, PAYE Settlement Agreements, Class 1A and Class 1B National Insurance, and upcoming changes to the mandatory payrolling of benefits.
Employee benefits and expenses are reported to HM Revenue and Customs through one of the following methods:
- P11D Forms
- PAYE Settlement Agreements. PSA
- Payrolling of benefits through payroll
P11D reporting requirements for 2025/26
A P11D form is used to report taxable benefits and expenses provided to employees during the tax year.
Common examples include:
- Company cars and fuel
- Private medical insurance
- Living accommodation
- Certain reimbursed expenses
P11D deadlines for 2025/26
Employers must:
- Provide employees with a copy of their P11D by 6 July 2026
- Submit the P11D and P11D (b) to HMRC by 6 July 2026
The P11D (b) summarises all benefits reported on P11Ds, including any payroll benefits. It is used to calculate the employer’s Class 1A National Insurance contributions.
Class 1A National Insurance – Rates and Deadlines
For the 2025/26 tax year, Class 1A National Insurance is charged at 15% on taxable benefits.
Payment is due by:
- 22 July 2026. If paying electronically
- 19 July 2026. If paying by post
Where a PAYE Settlement Agreement is in place, benefits covered by the PSA should not be included on P11Ds.
Mandatory payrolling of benefits from April 2027
End of most P11Ds
From April 2027, most employee benefits will be subject to mandatory payrolling. This means income tax on benefits collected in real time through PAYE, removing the need for most year end P11Ds.
As a result, 2026/27 will be the final full tax year in which P11Ds are widely required.
Further technical guidance is expected from HMRC later this year!
Expectation to mandatory payrolling
Two benefits are excluded from mandatory payrolling from April 2027:
- Beneficial loans
- Living accommodation
These can still be reported via P11D or voluntarily payrolled. These benefits can be complex to value, especially where balances fluctuate or official interest rates change during the year.
Employer responsibilities under payrolling
Where benefits are payrolled, employers must:
- Identify which benefits will be payrolled
- Calculate the taxable value during the tax year
- Include the value in payroll
- Apply the correct income tax and National Insurance through the Full Payment Submission – FPS
This ensures tax is collected in real time under PAYE and reduces year end reporting requirements.
PAYE Settlement Agreement – PSA rules and deadlines
What is a PAYE Settlement Agreement?
A PAYE Settlement Agreement allows an employer to settle the income tax and National Insurance due on certain benefits and expenses on behalf of employees. On a grossed up basis.
Benefits included in a PSA are not reported on the employee’s P11D.
Common items included in a PSA
Staff entertaining. For example Christmas parties
Long service awards
Non contractual gifts. Such as wedding or birthday gifts
PSA deadline for 2025/26
The deadline to apply for a PSA for the 2025/26 tax year is 5 July 2026.
If the application is made after the end of the tax year, some benefits may still need to be reported on a P11D. Particularly if already reflected in tax codes or payroll deductions.
Once HMRC agrees the PSA:
A PSA return must be submitted
Tax and Class 1B National Insurance must be paid by 22 October 2026. Or 19 October if paying by post
For 2025/26, Class 1B National Insurance is charged at 15%.
Key employer Year End deadlines 2026
- 22 April 2026 – Final PAYE and National Insurance Payment
- 31 May 2026 – Short term business visitors report
- 5 July 2026 – PSA application deadline
- 6 July 2026 – P11D and P11D(b) submission deadline
- 22 July 2026 – Class 1A National Insurance payment
- 22 October 2026 – SA tax and Class 1B National Insurance payment
Employer YE Reporting – How Everett King can help
Year end employment tax compliance places significant administrative and financial responsibility on employers. Missing key deadlines can result in penalties, interest, and increased scrutiny from HMRC.
By planning ahead and reviewing your benefits, payroll processes and reporting obligations early, you can reduce risk and ensure full compliance/
If you require support with P1Ds, PAYE Settlement Agreements, payrolling of benefits or employer YE reporting, Contact Heather Jordan our Payroll Expert and she will guide you through the relevant next steps.