Benefits in kind move into payroll from April 2027

HMRC is phasing in mandatory payrolling of benefits in kind. Instead of reporting benefits on P11D forms after the tax year, employers will report and pay the tax through payroll in real time.

The timetable

• 6 April 2027: company cars, vans, fuel and medical benefits
• 6 April 2028: all other benefits, apart from loans and accommodation
• Employment-related loans and accommodation can be payrolled voluntarily from April 2027

What changes for employers

• The tax on each benefit is collected through employees' pay each month
• Class 1A National Insurance on these benefits is reported and paid in real time too
• Payroll software and processes need to be ready before April 2027
• Employers can choose to leave out globally mobile employees

What changes for employees

Employees pay the tax on their benefits as they go, rather than through a tax code adjustment later, so payslips will show the benefit values.

Get ready now

List the benefits you provide, check their values and make sure your payroll provider supports payrolling. We can handle this for you as part of your payroll service.