6.4 Payroll Forms, P11D Reporting & Payrolling Benefits
Key Takeaways
- A new starter without a P45 completes a starter checklist, which tells the employer which statement applies and therefore which tax code and student loan plan to operate.
- Form P45 has parts 1, 1A, 2 and 3: part 1 goes to HMRC through the FPS, part 1A is kept by the employee, and parts 2 and 3 go to the new employer.
- Form P60 must be given to every employee still employed on 5 April by 31 May following the end of the tax year.
- Form P11D reports benefits in kind that have not been payrolled, and P11D(b) declares the employer's Class 1A liability; both are due by 6 July, with the Class 1A NIC payable by 22 July electronically.
- Payrolling benefits taxes the benefit through the payroll in real time and removes the need for a P11D for those benefits, but the employer still files a P11D(b) and still pays Class 1A NIC.
6.4 Payroll Forms, P11D Reporting & Payrolling Benefits
The AAT scope of content lists the payroll forms explicitly: starter checklist, payslips, P45s, P60s, P11Ds and P11Dbs. It also asks for the requirement to produce and distribute forms within the required time period, and the difference between reporting expenses and benefits on a P11D and payrolling benefits and expenses. This section is the reference for all of that.
1. The Forms at a Glance
| Form | Purpose | Who gets it | Deadline |
|---|---|---|---|
| Starter checklist | Captures a new employee's circumstances when no P45 is available | Completed by employee, retained by employer | Before the first payment |
| Payslip | Itemised statement of pay and deductions | Every employee, every pay period | On or before payday |
| P45 | Records pay and tax to the date of leaving | Employee on leaving; parts 2 and 3 to the new employer | On the leaving date |
| P60 | End-of-year certificate of pay, tax and NIC | Every employee employed on 5 April | 31 May following the tax year end |
| P11D | Reports benefits in kind not payrolled | Employee and HMRC | 6 July following the tax year end |
| P11D(b) | Employer's declaration and Class 1A NIC return | HMRC | 6 July following the tax year end |
And the payment that follows the P11D(b):
| Payment | Deadline |
|---|---|
| Class 1A NIC on benefits | 22 July electronically (19 July if paying by post) |
2. The Starter Checklist
When a new employee arrives without a P45 — a first job, a return from a career break, or simply a lost form — the employer asks them to complete a starter checklist. It captures name, address, date of birth, National Insurance number, start date, student loan position, and, critically, which of three statements applies:
| Statement | Meaning | Effect |
|---|---|---|
| A | This is their first job since 6 April and they have had no other taxable income | Standard cumulative code, normally 1257L |
| B | This is now their only job, but they have had another job or taxable state benefit since 6 April | Standard code on a week 1 / month 1 basis |
| C | They have another job or receive a pension | BR code — basic rate on all earnings, no personal allowance |
The checklist is not sent to HMRC. It is retained by the employer as the evidence for the code operated, and the information feeds the first FPS. HMRC then issues a corrected code on a P6 notice if it disagrees.
⚠️ EXAM TRAP: The starter checklist replaced the old form P46. If a question refers to a P46, it is describing a pre-2013 process.
3. Form P45
A P45 is produced when an employee leaves. It shows the leaving date, the tax code in use, total pay to date and total tax to date for the tax year, plus student loan indicators.
| Part | Goes to | Purpose |
|---|---|---|
| Part 1 | HMRC | Sent electronically as part of the FPS reporting the leaver |
| Part 1A | The employee | The employee's own copy, for their records and their tax return |
| Part 2 | The new employer | Retained by the new employer |
| Part 3 | The new employer | Completed and submitted to HMRC through the new employer's FPS |
The P45 must be given to the employee on the leaving date, or as soon as reasonably practicable afterwards. An employer must not issue a P45 in advance of the leaving date, and must not give a duplicate — if a P45 is lost, the new employer uses a starter checklist instead.
4. Form P60
The P60 is a certificate of pay, tax and National Insurance for the tax year. It goes to every employee who was in employment on 5 April, and must be provided by 31 May following the year end. It can be issued on paper or electronically.
It shows total gross pay for the year, total PAYE deducted, employee NIC by earnings band, the final tax code, student loan deductions, and any statutory payments. An employee needs it to claim a tax refund, support a mortgage application, or complete a self assessment return.
