A late P11D can attract a penalty of up to £300 per form plus up to £60 a day while the failure continues, and an incorrect one up to £3,000 per form. A late P11D(b) is charged at £100 per month or part month for every 50 employees with benefits, and a careless or deliberate error on it can cost up to the Class 1A underdeclared. Errors are fixed with HMRC’s online P11D and P11D(b) correction forms, which must show the full corrected figures, not the difference.

What is the penalty for a late P11D?

Paragraph 25.14 of HMRC’s booklet 480 says an employer who fails to make a P11D return on time may incur a penalty not exceeding £300, with a further penalty not exceeding £60 a day if the failure continues. Those limits come from section 98(1) of the Taxes Management Act 1970, which applies to a range of special returns and information requirements. They are maximums applied per return, so an employer with several missing P11Ds has exposure on each one.

The filing date is 6 July after the end of the tax year, as explained in P11D and P11D(b) forms explained. Where an employer is registered to payroll benefits, booklet 480 says that failing to send them through real time information attracts the penalties for not reporting on or before the payment is made.

What is the penalty for a late P11D(b)?

The P11D(b) is the return of Class 1A National Insurance, and it has its own penalty regime set out in paragraph 25 of HMRC’s guide CWG5. The return is due by 6 July. If HMRC has not received it by 19 July, the penalty is £100 per month or part month of lateness, for every 50 employees, or part batch of 50, who were provided with benefits. If the failure continues beyond 12 months, there is an additional penalty of up to the amount of Class 1A paid late.

Illustration only. An employer with 120 employees receiving benefits files its P11D(b) on 30 September. That is three batches of 50 (50, 50 and 20), and the return is late for three months or part months after 19 July. The penalty would be 3 × £100 × 3 = £900, before any separate penalty for late payment of the Class 1A itself.

The P11D(b) is required even where every benefit is payrolled, so employers who have stopped filing P11Ds must not forget it.

What happens if a form is wrong?

Paragraph 25.15 of booklet 480 sets a maximum penalty of £3,000 per form for an incorrect P11D. Section 98(2) of the Taxes Management Act 1970 applies that limit where incorrect information is given fraudulently or negligently. For an employer registered to payroll benefits, an incorrect real time information return instead falls under the inaccuracy penalties in Schedule 24 to the Finance Act 2007, the same regime that applies to errors in tax returns.

For the P11D(b), CWG5 says a return made incorrectly, carelessly or deliberately, can attract a penalty of up to the difference between the Class 1A shown and the amount that should have been shown. Taking reasonable care is the main defence; see relying on an adviser and reasonable care for how HMRC approaches that question.

What if the Class 1A is paid late?

Late payment is separate from late filing. Class 1A is due by 22 July if paid electronically, or 19 July if a cheque is posted. CWG5 sets out the late payment penalties:

  • 5% of any amount unpaid 30 days after the due date;
  • a further 5% of any amount still unpaid 6 months after the due date; and
  • a further 5% of any amount still unpaid 12 months after the due date.

Interest runs from 19 July, or 22 July for an approved electronic payment, on late payments and on any underpayment later discovered by the employer or HMRC. CWG5 also points out that an employee making good a benefit after 6 July does not reduce the employer’s Class 1A. Employer payment penalties more generally are covered in PAYE late filing and payment penalties.

How do you correct a P11D or P11D(b) already sent?

GOV.UK says errors, earlier year reports and changes are made using two online forms: the P11D correction form and the P11D(b) correction form, and that both should be completed. Two rules about the figures are easy to get wrong:

  • P11D: show every benefit for that employee at its correct amount, not just the changed line. HMRC’s example is a P11D showing medical £300 and car £2,100 where the medical should have been £500; the correction shows medical £500 and car £2,100.
  • P11D(b): show the total Class 1A now due, not the extra amount. If £10,000 was declared and £500 was missed, the amended return shows £10,500.

CWG5 adds that where late information changes the Class 1A after payment, for example because a car turns out to have been unavailable for a period, the employer must send a revised P11D(b) and, where appropriate, revised P11Ds. Any additional Class 1A should be paid promptly to limit interest. It is also sensible to give the employee the corrected figures, because they affect the employee’s own tax position.

Where the error spans more than one year or also affects payroll, see correcting payroll errors from earlier years.

Can a penalty be appealed?

Yes. GOV.UK says an appeal against a direct tax penalty, which includes PAYE and National Insurance, is usually due within 30 days of the decision letter, and must say what is disagreed with and why. HMRC may then offer a review, and the matter can go on to the tax tribunal; see HMRC statutory review and the tax tribunal.

For a late return penalty, the usual ground is reasonable excuse. GOV.UK gives examples such as the death of a close relative shortly before the deadline, unexpected hospital stays, failure of software while preparing the return, problems with HMRC online services and unforeseeable postal delays. It lists as not reasonable: insufficient funds, finding the online system too difficult, not getting a reminder, and making a mistake on the return. The return must be filed as soon as the excuse ends.

How will mandatory payrolling change penalties?

HMRC’s draft guidance on mandatory payrolling says that for 2027 to 2028, errors relating to mandatory payrolling in real time information returns will not be penalised for inaccuracy unless there is evidence of deliberate non compliance, although late filing and late payment penalties still apply. The existing P11D and P11D(b) penalties are unchanged where those forms are still required, for example for loans and accommodation that are not payrolled. HMRC has said it will publish further detail on penalties and interest for later years.

What mistakes lead to penalties most often?

  • Filing the P11D(b) late because all benefits were payrolled and the employer assumed nothing was needed.
  • Paying Class 1A without the correct year suffix in the payment reference, so it is allocated to the wrong year.
  • Correcting a P11D(b) with only the difference, which understates the total due.
  • Leaving a known error uncorrected, so interest keeps running on any Class 1A underpaid.
  • Assuming that HMRC not sending a reminder is a reasonable excuse.

A full list of HMRC’s penalty regimes is in the HMRC penalties table.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.