HMRC Payrolling Benefits Delay

If you’ve heard that HMRC is changing how employee benefits are taxed—you’re right.

But here’s the good news: the most disruptive part of that plan has just been pushed back to April 2027.

The requirement to payroll Benefits in Kind (BiKs) is coming—but the transition is now slower. That gives you time to prepare, especially if you’re still managing payroll manually.

What Is “Payrolling Benefits”?

Traditionally, employers report employee perks like company cars, private medical insurance, or gym memberships on an annual P11D form.

With payrolling, those benefits are taxed in real-time—through the payroll system—just like salary. That gives employees clearer visibility and removes the need for separate year-end reporting.

It’s a more modern approach—but only if your system is ready.

What’s Actually Changing?

HMRC initially planned to make payrolling BiKs mandatory from April 2026. That has now been delayed to April 2027.

In short:

• The P11D isn’t gone yet—but it will be.

• You can still opt in voluntarily if you’re ready now.

• Some benefits (e.g., accommodation or low-interest loans) will still require separate reporting even after 2027.

Do You Need to Act Now?

If you’re with Intelligent Payroll: No action needed.

We’re already planning for the transition and will notify you well ahead of any changes affecting your business.

If you’re managing payroll in-house, now is a good time to ask:

• Are we ready to payroll benefits if required next year?

• Is our payroll software HMRC-compliant for real-time BiK reporting?

• Do we want to keep issuing P11Ds—or streamline now?

Why This Matters (Even If It’s Not Urgent)

When this becomes mandatory, it will fundamentally change how employee benefits are handled. Businesses that prepare early will avoid last-minute compliance issues—and reduce year-end admin.

Outsourcing payroll means:

• You don’t need to monitor deadlines

• No new forms to learn or file

• You’re protected against sudden changes in rules

That’s our job.

Final Thought

This is one of those changes that’s not urgent—but important.

Yes, HMRC has given everyone breathing room. But forward-thinking businesses will use the time to prepare and simplify their processes now—not later.