If you’re a dental practice owner with employees or directors, the P11D is probably one of those forms that rolls around every summer and causes a mild panic. What counts as a benefit in kind? Did we miss anything? What do we actually need to declare?

The good news is that the P11D is straightforward once you know what you’re looking for. The more interesting news is that the way benefits in kind are reported is about to change significantly – and the sooner you understand what’s coming, the less disruption it will cause to your practice.

Let’s take it from the beginning.

What is a P11D?

A P11D is a form you submit to HMRC after each tax year to report any non-cash benefits or expenses you’ve provided to employees or directors, over and above their salary. The information tells HMRC what additional taxable value each person has received, so they can collect the income tax due, usually by adjusting the employee’s tax code in the following year.
You also need to submit a P11D(b), which is the companion form used to declare and pay Class 1A National Insurance on those benefits. This sits with you as the employer, not the employee.
The deadline for both is 6 July following the end of the tax year. Miss it, and HMRC’s automatic penalties kick in, £100 per 50 employees for every month (or part month) you’re late, plus interest on any late Class 1A NIC.

What needs to go on a P11D?

Broadly, any non-cash benefit you provide to an employee or director that has a taxable value needs to be reported. Here are the most common ones we see in dental practices:

Private medical or dental insurance

If you pay for health cover for your staff or yourself as a director, this is a taxable benefit in kind. The value to report is the amount paid by the employer in the tax year.

Company cars and fuel

If a car is available for private use, even just for the commute, it’s a benefit in kind. The taxable value is calculated using the car’s list price, its CO2 emissions, and a percentage set by HMRC each year. Fuel paid for by the employer for private mileage is an additional benefit.

Company vans

Vans are treated quite differently from cars for benefit in kind purposes. Rather than using a percentage of the vehicle’s list price, HMRC applies a flat annual charge to any van that is available for private use. For 2026/27 that flat charge is £4,170 (up from £4,020 in 2025/26). A higher-rate taxpaying employee with a van available for private use would pay income tax of £1,668 on that benefit for the year. If the employer also pays for fuel used on private journeys, there is a separate flat fuel benefit charge of £757 for 2026/27. Zero-emission electric vans continue to attract a nil charge, making them considerably more tax-efficient than petrol or diesel equivalents.

The van benefit charge only applies where there is private use. If an employee genuinely uses the van only for work, travelling between the practice and suppliers, for example, and any private use is insignificant, no benefit arises and nothing needs to be reported.

Low or interest-free loans

If you’ve taken a director’s loan from your limited company at a rate below HMRC’s official rate (currently 2.25%), the difference between what you’re paying and the official rate is a benefit in kind and must be declared on a P11D. The same applies to employee loans.

Living accommodation

If you provide accommodation to an employee (or yourself), this is generally a taxable benefit, although there are some exceptions where accommodation is necessary for the role.

Gym memberships and subscriptions

These are benefits in kind unless the gym is on-site and available to all staff equally. A membership paid for at an external gym is taxable.

Non-trivial gifts and vouchers

HMRC has a trivial benefits exemption for gifts under £50 per item that are not cash or cash vouchers, not a reward for performance, and not contractual. Above that threshold – or if the conditions aren’t met – the value needs to be declared.

Professional subscriptions

GDC registration fees and approved professional subscriptions are generally exempt. But subscriptions that don’t appear on HMRC’s approved list, or personal memberships, may need to be reported.

Mobile phones

One mobile phone provided to an employee is exempt from reporting. A second phone, or a phone provided primarily for personal use, is a benefit in kind.

Work-related training

Generally exempt, as long as the training is relevant to the employee’s current role. This is good news if you’re putting your dental nurses or associates through CPD, as long as it relates to their dentistry work, there’s no benefit in kind to report.

What doesn’t need to go on a P11D?

Not everything you provide to your team is taxable. Some things are specifically exempt, including:

• Workplace parking
• Canteen meals available to all staff
• Pension contributions made by the employer (reported separately)
• The first £8,000 of a qualifying removal or relocation package
• Eye tests and corrective glasses required for VDU work
• Annual staff parties, as long as the cost is £150 or less per head per year

If you’re unsure whether something you provide crosses the line into taxable territory, it’s always worth checking before the year end, not after.

The big change coming: mandatory payrolling of benefits

Here’s what you really need to be aware of. The P11D, at least in its current form, is on its way out.

From 6 April 2027, HMRC is making the payrolling of benefits in kind mandatory for almost all employers. Instead of reporting benefits once a year on a P11D after the tax year ends, you’ll need to include the taxable value of benefits through your payroll in real time – every pay period, throughout the year.

The tax on those benefits will be deducted from employees’ pay each month, in the same way as income tax on salary. HMRC will stop adjusting employees’ tax codes for benefits, because the tax will already be accounted for in the payroll.

This was originally planned for April 2026, but HMRC delayed it by twelve months to give employers and software providers more time to prepare. That extra year is useful but it’s not as long as it sounds.

What’s changing:

• Benefits are taxed in real time through payroll, not via a tax code adjustment the following year
• Class 1A National Insurance will be paid monthly rather than in one lump sum each July
• The P11D will effectively be abolished for most benefits
• You’ll report benefits through your Full Payment Submission (FPS), the same mechanism you already use to report salaries to HMRC

What’s staying the same (for now):

Two benefits will not be included in mandatory payrolling initially:

• Employment-related loans (including overdrawn director loan accounts)
• Living accommodation

You’ll still be able to report these on a P11D, or choose to payroll them voluntarily if you register to do so. HMRC has said it will extend mandatory payrolling to these benefits in due course, though no firm date has been given.

The double-tax problem in 2026/27

There’s a practical wrinkle worth knowing about, particularly if you’re thinking of getting ahead of the mandatory deadline by adopting payrolling voluntarily this year.

When a benefit is currently reported via P11D, the employee pays tax on it the year after they received it — via a tax code adjustment. If you switch to payrolling benefits mid-stream, an employee who had benefits in 2025/26 (which will still be collected via their 2026/27 tax code) could find themselves being taxed on two years of benefits at once: last year’s through their code, and this year’s in real time through payroll.

This won’t affect everyone equally, but it’s worth being aware of as a heads-up prior to payday is far better than a surprise.

What should dental practice owners be doing now?

The P11D deadline for 2025/26 is 6 July 2026, and Class 1A NIC must reach HMRC by 19 July 2026 (22 July if paying electronically). If you haven’t submitted yet, now is the time to make sure your records for the year are complete and accurate.

Looking ahead to the mandatory changes in April 2027, there are a few things worth doing now:

• Review what benefits you currently provide and make sure you have accurate records of their values throughout the year — not just at year end
• Talk to your payroll software provider to understand whether they’ll be ready for mandatory payrolling in 2027, and what additional data they’ll need from you
• Consider communicating early with your team about what the change will mean for their payslips, particularly if they receive benefits like a company car or private health cover

If any of this feels like a lot to navigate alongside running a busy practice, that’s entirely understandable, because it is. Our payroll and accountancy team work with dental practice owners every day on exactly these questions. If you’d like to talk through what your P11D looks like for this year, or how to prepare for the changes ahead, get in touch and we’ll take it from there.