Meet Jane, the finance manager for a growing tech startup in Manchester. As the business scaled in 2024, it began offering more employee perks—like company cars, private medical insurance, and even a few generous termination packages. All these benefits meant one thing come summer 2025: Class 1A National Insurance contributions (NICs) needed to be paid, and on time.
What Are Class 1A NICs?
Class 1A NICs are charges employers must pay on the value of most taxable employee benefits. These typically include:
Company cars
Private health insurance
Gym memberships
Termination payments over £30,000 (if Class 1 NICs haven’t already been applied)
Why It Matters:
Jane knew from previous years that missing the Class 1A NICs deadline could trigger penalties from HMRC. So she marked the following dates in bold on her calendar:
6 July 2025 – Deadline to submit forms P11D and P11D(b), which report employee benefits
19 July 2025 – Final date for postal cheque payments to reach HMRC
22 July 2025 – Deadline for electronic payments to clear in HMRC’s account
Importantly, the payment due in July 2025 relates to benefits provided during the 2024/25 tax year, a common source of confusion for many employers.
Getting the Details Right:
To make sure her company’s payment was properly allocated, Jane used the company’s Accounts Office reference number and added the correct suffix to indicate the tax year and month. This avoided any potential misallocation and ensured a smooth filing.
Don’t Leave It Late:
Had Jane missed the deadline, the business could have faced interest charges and late payment penalties, eating into funds better used for growth or staff development.
Takeaway:
Whether you're managing payroll for a small business or a large corporation, staying on top of Class 1A NICs is non-negotiable. Review your employee benefits, meet the key July deadlines, and use the right references when paying.
Just like Jane, a little preparation now can save a lot of stress later.
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