How to Report Company Cars and Medical Insurance on Form P11D (2025/26)
Learn how to report company cars and private medical insurance on your P11D form for the 2025/26 tax year, with current BIK bands and Class 1A NIC rates.
To report benefits in kind on a P11D for the 2025/26 tax year, employers must calculate the car benefit charge based on list price and carbon dioxide emissions for entry under Section F, while private medical insurance premium costs are calculated and entered under Section I. These individual values are then compiled on a P11D(b) form to calculate the associated employer National Insurance contribution.
Key Takeaways: Reporting Benefits for 2025/26
Employers must prepare for critical deadlines and regulatory changes during this tax year. The transitioning framework requires close attention to the following key administrative milestones:
- The online filing deadline for submitting forms P11D and P11D(b) is 6 July 2026.
- Employers must distribute physical or digital copies of the P11D forms to their employees by 6 July 2026.
- The deadline for cleared electronic payment of Class 1A National Insurance Contributions is 22 July 2026.
- Class 1A National Insurance is calculated at a rate of 15% on the cash equivalent value of the benefits.
- The 2025/2026 tax year represents the final full reporting cycle before the mandatory payrolling of benefits begins in April 2027.
How do I report benefits in kind on a P11D for a company car and medical cover?
To report these common benefits in kind, you must enter company cars in Section F and private medical insurance in Section I of the online P11D. The car benefit requires calculating a cash equivalent using the car's list price and emissions data, whereas medical cover simply requires reporting the actual premium paid.
Employers must calculate these figures accurately to ensure correct National Insurance contributions are paid on form P11D(b). Correct division of records prevents penalties and duplicate charge inquiries from HM Revenue and Customs.
What is a P11D form and why is the 2025/26 tax year significant?
A P11D form is an official tax document used by United Kingdom employers to report statutory benefits in kind, which are non-cash products or services like company cars and medical insurance, provided to employees and directors outside of traditional payroll mechanisms.
This specific 2025/26 tax year is highly significant because it serves as the final transitional annual cycle before HMRC makes the payrolling of expenses and benefits in kind fully mandatory. From April 2027, the traditional year-end P11D filing system will be replaced by real-time payroll deductions.
How to calculate and report company car benefit in Section F
Calculating the car benefit charge requires determining the product of the car's P11D value and its graduated carbon dioxide emission percentage. You must establish the final cash equivalent by adjusting for partial availability and employee contributions before entering the figure.
The sequential calculation steps to derive the exact company car tax value are as follows:
- Find the car list price including all optional accessories and VAT to establish the base P11D value.
- Deduct any capital contribution made by the employee toward the purchase of the car, up to a maximum statutory limit of £5,000.
- Match the vehicle carbon dioxide emissions to the relevant Benefit in Kind percentage band for the 2025/26 tax year.
- Apportion the value on a pro-rata daily basis if the vehicle was unavailable for use during any section of the tax year.
- Subtract any formal payments made directly by the employee for the private use of the company car.
What are the 2025/26 CO2 BIK percentage bands?
Employers must refer to HMRC's established 2025/26 BIK percentage tables to assign correct parameters to vehicle emissions. The bands encourage lower-emission options through reduced tax percentages.
| Fuel Type | BIK Rate (2025/26) |
|---|---|
| Pure Electric (EV) | 3% |
| Plug-in Hybrid (depending on range) | 6% to 19% |
| Petrol / Diesel (low emissions) | 23% and above |
| Petrol / Diesel (high emissions) | Up to 37% |
How to calculate the car fuel benefit charge
To calculate the fuel benefit charge, you must multiply the fixed UK tax year multiplier of £28,200 by the vehicle's specific CO2 percentage. This statutory multiplier remains constant for all vehicle types under Section F.
For example, if a company car has a calculated BIK rate of 20%, the fuel benefit value is £5,640, which is £28,200 multiplied by 20%. This separate taxable value must be declared alongside the standard vehicle benefit on the form.
How to calculate and report private medical insurance under Section I
To report private medical insurance, calculate the actual cost of the insurance premium paid by the business during the tax year. There are no complex formulas or emissions metrics required when filing inside Section I.
Employers must include the complete expense incurred, which extends to any cover provided for the employee's spouse or dependants. The figure must represent the gross price, including non-recoverable Value Added Tax and Insurance Premium Tax.
How do you calculate Class 1A NIC on the P11D(b)?
Calculate the Class 1A NIC liability by applying the flat 2025/26 rate of 15% to the combined sum of all reportable benefits. This total includes the values determined in both Section F and Section I of the forms.
For example, if an employer reports a company car benefit of £9,920 and a private medical insurance premium of £1,800, the combined value equals £11,720. Applying the 15% Class 1A National Insurance rate returns a total tax bill of £1,758 due to HMRC.
What are the key P11D and P11D(b) deadlines for 2026?
Employers must meet the deadlines in the summer of 2026 to avoid financial penalties from HMRC. Late submissions or late payments of Class 1A contributions automatically trigger statutory interest charges.
| Required Administrative Action | Statutory Deadline Date |
|---|---|
| Submit completed P11D and P11D(b) forms online | 6 July 2026 |
| Provide physical or digital P11D copies to employees | 6 July 2026 |
| Pay Class 1A National Insurance via electronic transfer | 22 July 2026 |
What common P11D reporting errors must employers avoid?
To safeguard corporate data integrity and protect employees from incorrect taxation, employers must review their P11D submissions carefully. Small structural omissions can result in formal audits or double-taxation events.
- Failing to reduce the car benefit value on a pro-rata basis when a company vehicle was unavailable for part of the year.
- Failing to adjust the base car value for capital contributions made by employees up to the valid £5,000 threshold.
- Omitting additional family member premiums when calculating the total cost of private medical insurance.
- Incorrectly declaring benefits on the P11D that have already been put through real-time payroll, causing duplicate taxation.
- Excluding Value Added Tax from the reported insurance premium totals when the tax cannot be recovered by the business.
What is the maximum deductible amount for an employee's capital contribution towards a company car?
The maximum deductible amount from the list price for an employee's capital contribution towards a company car is £5,000.
Do I need to include VAT when reporting private medical insurance premiums on the P11D?
Yes, you must include the full insurance cost including VAT and any other auxiliary taxes even if the VAT is unrecoverable by the business.
What is the Class 1A National Insurance rate for the 2025/26 tax year?
The Class 1A National Insurance rate for the 2025/26 tax year is set at a flat rate of 15%.
When does payrolling of company cars and medical insurance become mandatory in the UK?
Payrolling of company cars and private medical insurance will become mandatory starting in April 2027.
How do I apportion the company car benefit if the vehicle was only available for half of the tax year?
You apportion the company car benefit by dividing the total number of days the vehicle was available by 365, then multiplying this ratio by the full calculated annual benefit charge.