P11D and business travel: what goes on it, the deadlines, and payrolling from April 2027

A P11D is the form an employer files after the tax year to report taxable expenses and benefits that were not taxed through payroll. Most business travel never reaches it: travel paid at actual cost, or at HMRC’s benchmark rates, is exempt and does not have to be reported at all. What does reach it is the travel that falls outside those routes, plus benefits such as company cars and medical cover. And the form itself is being phased out: HMRC will make payrolling of benefits mandatory from 6 April 2027 for the first group of benefits and from 6 April 2028 for most of the rest.

Does it go on the P11D? Business travel, item by item

The split is not about whether something is travel. It is about how it was paid. The same hotel night is off the form when reimbursed at cost for a business trip, and on it when it is part of a commute to a permanent workplace or covered by an unapproved flat allowance. The mileage rows are on HMRC mileage rates; the commuting line is on travel expenses and tax.

What the P11D is, in HMRC’s words

• Per employee: “Complete a P11D for each employee you’ve provided with taxable expenses or benefits that were not payrolled.”
• The employer’s summary: “You must also submit an online form to HMRC at the end of the tax year for any Class 1A National Insurance you owe. This is called a P11D(b).”
• How to file: “If you have fewer than 500 employees, fill in and submit the forms through HMRC’s PAYE Online service.” “If you have more than 500 employees, fill in and submit the forms through your payroll software.” “HMRC will only accept paper forms if you have stopped trading.”
• Small items: “For ‘minor’ expenses or benefits, you might be able to make a one-off payment, known as a PAYE Settlement Agreement.”

The deadlines

“You’ll get a penalty of £100 per 50 employees for each month or part month your P11D(b) is late.” And when correcting a P11D(b): “If you’re correcting a P11D(b), include the total amount of Class 1A National Insurance you need to pay - not the difference from your previous version.”

Why most business travel is not reported: the exemption

Chapter 7A of ITEPA 2003, inserted by the Finance Act 2015, takes reimbursed business expenses out of the tax charge altogether where the employee could have claimed the deduction themselves:

GOV.UK turns that into two routes. You do not have to report business travel, phone bills, business entertainment, or uniform and tools, if you are either:

And the old dispensation system is gone: “Exemptions have replaced dispensations. You cannot apply for a dispensation any more.”

Benchmark rates and bespoke rates

A benchmark rate is one HMRC publishes — the UK meal allowances and the overseas subsistence table are examples, on travel expenses and tax and overseas subsistence rates. A bespoke rate is one an employer applies for, and HMRC approves it only on this test:

Approval runs for a fixed period, with the end date “that day not being later than the end of the period of 5 years beginning with the day on which the approval takes effect”.

The checking condition

The exemption is conditional on a working control system. GOV.UK says you must have a system to check payments at benchmark or bespoke rates, and is blunt about one point: “Your employees cannot check their own expenses.” For travel it also sets the evidence standard: “You reimburse an employee’s travel expenses - you’ll need to keep a record of when and why the employee travelled, and where possible keep receipts as evidence.” A travel management company’s booking data is one of the easier ways to meet that, because the when and where are already recorded.

Payrolling instead of a P11D — and what changes in 2027

Employers have been able to tax benefits through payroll voluntarily. That service has now closed to new registrations: “You can only use the online service if you registered to payroll benefits and expenses before 6 April 2026.” Some benefits could never be payrolled under it: “You cannot payroll: living accommodation provided by you as an employer interest free and low interest (beneficial) loans”.

What replaces it is compulsory, and it has been split into two phases:

Then phase 2: “As part of phase 2, the mandatory payrolling of most other BiKs will be introduced from April 2028. This excludes loans and accommodation which will remain voluntary.”

What this means for travel

• Exempt travel stays exempt. Nothing in the payrolling change makes reimbursed business travel reportable. It changes how taxable items are reported, not which items are taxable.
• Taxable expenses move into payroll from 2027. An unapproved flat travel allowance, or a commuting cost paid by the employer, would be taxed month by month instead of on a P11D.
• Company cars and travel medical cover are in phase 1.
• Globally mobile staff: “Employers will have the option to voluntarily exclude globally mobile employees from mandatory payrolling from 6 April 2027 through a new service that will be available from November 2026.”

HMRC’s stated aim is that “3.5 million people will no longer have their Income Tax collected in arrears”. One caution, in HMRC’s own words: “The legislation contained within this publication has not been laid before Parliament.” The dates above are HMRC’s published plan as read on 2026-09-26, not enacted law, and we will update this page when the legislation is published.

A checklist for the finance team

• List every travel payment route and mark each as actual cost, benchmark rate, approved rate or none of these. Only the last reaches the P11D.
• Make sure no one approves their own claims.
• Keep travel records for 3 years after the tax year.
• Plan payroll changes for company cars, fuel and medical cover before 6 April 2027.
• Watch for HMRC’s final phase 1 guidance and the legislation, both planned for Autumn Budget 2026.

Staff parties and client entertainment have their own P11D rules, set out on staff parties and client entertainment; relocation has an £8,000 exemption, on relocation expenses. This page reproduces GOV.UK guidance and legislation as read on 2026-09-26; it is not tax advice.

Common questions