What to report and pay

What you need to report and pay depends on who arranges for the supply of goods or services and who pays the supplier. You arrange the goods or services and pay the supplier directly You must: report the cost on form P11D pay Class 1A National Insurance on the value of the benefit Your employee arranges the goods or services, but you pay the supplier directly You must: report the cost on form P11D add the full cost to the employee’s earnings and deduct Class 1 National Insurance (but not PAYE tax) through payroll Your employee arranges and pays the supplier, but you reimburse them The amount you reimburse counts as earnings, so: add it to your employee’s other earnings deduct and pay PAYE tax and Class 1 National Insurance through payroll Salary sacrifice arrangements If the cost of employees’ personal bills is less than the amount of salary given up, report the salary amount instead.

The following guides contain more detailed information: earnings of employees and office holders: payment of bills employers paying employee’s debt: the pecuniary liability principle

Expenses and benefits: personal bills

Overview

As an employer, you have certain tax, National Insurance and reporting obligations if you cover the costs of your employees’ personal bills for goods or services.

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Expenses and benefits: personal bills

Overview

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