Guide

Expenses and benefits: relocation costs

Last updated: 7 December 2017

What to report and pay

You don't have to report or deduct anything for qualifying costs up to £8,000.

Qualifying costs over £8,000

Who gets the benefit What to do What to deduct or pay
Employees earning at a rate of less than £8,500 a year Report on form P9D Nothing
Employees earning at a rate of £8,500 or more a year Report on form P11D Class 1A National Insurance on the amount above £8,000
Directors Report on form P11D Class 1A National Insurance on the amount above £8,000

Non-qualifying benefits that you arrange and pay the supplier directly

Who gets the benefit What to do What to deduct or pay
Employees earning at a rate of less than £8,500 a year Report on form P9D Nothing
Employees earning at a rate of £8,500 or more a year Report on form P11D Class 1A National Insurance on the cost to you
Directors Report on form P11D Class 1A National Insurance on the cost to you

Non-qualifying benefits that your employee arranges, but you pay the supplier directly

Who gets the benefit What to do What to deduct or pay
Employees earning at a rate of less than £8,500 a year Report on form P9D Add the cost to the employee's other earnings and deduct and pay Class 1 National Insurance (but not PAYE tax) through payroll
Employees earning at a rate of £8,500 or more a year Report on form P11D Add the cost to the employee's other earnings and deduct and pay Class 1 National Insurance (but not PAYE tax) through payroll
Directors Report on form P11D Add the cost to the employee's other earnings and deduct and pay Class 1 National Insurance (but not PAYE tax) through payroll

Non-qualifying expenses or benefits where you reimburse your employee's costs

Non-qualifying expenses or benefits where you pay your employee back their costs count as earnings, so you must:

  • add them to the employee's other earnings
  • deduct and pay PAYE tax and Class 1 National Insurance through payroll
Expenses and benefits: relocation costs
What to report and pay