The mandatory payrolling of benefits in kind (BiKs) will be introduced in phases from 6 April 2027. This measure was originally due to start from 6 April 2026 but was delayed by a year to give employers and payroll software providers more time to prepare.
From April 2027, employers will be required to report medical benefits, company cars, vans and car and van fuel through payroll software, deducting Income Tax in real time. Associated Class 1A National Insurance contributions will also be reported and paid through Real Time Information (RTI).
From April 2028, mandatory payrolling will extend to most remaining benefits in kind. Certain benefits will remain outside mandatory payrolling in April 2027 and April 2028. This includes employer-provided loans and accommodation which can continue to be reported annually or payrolled voluntarily.
Benefits provided to globally mobile employees will also remain outside mandatory payrolling while HMRC considers alternative arrangements. Employers must register affected employees with P11D and P11D(b) reporting continuing for these cases.
The voluntary payrolling registration service reopened on 5 November 2026. Employers can use this service to register benefits voluntarily, including loans and living accommodation, and to payroll Class 1A National Insurance contributions.
Employers should review their payroll systems and processes ahead of the changes. A transitional easement will also apply, preventing penalties for non-deliberate inaccuracies during the 2027-28 tax year.
