From April 2027, HMRC will begin mandating the “payrolling” of certain benefits in kind (BIKs), with a wider rollout expected from April 2028.
What’s changing?
From 6 April 2027, employers will be required to payroll the following benefits:
- Company cars
- Car fuel
- Vans and van fuel
- Private medical insurance
These benefits will be taxed in real time through payroll, rather than being reported after the year end on forms P11D.
From April 2028, most other benefits are expected to follow.
What does this mean in practice?
For many employers, this will:
- Remove the need to prepare P11Ds for the affected benefits
- Move the tax charge into monthly payroll
- Require payroll systems to be set up correctly in advance
Employees may also notice:
- Changes to their monthly net pay
- Fewer year-end adjustments to their tax codes
What should you do now?
There’s no immediate action required, but we recommend:
- Reviewing which benefits you provide to staff
- Checking whether your payroll software can handle payrolling
- Planning ahead for the transition (especially if you currently rely heavily on P11Ds)
We’ll help you prepare
We’ll be working with clients over the next year to ensure a smooth transition ahead of April 2027.
If you’d like us to review your position or walk through the changes, just get in touch.