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鈥檚 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鈥檚 other earnings deduct and pay PAYE tax and Class 1 National Insurance through payroll Salary sacrifice arrangements If the cost of employees鈥� personal bills is less than the amount of salary given up, report the salary amount instead. These rules don鈥檛 apply to arrangements made before 6 April 2017 - check when the rules will change .

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

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Expenses and benefits: personal bills

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

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Expenses and benefits: personal bills

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