An employee who left before 5 April gets a P45, not a P60.
5. Benefits in Kind: P11D or Payrolling?
Benefits in kind — company cars, private medical insurance, interest-free loans over £10,000, gym memberships — are taxable on the employee and attract Class 1A National Insurance payable by the employer at 15% for 2025/26. There are two ways to deal with them.
Route A: Report on a P11D
The employer does nothing during the year, then after the year end:
- Files a P11D for each employee with reportable benefits, by 6 July.
- Files a P11D(b) declaring the total Class 1A liability, by 6 July.
- Pays the Class 1A NIC by 22 July (19 July by post).
- HMRC collects the employee's income tax by adjusting their tax code in a later year, so the employee pays the tax up to two years after receiving the benefit.
Route B: Payroll the benefit
The employer registers with HMRC before the start of the tax year and then:
- Adds the cash equivalent of the benefit, divided across the pay periods, to taxable pay each period.
- Deducts the income tax through PAYE in real time, so the employee pays as they receive the benefit.
- No P11D is needed for the payrolled benefits.
- A P11D(b) is still required, and Class 1A NIC is still payable by the same deadlines. Payrolling changes when the income tax is collected, not the employer's NIC.
- Employees must be given a written statement of the payrolled benefits by 1 June following the tax year end.
Comparison
| P11D route | Payrolling route | |
|---|---|---|
| When income tax is collected | Later, via a tax code adjustment | In real time, through PAYE |
| P11D required | Yes | No, for the payrolled benefits |
| P11D(b) required | Yes | Yes |
| Class 1A NIC | Payable by 22 July | Payable by 22 July |
| Registration | None | Must register with HMRC before the tax year starts |
| Employee experience | Surprise tax code changes and underpayments | Smooth, predictable deductions |
Direction of travel: HMRC has announced that payrolling of benefits in kind will become mandatory for most benefits, so the P11D route is being phased out over time. For this unit, know that both routes currently exist, know what changes between them, and know that Class 1A NIC and the P11D(b) survive in both.
Benefits that cannot be payrolled
A small number remain outside payrolling and still require a P11D — most notably employment-related loans and living accommodation provided to the employee.
6. Consequences of Missing the Deadlines
| Failure | Consequence |
|---|---|
| Payslip not provided on or before payday | Employment tribunal claim by the employee |
| P60 not provided by 31 May | Penalty, and the employee cannot evidence their tax position |
| P11D / P11D(b) filed after 6 July | £100 per 50 employees per month of delay |
| Class 1A NIC paid after 22 July | Late payment penalties and interest |
| P45 not issued on leaving | The new employer must use a starter checklist, often putting the employee on an emergency code and causing an overpayment of tax |
7. Worked Scenario
Scenario: Fenwick Design Ltd has 30 employees. For 2025/26 it provided private medical insurance costing £420 per employee to 10 staff, and one company car with a cash equivalent of £6,300. It has not registered to payroll benefits.
What must it do, and by when?
- P11Ds for the 11 affected employees, reporting the medical insurance and the car benefit, filed with HMRC and copied to each employee by 6 July 2026.
- P11D(b) declaring the total Class 1A liability, by 6 July 2026.
- Total benefits: $(10 \times £420) + £6,300 = £4,200 + £6,300 = £10,500$
- Class 1A NIC at 15%: $£10,500 \times 15% = \mathbf{£1,575}$
- Pay £1,575 to HMRC by 22 July 2026 electronically.
- P60s for all 30 employees still employed on 5 April 2026, by 31 May 2026.
If Fenwick wants to payroll these benefits for 2026/27 instead, it must register with HMRC before 6 April 2026 — it cannot start mid-year.
A new employee starts work and cannot produce a P45. They tell the employer that they have another job elsewhere. Which starter checklist statement applies and what code should be operated?
Which parts of a Form P45 does a departing employee take to their new employer?
An employer has registered to payroll its benefits in kind. Which statement is correct?
An employer provides benefits with a total cash equivalent of £10,500 for 2025/26 and reports them on P11Ds. What Class 1A National Insurance is due and by when must it be paid electronically?