Section K - Services Supplied

General and background information

Enter the additional cost of any services supplied where the contract for the service is between the employer and the supplier, otherwise use section B.

You should report details of goods or services that are offered free or at a discount in this section, e.g. beer tokens, stress counselling etc.

The amount that should be entered should be the higher of the following:

• The market value of the goods - the second-hand value in the hands of the employee, or 
• The extra costs incurred by the employer in buying the goods or providing the services, less.
• Anything made good by the employee.

If the goods or services are provided partly for business and partly for private use, the employee may be able to claim a tax deduction, or the employer may be able to include the business use in a dispensation.

The extra costs incurred by the employer

It is for this reason that the line rental of an employee’s home telephone in the employer's name is non-taxable as it is provided mainly for business purposes; only the proportion of private calls is taxable on the employee.

Calculate the benefit by taking the extra or marginal cost of providing the service. For in-house services, this amount takes no account of fixed costs that are incurred by the business anyway. Services bought in are generally chargeable on the full cost, but do not report them if they qualify as tax-exempt items, e.g. canteen; workplace nursery places; training; car parking near the workplace; late night transport; and in-house sports facilities. Office accommodation supplies and services are exempt from tax and Class 1A NICs if private use is not significant.

Information required

The extra cost of providing the services, less the amount either made good by the employee or which has suffered a tax deduction – the difference being the cash equivalent. Only use this section if the contract for the service is between the employer and the supplier, otherwise use section B.

Measure of benefit

Calculate the benefit by taking the extra or marginal cost of providing the service. For in-house services, this amount takes no account of fixed costs that are incurred by the business anyway. Services bought in are generally chargeable on the full cost, but do not report them if they qualify as tax-exempt items, e.g. canteen, workplace nursery places, training, car parking near the workplace, late night transport and in-house sports facilities. Office accommodation supplies and services are exempt from tax and Class 1A NICs if private use is not significant. This exemption extends to the employees’ homes if the benefit is provided to allow the employees to perform their duties and the private use is not significant.  

Practical points

• Free or reduced cost travel provided by transport companies has a small or negligible benefit value. 
• Free or reduced fees for employees of solicitors or stockbrokers, for example, have a negligible benefit for time costs, but any disbursements not repaid by the employee are taxable.

P11D Form: Section K

P11D Guide: Section K

Services Supplied

Enter the additional cost of any services supplied where the contract is between you and the service supplier.

Some employer provided services (whether on premises occupied by the employer or elsewhere) are exempt from charge where the private use of the service is not significant in the context of its use by the employee in performing their duties.

Read chapter 5 of booklet 480 - an expenses and benefits guide for further information.   

Additional HMRC Documentation and external help 

Click the links below to go directly to the HMRC website to download or view the PDF or help files listed below.

HMRC P11D Guide
HMRC Booklet 480 (Chapter 6)