Payrolling benefits in kind is changing, and employers need to prepare now. From 6 April 2027, employers must payroll taxable benefits in kind and expenses in real time. HMRC is also bringing in new registration rules for payrolling benefits in kind. Employers should therefore review their arrangements well before the deadlines.
Which benefits must employers payroll from April 2027?
From 6 April 2027, mandatory payrolling will cover several common benefits. These include:
- company cars
- car fuel
- vans
- van fuel
- employer-provided medical benefits
What changes from April 2028?
Most other benefits will then become subject to mandatory payrolling from April 2028. However, employment-related loans and accommodation will remain voluntary. As a result, employers can still choose whether to payroll these benefits.
Registering for voluntary payrolling
Some employers may wish to payroll non-mandatory benefits voluntarily for the 2027–28 tax year. If so, they can register through HMRC’s online service from November 2026. The service lets employers register benefits such as employment-related loans and accommodation. Payrolling for these benefits can then start from April 2027.
Class 1A National Insurance contributions
The new registration rules for payrolling benefits in kind also affect Class 1A National Insurance contributions. Employers who voluntarily payroll non-mandatory benefits must report and pay these contributions through the payroll. This requirement applies from 6 April 2027. Consequently, employers can no longer report these contributions separately at the end of the tax year.
What if you are already registered?
Employers already registered for voluntary payrolling will automatically continue into 2027–28. On the other hand, some employers may wish to stop voluntary payrolling for non-mandated benefits. If so, they must do this by 5 April 2027.
Globally mobile employees
Real-time reporting can cause practical difficulties for globally mobile employees. For this reason, employers can voluntarily exclude eligible globally mobile employees from the mandatory real-time requirements. HMRC plans to launch a new online service in November 2027. Through this service, employers can choose this option and identify the employees concerned. Employers will then continue to report these employees through the traditional year-end P11D process.
Preparing for the new registration rules for payrolling benefits in kind
With several deadlines approaching, employers should act early. First, they should review their current benefits arrangements. Next, they should check that their payroll systems can handle real-time reporting. They should also decide whether to register for voluntary payrolling from November 2026. Finally, they should identify any globally mobile employees who may qualify for exclusion. That way, they can stay compliant and avoid last-minute pressure.
Need help with the new registration rules for payrolling benefits in kind?
Our payroll specialists can review your benefits arrangements and check that your systems are ready. We can also help you register for voluntary payrolling. Get in touch with our team today to find out how we can help.
