HMRC recently confirmed that the mandatory payrolling of Benefits in Kind (BiKs) has been moved to April 2027. While that sounds like a long way off, 2026 is actually your “Year of Preparation.”
What’s happening? Currently, most employers report benefits like health insurance or gym memberships at the end of the year via a P11D. From April 2027, this form will be scrapped, and tax must be collected through the payroll in real-time.
Why 2026 matters: This tax year (2026/27) is the final opportunity to voluntarily payroll your benefits. We are recommending our clients use this year as a “stress test” for their systems.
The Benefits of Moving Early:
- Eliminate Year-End Stress: No more rushing P11Ds in July.
- Better Cash Flow for Employees: Tax is spread across 12 months rather than resulting in a tax code change and a “bill” the following year.
- Compliance: You’ll have a year to iron out any software glitches before the mandatory deadline hits.
Checklist: Speak to Grace Bellairs this month to see if your current software is ready for the transition. The “Paperless Payroll” era is coming, let’s make sure you’re ahead of the curve.