If you provide a benefit in kind to an employee, director, or relative of an employee, then you may have an obligation to pay Class 1A National Insurance.

Class 1A National Insurance is an employer-only liability.

If a benefit is subject to tax, Class 1A National Insurance is payable.

If no tax is due on a benefit, Class 1A National Insurance is not payable.

Types of benefits that attract Class 1A National Insurance include:

More benefits can be found here.

If a benefit is subject to Class 1 National Insurance (paid via the payroll), then no Class 1A National Insurance is due.

Class 1A National Insurance is usually 13.8% of the end of your taxable benefit total.

For example, if you provide £12,000 of private medical insurance for the tax year, then the Class 1A National Insurance is £12,000 x 13.8% = £1,656.

You must report Class 1A National Insurance to HMRC by submitting a P11D(b) form on or before 6 July following the end of the tax year.

This form tells HMRC the value of the taxable benefits and the amount of Class 1A National Insurance due.

Class 1A National Insurance is due to be paid to the HMRC by 22 July following the end of the tax year.

If you payroll your benefits, your Class 1A NIC is calculated each month within Payfit but should not be paid until the end of the tax year.

You should see the liability appear on your PAYE for employers online account between 6 July and 22 July.

It will show on your Annual statement for the previous tax year, in this case for this year 23-24. At the top, you'll see Bill for P11D for Class 1A National Insurance. This is the amount that HMRC has calculated after receiving your P11D submissions.

If paying electronically, your payment of Class 1A national insurance must clear into HMRC’s bank account by 22 July following the end of the tax year. For cheque payments, it's 19 July.

When paying electronically, you need to allow enough time for HMRC to have cleared funds by 22 July. You can pay using a number of different payment methods, including Faster Payments that clear on the same or next day. However, beware that some electronic payment methods can take 3 banking days or more to reach their account.

To pay in July 2024 for your 2023 to 2024 Class 1A National Insurance contributions, you’ll need to add 2313 to the end of your Accounts Office reference.

24 is for the tax year ending 2024 and 13 is for the 13th payment in the tax year, i.e., the Class 1A national insurance.

E.g., if your accounts office reference is 123PA00012345, add 2413 to create a new reference of 123PA000123452413 (no spaces).

If you don't include the final four digits, HMRC will allocate the payment to your current tax year's liability and send a demand for your Class 1A national insurance contributions payment.

For further information, please refer to HMRC's guidance to making Class 1A payments.

If your Class 1A National Insurance payment is not made on time, HMRC may charge you the following penalties: