Mandatory payrolling is now being introduced in stages. From 6 April 2027 onwards, employers will be required to payroll:
- company cars;
- car fuel;
- vans;
- van fuel; and
- medical benefits.
For 2027/28, employers can opt to payroll all other benefits voluntarily, including taxable cheap employment-related loans and living accommodation benefits which cannot currently be payrolled. However, non-mandatory benefits can only be payrolled in 2027/28 if they have been registered for payrolling.
New service
The service previously used to register benefits in kind for payrolling has been closed down. It is to be replaced with a new service which is to be launched in November 2026. From that date, employers will be able to register benefits for voluntary payrolling from 6 April 2027. Where benefits are not registered for voluntary payrolling in 2027/28, the employer will continue to report them to HMRC after the year end on the employee’s P11D. To voluntarily payroll benefits in 2027/28, they must be registered before the start of the 2027/28 tax year.
2028/29
From 6 April 2028, all remaining benefits with the exception of taxable cheap employment-related loans and living accommodation benefits will be brought within mandatory payrolling.
The only benefits for which payrolling is voluntary in 2028/29 are employment-related loans and living accommodation benefits. Employers will be able to payroll these voluntarily if they have registered them for payrolling using the new service.
Call to Action
If you provide benefits to your staff, please contact our team. We can help you register for payrolling before April 2027 and make sure your payroll is ready for the changes.