Expenses and benefits: personal bills
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.
These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.