Phased introduction of mandatory payrolling for benefits in kind

Summary

HMRC has announced that mandatory payrolling of benefits will no longer apply to all benefit sections from April 2027, and that mandatory reporting of benefits in kind will now be phased in from 6 April 2027 instead.  

Details

Following feedback from the industry, mandatory real-time reporting of Income Tax and Class 1A National Insurance contributions for certain benefits in kind (BiKs) and taxable expenses will now be introduced in two phases.

• Phase 1 will commence from 6 April 2027
• Phase 2 will commence from 6 April 2028 

Phase 1 - from April 2027

The only benefits in kind that will be mandated for payrolling from 6 April 2027 will be:

• Company cars
• Car fuel
• Vans
• Van fuel
• Employer-provided medical benefits 

If employers wish to continue payrolling other benefits on a voluntary basis from 6 April 2027, they are free to do so under the same arrangements as today (with appropriate registration).

Phase 2 - from April 2028

This will involve the mandatory payrolling of most other BiKs, with the exception of loans and accommodation which will remain voluntary.

P11D Organiser

P11D Organiser will be updated to maintain compliance with the new phased approach, offering data export for the mandatory sections from April 2027, and for the remaining sections in April 2028. The software will therefore retain the ability to submit P11D information for the non-payrolled benefits for the 2027/2028 tax year.

We will keep our customers informed on this fast moving legislation as soon as we have more informaion.